Stages in a Sales Pipeline
Originally published April 17, 2022
What happens in between attracting a lead and making a sale? Why do some sure leads drop off, and others follow through? What could we do to close more sales?
These are the questions that haunt marketers and keep us up at night. The answer? A sales pipeline.
A sales pipeline is the pathway to a sale that marketers guide leads through.
It's critical to an organized marketing effort. Without a data-informed pipeline or sales strategy, you're essentially throwing darts at a board and wondering why half of them hit the wall or went through a window.
In this article, we'll explain exactly how to define a sales pipeline, the different stages, and what you need to focus on!
In This Article:
What Is a Sales Pipeline?
A sales pipeline is a graphical representation of an organization's customer acquisition process.
It's the visual story of how Joe Random goes from knowing nothing about your business to becoming your biggest fan.
The chart's top (or however you choose to orient it) represents new leads or prospects entering the company's sales funnel. The bottom represents conversions or closed deals.
The stages in between represent different points in the customer relationship cycle during which a company might engage with a lead or prospect, such as contact, qualification, negotiation, etc.
Sales pipeline vs. sales funnel
Some people define sales funnels and pipelines the same way, and they're not totally wrong. The processes are similar enough that they often get grouped.
Sales funnels refer to the process of converting a lead into a customer by focusing on getting more leads to move through the funnel.
Sales pipelines are more about the sales process and its relation to your marketing efforts.
Essentially, the funnel is the entry into the sales pipeline.
Why Is Having a Sales Pipeline Important?
As I mentioned, a pipeline organizes and tracks precisely how a customer moves from point A to point B.
A pipeline is a valuable tool for tracking and managing the sales process as it provides a clear view of what stage each opportunity is in. This can be used to:
Track progress
Identify bottlenecks
Set expectations with clients about when they can expect to hear from you again
Once you've created your pipeline, you can isolate specific steps and focus on making them more efficient and effective. It can also help shorten the time it takes to make a sale.
Your team might be great at gathering leads. But if those leads aren't converting into sales, you can check on the pipeline to figure out where you're losing people.
The 5 Sales Pipeline Stages
The graphical representation below is the simplest version of the sales pipeline stages. You can add more steps depending on your sales process. Some businesses and industries need fewer stages, while others may require more, especially those selling big-ticket items and services.
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A Closer Look at Sales Pipelines
We've discussed lead generation and nurturing in more depth in other posts, but here is a quick overview of each step.
Lead generation
Lead generation is the first step of the sales pipeline. Its goal is to attract and convert individuals who have shown interest in a company's products or services into customers. It generally involves collecting contact details through various strategies, such as online forms, subscriptions, or social media campaigns.
Qualifying leads
Once you've obtained a lead, you must decide what to do. Pursuing leads takes time and money for your business. So, qualifying leads determines how much a lead is worth to your company.
There are many ways to determine if you've found a qualified lead, but here are some of the most common:
The lead is only qualified if they fit your target market or have enough money to buy your product.
If you contact a lead and they don't respond after a couple of tries, they are not qualified. (Note: They might become qualified later, so keep their information close by.)
The lead is qualified if they request more information about your product or service.
The lead is qualified if they consistently interact with your content.
A lead qualification process should be customized for your business and marketing strategy. The process should also be updated as your company changes its goals and objectives.
Lead nurturing
Lead nurturing is a strategic process in marketing that focuses on developing relationships with potential customers at every stage of the sales funnel. It involves regularly communicating with leads through personalized emails, social media interactions, educational content, and more to keep the company top-of-mind and build trust over time. The goal of lead nurturing is to educate the leads, respond to their questions and needs, and gradually guide them toward making a purchase decision.
Presentation
This step is essentially the sales pitch, where you personally communicate the benefits of your product or service and what it can do for the prospective customer.
Hopefully, the previous steps will weed out those less interested in your product or service. At this point, you should spend more time personally interacting with potential buyers and making sure their questions are answered.
You should address any concerns about purchasing from you by demonstrating why they should buy from you instead of someone else.
Sale
Congratulations! You’ve reached the end of the sales pipeline. If everything has gone right in the rest of the pipeline, all you need to do now is seal the deal. This stage involves direct interactions between the sales team and prospective customers, where the focus is on closing deals through negotiation, addressing concerns, and finalizing terms.
Managing Your Sales Pipeline
Sales pipeline management is tracking and managing a sales process from lead generation to conversion. Handling a pipeline uses a step-by-step method comprising several marketing tactics directed at identifying prospects in the market and presenting opportunities for conversion.
Use your pipeline for sales forecasting and planning, forecasting revenue, and evaluating performance.
You can manage your pipeline with marketing automation tools and predictive analytics to create specific targets that are followed through.
Lastly, a sound pipeline management system will allow you to manage your leads, opportunities, prospects, and deals separately – so that each can be prioritized appropriately.
Where To Focus Your Efforts
Lead generation is always the most important part of any sales process. If you aren't generating enough leads, you won't be able to qualify them and convert them into paying customers.
You should also make sure that you are spending your time wisely. It's not uncommon for companies to spend more than 50% of their time on lead-generation activities. Obtaining quality leads significantly decreases the number you'll have to sort through in the following few stages.
If, for example, you have to discard many of your leads in the qualification stage, you should examine your lead generation process. You may need to refocus your marketing efforts, refine your messaging, or change where you're marketing to find people more interested in your product.
Read our article for ideas on how to attract leads!
After the Sales Pipeline
While these are the steps of a healthy sales pipeline leading to a sale, there are some loose ends to tie up after making a sale (the drain portion of the pipeline, if you will).
Post-closing: This stage is when you follow up with customers after they have purchased to ensure their satisfaction.
Review: You want your customers to give feedback for possible improvements, so make sure you have a way for them to have a say.
Referral: This stage happens when the customer refers your company or product to others, which can be a fantastic way of getting new business.
Content is Your Secret Weapon for Building a Sales Pipeline
You have to think about these sales pipeline stages as a journey. Digital marketing opens up a whole world of possibilities for customer relationship management, and optimizing your sales pipeline is one of the best ways to walk a potential customer through the process.
An effective sales pipeline starts with high-quality leads. And there's no better way to find high-quality leads than through content marketing. Content marketing will have interested potential customers seeking you out, saving you time, energy, and resources.
If you're looking for quality content to draw in customers, People First Content can help! Our team of writers can construct content that matches your brand and attracts the right people. Click the button below to contact us and start your content journey.
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