Article | 12 min read

Sales pipeline management 101: What it is and best practices

Learn how a CRM can help streamline your sales pipeline management process.

By Donny Kelwig, Contributing Writer

Published March 23, 2020
Last updated October 6, 2022

Sales pipelines may be fantastic structures for organizing your sales operations and processes, but they’re not self-sufficient—they need to be managed, too.

The purpose of sales pipeline management is to estimate the upcoming sales you’re aiming to close. Without proper management, you could be missing profitable opportunities. Do you know how many qualified leads are converting? Has your sales team overlooked deals that are now lost? How many deals are worth pursuing?

Over time, poor pipeline management can also cause inaccurate sales forecasting, which affects critical planning information, such as resource allocation and budgeting. Revenue growth can suffer as a result. An inaccurate and poorly managed sales pipeline can eventually lead to the self-destruction of a business.

To avoid the pitfalls of poor management, you need a standardized sales process that includes defined steps for each stage of the pipeline. It also helps if you have a sales CRM with pipeline management functionality that automates the process and keeps all your salespeople on the same page.

With that in mind, let’s dive into how a sales CRM can revitalize your pipeline management:

What is pipeline management?

What is pipeline management?, holding different shaped blocks

Pipeline management is the process of tracking sales opportunities from start to finish and analyzing the failures and successes along the way to make improvements. When done effectively, pipeline management helps your company define ideal sales strategies that promote growth.

Pipeline management is doable with a variety of software tools—you could even use a very detailed spreadsheet—but it’s most successful when managed with dedicated sales pipeline software. Because your sales pipeline covers so many interactions, the more centralized you keep your data, the easier it is to analyze.

Characteristics of sales pipeline management

By definition, sales pipeline management manages your sales pipeline, but that’s a very broad statement. When you break it down, sales pipeline management specifically looks at:

  • Metrics and analytics: The collection and analysis of sales pipeline data give you insight into every pipeline stage.
  • Sales forecasting: Future sales predictions based on accurate metrics and analytics help with planning.
  • Sales team strategies: Evaluate your sales team and the tactics they use—along with the effectiveness of those tactics—to inform your strategy.
  • Management tools: Technical applications or software applications increase pipeline productivity.
  • Pipeline optimization: Streamline your pipeline for the fastest possible conversions.

Depending on your current tech stack and sales setup, your company can divide and define these categories further. However, thinking about these five building blocks is a great start to managing your pipeline. It’s much less helpful to look at your sales process and simply say “make it better” than it is to investigate and refine smaller sections with a keen eye.

Why is pipeline management important?

Why is pipeline management important?, putting puzzle together

Your sales pipeline is the framework of your entire business and the catalyst behind your business development. Every single lead, prospect, and customer you have goes through your sales pipeline in one way or another to help your company thrive. That makes your sales pipeline one of your holy grails—managing it should be a top priority.

While it’s true that sales happen all the time without pipeline visibility and insight, companies that operate within this outdated model are at a severe disadvantage. According to a recent study, companies with effective pipeline management have an average growth rate that’s approximately 15 percent higher than companies that don’t. Moreover, businesses that employ specific practices push that percentage up to an impressive 28 percent.

The numbers are clear: When you put the time and effort into managing your sales pipeline, the growth and revenue results speak for themselves.

Unlock a measurable sales pipeline

This free guide examines three vital steps to establish a measurable sales pipeline that drives repeatable, predictable sales growth.

Pipeline management process

Why is pipeline management important?, writing in notepad

Now that we know what pipeline management is, let’s walk through the seven stages and look at how CRM capabilities streamline each step of the management process:

  • Find your sales prospects
  • Determine lead potential
  • Identify decision-makers
  • Follow up
  • Measure results
  • Analyze results
  • Update your pipeline

Find your sales prospects

Finding prospects is always the first stage of the sales process. In addition to cold calling and emailing, here are a few ideas for finding new prospects:

  1. Lead capture forms collect information from prospects who visit your website and would like more details. Zendesk’s sales CRM software enables you to create lead capture forms that can be displayed on your website and social channels.
  2. Social media can be used to engage with leads by responding to their comments or answering their questions on platforms like Twitter and Facebook. Through these interactions, you can pick out potential customers who may be worth pursuing. You can also use social media platforms to message individuals or small businesses you believe could be potential clients. Zendesk Sell offers social media integrations, like our free Facebook lead capture forms. Customers can fill out the form from your Facebook page, and their information will be uploaded directly to Sell from the form.
  3. A content marketing strategy that’s aligned with sales is a great way to generate interest and attract new prospects. Blog articles, ebooks, and thought leadership pieces all provide useful information to your target audience while giving you a platform for capturing readers’ contact information. Work with your marketing department to develop content that will appeal to your target persona.

