Stages of the sales pipeline

What is a sales pipeline?

A sales pipeline can be described as an organised, visual way of tracking potential buyers as they move through the stages of the purchasing process. The sales pipeline is usually visualised as a horizontal bar or funnel that is divided into several different stages depending on the company’s sales process. During the sales process, the prospects are moved through each section of the sales pipeline until they eventually close a deal. Using a sales pipeline allows businesses to track the potential buyers as they progress through the buying process and allows managers to keep track of what stage of the buying process each sales rep is at. They are typically created by sales teams and involve collaboration from sales reps, managers, and executives to create a sales pipeline that fits the business’ aims.

Benefits of a sales pipeline:

There are many benefits of creating a sales pipeline for your business. The first is that using a sales pipeline provides a simple pathway for businesses to achieve their aims. The pipeline will show the sales history allowing you to easily see whether your company will achieve its sales goals during a specific time period. Another benefit is that you can see exactly how long each prospect is taking to move through the sales pipeline and whether you need to adapt your selling techniques at any particular point. This helps you to monitor your sales team’s progress and give you an idea of whether you need to give further training to help move prospects along the pipeline more quickly. A third benefit of using a sales pipeline is that it helps to improve work productivity and efficiency by allowing sales reps to focus on the right customers at the right time. It will help your teams to have a clearer insight into the more valuable deals and which deals are more likely to be lost.

Stages of the sales pipeline:

Although some businesses may have a more unique sales process, most businesses focus on seven main stages in their sales pipeline.  

-       Prospecting: this first stage of the sales pipeline focuses on the stage where the sales person is yet to have had an initial conversation with a lead. This is the stage where the sales rep has identified them as a potential customer, and they are planning on reaching out to them.

-       Lead qualification: this is the stage where the salesperson has had their first interaction with the potential lead, however the sales rep needs to understand if their lead fits a set of criteria to pass to the next stage of the sales pipeline. These criteria could be anything including the location of the lead or their budget. Once they have decided whether they are a valuable lead, they will continue to the next stage of the pipeline.

-       Demo or meeting: Once the sales rep has established there is an opportunity for a potential sale, they meet with the customer to demonstrate the benefits and features of the product or service. This could be either through a product demo, an assessment or presentation. This is also when the sales rep asks the customer about their specific needs and goals.

-       Proposal: the proposal stage is when the sales rep will offer a price to the lead with a summary of the services they are offering to the customer. This is the official agreement of the product or service being offered.

-       Negotiation: this is usually needed if you are selling your product or service to a larger business and is where stakeholders are brought in to assess and ensure the financial terms are correct and fit their needs and budget. This is where the salesperson will then create a final contract.

-       Opportunity won: this is the stage where the contract is won, signed and the sale has been confirmed.

-       Post-purchase: this final stage is the stage where the salesperson will check-in with their customer. This is also a stage where the salesperson offers the customer add-ons to gain further sales.