For certain businesses, sales come in naturally. Clients and leads can come in from several existing client referrals or marketing campaigns. Following a step-by-step and thorough strategy might convert prospective clients into paying customers.
But that is not always the case. Among several mid-sized and small organizations, the sales process can be unstructured. Resulting in unpredictable sales and diminishing revenues.
To design a better sales structure, you have to analyze and develop the stages of a sales pipeline. When the leader of a company is well-versed in details like the volume of leads generated into the funnel and the number of buyers, they gain valuable insights into the areas of improving or simplifying the entire sales process.
To design a better sales structure, you have to analyze and develop the stages of a sales pipeline. When the leader of a company is well-versed in details like the volume of leads generated into the funnel and the number of buyers, they gain valuable insights into the areas of improving or simplifying the entire sales process.
So, in this article, I will help you understand the sales pipeline and its stages to help you get a step closer to scaling your business and getting more sales.
What is a sales pipeline?
A sales pipeline is a visually organized way of tracking potential clients as they progress through several sales pipeline stages.
Often the stages in the sales pipeline are visualized as a funnel or a horizontal bar, divided into several stages of the company's sales process. The prospective clients and leads are progressed from one stage to another as they proceed through the sales process.
Sales pipeline stages allow the sales process to separate into smaller trackable tasks that become easy to achieve and work on. By having a sales pipeline, the sales team can easily spot where their time, resources, and efforts are invested to see if they are converting.
This information gathered in one place is vital for the sales team as they often work on multiple sales deals and prospects simultaneously. With being so occupied, there can be instances that anything vital drops through the cracks.
A sales pipeline is an effective tool for sales managers. It helps them with collective data to analyze and improve sales performance.
If not adequate, the managers can easily optimize the sales process to eliminate the shortcomings. Since a sales pipeline offers a clear track of a salesperson's activity, the sales manager gets excellent visibility into which specific activities offer great returns to the business.
How is a sales pipeline beneficial for your business?
To be a successful business owner, having the sales pipeline stages on track is critical. A Harvard Business Review study shows that businesses with an effective sales pipeline management relish a growth rate of 5.3 on average, 15% higher than the companies that don’t.
The same study shows that the companies that followed three powerful sales pipeline practices witnessed a 28% increment in revenue generation. With that said, take note of the crucial elements of the sales process:
- Identify the potential leads and collect their contact details.
- Filter out the prospects uninterested in your offerings (service or product).
- Set up a meeting and be well-prepared.
- Create a tailored proposal that targets the pain points and requirements of the client.
- Prepare for negotiation to come close to a deal that works well for both parties.
- Seal the deal and draw a contract. Do not abandon the prospective clients who did not convert. They might not have been quite ready to make a purchase.
- Maintain a high standard of after-purchase customer service once the sale is made.
A well-defined sales pipeline offers you a detailed understanding of the sales process. It allows you to be more effective while selling your products or services, resulting in revenue generation. If you can take advantage of this, there can be significant improvements in your relations with potential prospects.
Sale pipeline vs. sales funnel
The terms sales pipeline and sales funnel are often used interchangeably but they refer to different stages and aspects of the sales process.
The sales pipeline represents every deal or lead that is within your sales process. It focuses on individual deals your sales staff is working on and their progress from initial contact to final close.
The sales funnel, on the other hand, depicts the entire journey that a prospect takes from the awareness of the product or service to the final purchase. It visualizes the steps a customer goes through before making a buying decision.
Although both of these concepts sound the same, they are inherently different. They are essential for effective sales management and adopting a customer-centric sales approach.
What are the stages of a sales pipeline?
Successful business owners value lead generation and concentrate on converting them into paying customers. Sales are how a business grows. The time taken to convert a customer depends on the offered services and the cost of the services.
The sales reps usually visualize client acquisition via the standard sales pipeline stages. One can apply varying sales strategies at different stages of the sales pipeline that can help convert leads into paying customers.
To optimize the revenue generation for your business, you must understand the sales stages pipeline. A robust sales pipeline offers valuable insights into anticipated cash flow, resource gaps, revenue, process bottlenecks, and over-allocation. With no further delay, let us look into the stages of a sales pipeline.
Prospecting
The first sales pipeline stage is the prospecting stage. It is the most crucial and difficult part of the sales process as over 40% of reps consider prospecting to be the most challenging aspect of the sales process.
The sales team collects leads and registers their contact details at this stage. There are various ways of lead generation, including email marketing, PPC campaigns, cold outreach, content marketing, social media campaigns, and in-person events.
At this sales pipeline stage, one can follow some obvious growth strategies like the following:
- Basic Targeting - Understand the clients you wish to target and evaluate where you can find such leads.
- Sales Channels - Determine the most appropriate sales channel to fetch leads.
- Conversion Rate Optimization - Enhancing your approach and messaging to push more leads into the sales pipeline.
Fundamentally, you would be required to research the customer journey, construct a customer persona, and track down potential leads to the sales funnel by the sales channel.
In the marketing space, offering a free consultation is the easiest way to generate leads that would convert. This process is simple yet very highly effective.