    Sales prospecting doesn’t have to be difficult. With the above tactics and a clear prospecting strategy, you’ll be set to attract more high-value leads.

Determine lead potential

The next step is qualifying leads to decide how they should be prioritized.

To gauge a prospect’s value, calculate their potential total sales dollars and volume for a specific period (weekly, monthly, annually, etc.). You’ll need to use the data you have about the prospect and past customers to estimate how much their company can spend on your product or service.

Determining a lead’s potential isn’t an exact science, but you can score them effectively by following a clear process. Zendesk Sell’s lead scoring feature partially automates the qualification process. By setting up a scoring system in your CRM, it will automatically know when to qualify a lead. If a lead scores high enough due to their characteristics, they will become a qualified lead, and your CRM will notify you.

Identify decision-makers

In some cases, your contact may be a decision-maker. But many times, purchasing decisions are made by the executives who manage your contact.

Asking your contact about the key decision-maker(s) at their company doesn’t have to be awkward. Try softening your approach: Let the client know that this purchase would represent a significant expenditure for your company and would need executive approval. Once you’re on the topic, ask if that’s their policy, too.

All the information you obtain on decision-makers should be stored in your sales CRM. Names, contact information, and previous conversations can all be documented.

Follow up

Following up is an incredibly important stage of the sales pipeline and can be as simple as:

  • Sending an email to your contact thanking them for their time and summarizing the next steps.
  • Calling the prospect to see if they are still interested.
  • Documenting all follow-up actions you agreed to complete for all clients and prospects in your sales CRM.

Zendesk Sell makes data entry easy by keeping all client communications and notes in one unified place. You can even make prospect phone calls and send emails directly from the platform. For follow-up notes, add a description of the action, a contact name, and the date of completion. Then, track and complete those actions accurately and within the agreed-upon time frame.

It’s especially important to follow up promptly after the first call. Prospects likely have sales offers from competitors, so you may lose their business if you wait too long.

Measure results

For each prospect, track and measure your successes (and failures).

Tracking the results of your sales pipeline—especially in a sales CRM with pipeline tracking—helps with accurate sales forecasting later on and gives a better idea of future revenue.

Zendesk Sell collects customer data in real time to make metric tracking seamless. You should be reviewing metrics that give you an idea of pipeline health, sales activity, and stage conversion rates.

Here are a few examples of important metrics to track:

  • Win rate: This describes the number of qualified leads who turn into customers. Track this on a month-to-month or quarter-to-quarter basis so you can measure change over time.
  • Lead-to-qualified-opportunity conversion rate: How many of your leads are becoming qualified? Are your qualification standards too high or too low?
  • Average sales cycle: This is the length of time it takes to close a deal, on average. Once you know your sales cycle length, you can identify the deals that are stagnating in your pipeline.
  • Sales velocity: A combination of conversion rate, average deal size, sales cycle length, and the number of opportunities, this metric looks at how fast leads go through your pipeline and how valuable they are to your business. Sales velocity helps you determine what different stages of the pipeline need attention and how you can quickly close more deals.

Zendesk Sell offers several sales performance reports to help you get the most out of your data.

The stage conversion report is just one example of Sell’s many sales reporting options. We’ve also rounded up a list of the five most important reports for sales managers to run.

Analyze results

This stage is for reviewing the efficiency and effectiveness of your sales pipeline management process. Use your CRM to check the data and determine which processes are working and which ones aren’t. Repeat the paths that have won sales, and avoid the actions that lost deals. Consider these questions:

  • At what stages are deals getting stuck?
  • Based on the data, what are the current risks?
  • What specific actions can we take to improve our opportunity conversion rate?
  • How frequently and effectively do we follow up?

