A sales pipeline is a systematic overview of a business’s sales process that is made up of steps that sales representatives take in order to land a new customer or sell products to a new customer.
It is able to show the amount of money to be made in a sales deal, the revenue to be made over the next quarter and if it will be possible to maintain the current level of success. A company with a well-defined sales pipeline can determine what each step requires in order to meet the end sales objectives. The steps involved are:
Stages of a sales pipeline
Stage 1. Initial contact
In this stage, the marketing or sales team contacts a new lead to enter the sales pipeline. This is done by calling or emailing the lead to determine who they are, what products or services they are interested in, as well as building relationships between the sales representatives and the leads.
Stage 2. Qualification
This step is divided into two; marketing qualification and sales qualification. In marketing qualification, the marketing qualified lead is interested in the product or service intended to be sold and is willing to talk to the sales representatives while in sales qualification, the sales qualified lead is already going through the purchasing process. In this stage, the sales team determines whether the leads have needs and if they can afford to make a purchase.
Stage 3. Meeting
After qualification, a meeting between the qualified lead and the sales representatives is held. In the meeting, the sales representatives give more details about the product or service through demonstrations and discussions. This gives the representatives a chance to effectively convince the lead, with the hope of negotiating a deal.
Stage 4. Proposal
At this stage, the lead is already willing to buy the product or service. The team can now create a quote and send the final proposal to the lead indicating the amount of money to be paid. This step is crucial because the company impression made depends on how well the proposal meets the needs of the lead and how fast they are presented with a quote.
Stage 5. Close
This is the last step. Both parties are satisfied and have signed a deal. The focus now shifts from selling to keeping the customers, taking care of them and keeping them happy.
Metrics to consider in sales pipeline management
- The number of deals entering the pipeline
- Pipeline coverage – number of leads that enter the pipeline
- Pipeline length – time taken by a lead to become a customer
- Average deal size
Efficient management of a sales pipeline
- Clear definition of the sales pipeline stages
- Obtaining more information from the prospects to satisfy their needs
- Proper investment of both time and resources to manage the pipeline for greater revenue
- Effective training of sales managers to manage the pipeline