To take this step to a different and enhanced level, you can set up retargeting across YouTube, Facebook, or Google Ads that push the leads to landing pages where you can offer a content upgrade. This way, you can increase the volume of lead acquisition by targeting prospective clients who might be interested in the products or services you offer.
Another way to generate leads is by adding a lead bot on your website. A lead bot acts as the first point of contact that your visitors can engage with should they face an issue or have any concerns. A lead bot can automate your lead generation process without needing any manual intervention.
So how can you add a lead bot to your website? By using Sales Simplify’s Leadbot builder. With Sales Simplify, you can build a lead bot without having technical or coding experience. Simply enter the required information in the fields and our software will generate a lead bot code that you can include in your site’s source code.
After you are done with having your target leads, it is essential to manage them efficiently. You can have this sales pipeline stage processed manually, but it would cost you enormous time and put you at risk of missing a chance due to manual error. That’s why it is recommended that you use CRM software.
Once again, you can use Sales Simplify which has a native sales CRM where you can store and handle your leads’ data in a hassle-free manner. It also allows you to assign tags to your leads so you can filter out the warm ones without having to go through the entire database.
Lead qualification
Lead qualification is one of those typical sales pipeline stages where you segment your leads as per quality. This is the stage where you develop a connection with the prospect leads.
You can partly automate this sales pipeline stage via a drip email campaign. A drip campaign is where a sequence of automated emails is triggered to achieve a precise result.
Now the question arises what does an email drip sequence look like? It looks something like the following:
- Begin with an introduction of who you are and what you offer.
- Explain how your service or product can benefit the lead.
- Showcase a case study that proves your service or product quality.
- Finally, pitch for a free consultation.
In email marketing, for example, the key levers to instant action include emotion and logic. But, drip email campaigning alone is insufficient to drive a lead down the sales pipeline.
So, it would help if you combined email marketing campaigns with other sales channels, such as webinars or events to nurture your relationships on a large scale.
Meeting prospects
Meeting prospective clients is one of the most essential sales pipeline deal stages that leads to conversion. To be precise, this stage of the sales funnel will highly vary depending upon your business and your prospects' preferences.
Some prospects would like to meet face-to-face, while others would prefer a video call. Other options include Webchat and a live demo of your services or product. No matter what method you pick, this is the stage where you get to explain your service or product in detail and emphasize the benefits of owning it.
For example, if your prospective client has questions or doubts, this is the stage where you can address them. In addition, if your prospective client seems receptive and someone is likely to make a purchase, this is also a stage where you can try to upsell your services or product with additional offerings. You can offer an extended subscription or additional features.
Below are some valuable tips to ensure success while in a sales meeting:
- Get your client to take action. Have them complete some functional activity before setting into the meeting. For instance, you can ask them to fill up a questionnaire to elaborate on their requirements and budget.
- Research well before the meeting. Suppose you have a meeting scheduled with a company representative and research well about the organization. Being familiar with the prospect and its company ensures a smooth meeting.
Set up the agenda for the meeting and witness how it helps. Even if you do not follow the plan, it will help make the meeting more topic-specific and meaningful. Set realistic goals and speak about the results. Do not focus much on the strategy as what ultimately the client cares about are the results.
End the meeting by clearly putting forward the next step. You must be clear if you will next arrange another meeting, send in a proposal, or make a follow-up call.
You must know that you are not required to accomplish everything in a single meeting. There can be times when you might sign a client in the first meeting itself. But, more often, you should focus on building relations that will help you sell later down the sales pipeline stages.
Making a proposal
Proposing to prospective clients is not just sending in your product list and menu. It should be customized for every client and cater specifically to their requirements. You must have keen knowledge about the client so that you have a sense of their problems and can show how you can offer help.
Prepare your proposals to be thorough yet concise. Pay attention to the objectives, and outcomes and ensure that the price aligns with the deliverables. You would want your potential clients to be excited about how your offerings would benefit them.
If your offering includes a service, offer a minimum of three price options or packages. Providing a range of options allows them an appearance of choice. Most often, the prospects pick the middle option.
On top of that, make a price offer that is too appealing to decline. Have a contract so you and your prospective client can sign and finalize a deal. A contract binds you and your client by valid obligations, leaving no room for misconduct or other mis-happenings.
Negotiation
If prospective clients accept your proposal, you can skip this sales pipeline stage entirely. But if they return with questions or concerns, it is time to negotiate.
Effectively negotiating in sales is a valued skill. Negotiations must be made on mutual respect. Both the dealing parties must operate in good faith and be on an equal footing. It is about reaching a mutual agreement where both parties go home satisfied.
Listen to your client and note their required changes in the initial proposal. Address their queries and try to find common ground with your deliverables.
Often you would require to divert a bit from your rules to achieve the expected results. Remember, if you emphasize rules and policy too much, you might not achieve your results. Follow as many rules as you want, but be ready to be flexible if required.
Closing the deal
You and your prospective client have agreed to a deal at this stage. Both parties must draw up a contract and sign it for the obligations. Once both the parties sign the contract, the deal is sealed.
On the other hand, if the prospective client rejects your proposal, do not lose hope. They might knock on your doors again and get you back to the negotiation table.