Zendesk is also a sales funnel tool with a funnel report that’s especially helpful for visualizing what stage is the sticking point for your team.

4 steps to analyze your sales pipeline reports

  1. Review data regularly.
  2. Always look for opportunities to improve your strategies.
  3. Share what works and what doesn’t with your sales force.
  4. If necessary, revamp your standardized sales process.

Update your pipeline

Regularly clean your pipeline to ensure you’re throwing out the bad prospects. It’s easy for leads that aren’t worth pursuing to start cluttering up your pipeline. Consistently audit your pipeline, asking yourself specific questions. For example:

  • Are there any bottlenecks (stagnant leads)?
  • Are there any low-opportunity leads that I can remove?
  • Are there any communications that should be updated?

Also, use your sales CRM to keep prospect contact information up to date. And don’t let it get too messy—for the best results, you should scrub your pipeline either daily or weekly. Everything will be more accurate, and you won’t get overwhelmed at the end of the month.

5 best practices for sales pipeline management

5 best practices for sales pipeline management, holding hourglasses

Once you have your sales pipeline management system in place, you’ll need to maintain it for maximum impact. Here are five best practices for sales pipeline management:

1. Metrics, metrics, metrics

The most important gift your sales pipeline gives you is detailed sales data. Tracking and analyzing metrics across your pipeline provides insights into exactly what works and what doesn’t. According to experts, the key metrics you need to track in your sales pipeline are:

  • Average sale
  • Average sales cycle
  • Cart abandonment
  • Cart-to-detail rate
  • Client retention
  • Closing rate
  • MQL to SQL conversion rate
  • Conversion rate
  • Cost per acquisition
  • Customer lifetime value
  • Deal profitability
  • Lead source
  • Lead volume
  • Lead velocity rate (LVR)
  • Lost sales
  • Opportunity-to-win ratio/rate
  • Projected sales value
  • Qualified leads
  • Return on ad spend
  • Sales pipeline velocity
  • Time spent in each stage of the pipeline

All these metrics are easily manageable in your sales CRM. You can track different strings of sales data and then generate reports based on individual analytics. You can also share those reports with relevant parties with the click of a button.

2. Schedule regular, company-wide updates

Because your sales pipeline touches so many different aspects of your company, everyone must be on the same page when you’re instituting changes. Set up quarterly or annual meetings where the entire company can learn about new strategies based on pipeline analysis. When all your departments are aligned, they can work together to effectively implement your new ideas and avoid communication silos.

3. Keep it short and sweet

The longer you make your sales pipeline, the harder it is to manage. Keep your sales pipeline, cycle, and process as short and straightforward as possible. Not only is it easier for your sales reps to stay on top of a shorter to-do list, but having a shorter pipeline gives your prospects fewer opportunities to back out or change their minds. Get the prospect going, close the deal, and move on to the next.

4. Train your sales managers

You can’t personally oversee every aspect of your pipeline on a day-to-day basis, but your sales managers can. When you train them on pipeline management strategies, you give them the right tools to ensure pipeline changes are implemented successfully.

Need more proof? Companies that train their sales managers in pipeline management see their revenue grow 9 percent faster than those that don’t.

5. Take it one small improvement at a time

It takes time to make changes, especially if you’re looking at a complete pipeline overhaul. Don’t try and change everything at once. Instead, focus on specific sections of your pipeline and work in stages. Not only is it easier for your teams to learn this way, but it’s easier for you to correct any mistakes that pop up along the journey.

Start using the ultimate pipeline management tool today

Successful businesses keep close tabs on clients and prospects in their sales pipeline. And the best way to do that is with a sales CRM that allows you to track information by month, quarter, or year—say goodbye to tracking data in endless, repetitive spreadsheets.

With a sales CRM, you can also measure the sales dollars and closure rates for potential sales, then analyze the results to help you manage and—most importantly—continually improve your sales pipeline.

Request a demo of Zendesk Sell today and establish a strong management plan for your sales pipeline.

Unlock a measurable sales pipeline

This free guide examines three vital steps to establish a measurable sales pipeline that drives repeatable, predictable sales growth.

Unlock a measurable sales pipeline

This free guide examines three vital steps to establish a measurable sales pipeline that drives repeatable, predictable sales growth.

Read now