Sometimes, it might even happen that you do not crack a deal at all. In such a scenario, you should not cut them loose. Carry on with nurturing your relationship with them and send them right back to the first stage of the sales pipeline.
After purchase
Once your client signs the contract, the deliverables stage begins. A good business person knows how essential customer care is even after making a purchase.
If your offering is a service, schedule a meeting to ensure the client receives everything promised and stays happy. Ensure your client has every support they require. If you are offering products, ensure to arrange for follow-up calls to see if the customer is satisfied with the purchase or is having any concerns.
This is one of those stages in a sales pipeline where you can upsell or cross-sell upgraded solutions or new services to your new client. Remember the rule – it is more expensive to acquire a new client than to retain an existing one.
For instance, imagine that you have a digital shop and a customer purchases a product from there. After getting the product, for some reason, they didn’t like it or it didn't fit their needs and they decided to return it to you.
In this case, the first step from your end should be to get in touch with the customer and understand what was their reason for returning the product. See if you can exchange their product with a different one to better fit their requirements.
If all else fails, be professional about the refund as a long-term relationship is much more important than an individual transaction.
If you provide an outstanding customer experience after purchase, your client will not just praise you but also spread the positive word. And word of mouth is a powerful marketing instrument.
Bonus tips
While moving a client from one sales pipeline stage to another, follow a couple of the bonus tips mentioned below to have a seamless experience.
Certain stages in the sales pipeline work like a checklist. Once you have set up a meeting or made contact, the task is done, and you can move to the following stage.
On the other hand, other stages like lead qualification do not come with defined rules about shifting a deal from one stage to another. You can follow some rules to avoid confusion as to which stage the deal must be placed in.
- Firstly, be specific about the potential stages of the sales pipeline. Ensure the conditions required for a lead to be qualified.
- Secondly, break the broader stages into easy and smaller steps. For instance: You can break down contact-making into - first contact, setting up a meeting, or presentation meet-up.
Essential metrics to incorporate into your sales pipeline
Little details can take you a long way; the same stands for sales. Incorporate the below-listed metrics into your sales pipeline to close maximum deals.
Source of the lead
Determine how the prospective client got to know of your business. It could be print marketing, digital ads, customer referrals, or email campaigning. By this step, you would gather information about the sources that bring you maximum paying clients and pay attention to those sources to generate more leads.
Industry
Your service or product can work well among various clients. You will likely spot the industries where your services or products are the most popular. Conclusively, you can target such industries the maximum.
Decision-makers involved
Take note of the number of decision-makers you deal with while signing the contract. Apply varying sales engagement strategies while interacting with the finance head versus the CEO.
Size of the deal
You would find clients with different budgets in the market. Some clients would be ready to spend six figures, while others might come in with a relatively more minor budget. Segment the prospective clients as per the budget and personalize every pitch you make.
Closing probability
Even if the sales department comes in with hundreds of valued client prospects in the sales pipeline, the sales rep might not be able to close every deal or convert every prospective client successfully.
Some opportunities would be lost. Put an estimation on how likely every client is to convert and focus more on high-qualifying leads first. This would enhance your chances of cracking a deal.
You can use Sales Simplify to monitor your sales efforts and make data-driven decisions. The analytical capabilities of Sales Simplify allow you to understand what is working and what isn’t by evaluating real-time charts and graphs.
Frequently asked questions about the stages of the sales pipeline
Here are some of the common questions and answers about different stages of the sales pipeline.
How are the stages of the sales pipeline determined?
The stages of the sales pipeline are typically determined based on your company's specific sales process. Common stages include:
- Prospecting
- Qualification
- Needs Analysis
- Proposal
- Negotiation
- Closed-Won/Closed-Lost
These stages align with the steps your sales team takes to guide potential customers through the buying process.
How many stages can a sales pipeline have?
The number of stages in a sales pipeline can vary based on the complexity of the sales process, the industry, and the specific needs of your business. While there is no strict rule, a common sales pipeline might have anywhere from 3 to 7 stages.
How can I effectively manage deals in the sales pipeline?
Effective pipeline management involves regular monitoring, accurate tracking, and proactive follow-up. Use sales software like Sales Simplify to organize and update deal information, set reminders for follow-ups, and analyze trends to improve the sales process.
How does the sales pipeline help with forecasting?
The sales pipeline provides valuable insights into the number and value of deals at each stage. By analyzing historical data and the average conversion rates at different stages, you can forecast future revenue and make informed business decisions.
Ready to enrich your sales pipeline?
If well-managed and updated regularly, the stages of a sales pipeline will enable your sales team to track activities and deals seamlessly. Remember to set the sales pipeline stages based on the sales team's activities to close deals and generate revenue.
Feel free to revise the sales pipeline if there seems to be a need for fewer or more stages. Customize your sales pipeline according to the market trends or changes to ensure consistent returns. Having a functioning sales pipeline, you could get better at revenue, which would only grow with time.
Sales tools help your sales team in every step of the sales pipeline. So, book a free demo with Sales Simplify, a leading salesOS to up your selling game today!
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