If you look at the best sales teams—the ones that consistently hit their targets and drive revenue growth—they all have one thing in common: top-notch sales pipeline management.
But what exactly is sales pipeline management? Why is it so important? And how do you implement it effectively?
You’ll find the answers to these questions (and more) if you keep reading. So let’s dive in!
Table of Contents:
What Is Sales Pipeline Management?
Sales pipeline management is the practice of organizing, tracking, analyzing, and optimizing the way in which you move prospects through the stages of your sales process.
A solid pipeline management process gives sales managers visibility over all active deals. They can see how efficiently and effectively deals are progressing through the sales cycle. Moreover, they can analyze data to identify areas for improvement and look at future sales opportunities to make more accurate revenue forecasts.
All in all, sales pipeline management is a crucial practice for optimizing your sales process and driving revenue growth.
Sales Funnel vs. Sales Pipeline
The sales pipeline is often (and mistakenly) called by another name—the sales funnel—so let’s take a moment to go over the differences between these two terms.
What Is a Sales Funnel?
A sales funnel illustrates the buying process from the consumer’s point of view. A sales funnel allows you to better understand a consumer’s current relationship with your brand:
Top of Funnel – Are they simply aware of your brand?
Middle of Funnel – Are they interested in making a purchase?
Bottom of Funnel – Or have they converted into a loyal customer? (
A sales funnel is used to track and optimize conversions. By measuring how many Top of Funnel leads converted to Bottom of Funnel customers in a given time, you can understand how well your sales and marketing campaigns are performing—and whether or not you need to make any improvements.
What Is a Sales Pipeline?
A sales pipeline is a visualization of your sales process from the sales rep’s point of view. Each stage of the pipeline represents a task (or set of tasks) implemented by the sales rep. A typical sales pipeline might look like this:
Prospecting → Qualification → Demo → Proposal → Close → Retention
A sales pipeline enables you to gain insights into deals, analyze and optimize each step of your process, and more accurately predict revenue.
Now that we’ve differentiated between a sales funnel and a pipeline, let’s dive deeper into the different stages that make up the typical sales pipeline.
Key Stages of the Sales Pipeline
While every company’s sales process might look a little different, most will consist of six key stages: Prospecting, Qualification, Demo, Proposal, Close, and Retention.
Prospecting: Identify and reach out to prospective customers who fit your company’s target market criteria.
Qualification: Evaluate prospects (based on criteria such as budget, authority, need, and timeline) to determine if they are ready to move forward in the sales process.
Demo: Provide a demonstration (or presentation) of your offering to showcase key features and benefits to the prospect.
Proposal: Present a proposal, negotiate the deal, and handle objections.
Close: Obtain a signed contract or purchase from the customer.
Retention: Provide ongoing customer support and relationship nurturing to encourage repeat business, referrals, and long-term loyalty.
The Benefits of Effective Pipeline Management
When you have effective pipeline management in place, you gain valuable data and incredible visibility over every piece and player within your sales process. With a system in place for overseeing, analyzing, and optimizing your sales process, you will see numerous benefits.
Revenue growth: Companies with effective pipeline management strategies increase their average revenue growth rate by 15%, according to Harvard Business Review.
Accurate forecasting: Pipeline management enables you to track each deal’s progress and assess the likelihood and timing of closures. Combine that with key pipeline data—such as historical conversion rate, average deal size, and average deal cycle length—and you have a more accurate system for forecasting revenue.
Data-informed strategy development: By analyzing pipeline data and customer interactions, you can make more informed decisions regarding your sales strategy. Pipeline data helps you to:
Identify the most promising prospects and markets
Define audience segments
Set realistic goals and targets
Adapt quickly to market changes
Maximize individuals’ strengths
Effectively allocate resources
Process improvement: Monitoring deals and analyzing data can help you identify weaknesses and bottlenecks within each stage of your sales process. Whether you’re updating your qualification criteria or adjusting the timing of your follow-up, making these types of data-driven improvements will lead to a more efficient and effective sales process.
Best Practices for Pipeline Management
Sales pipeline management plays a key role in achieving sales success. By regularly monitoring and analyzing your sales process, you can make data-driven strategic decisions, predict revenue more accurately, continuously improve your sales process, and ultimately drive revenue growth.
Follow these best practices to ensure that you are optimizing your sales process to its full potential and squeezing every bit of value out of your pipeline data.
Choose the Right CRM
If you truly want to optimize and scale your sales performance, you can’t rely on mere spreadsheets and Post-Its. You need a powerful customer relationship management (CRM) platform to document, streamline, and automate your sales process.
Look for a CRM that has robust pipeline management features, such as:
Visual deal tracking: Choose a CRM that provides a clear visual overview of your entire pipeline and where each deal is situated.
Customizable stages: Look for a flexible platform that lets you add custom stages and organize your pipeline according to your existing sales process.
Sales automation: The best CRMs for pipeline management enable you to automate repetitive tasks like lead scoring and email follow-ups.
Key pipeline metrics: Be sure your CRM tracks average deal duration, stage-to-stage conversion rate, average deal size, and other key metrics.
Forecasting tools: Some CRMs include built-in forecasting tools to make it even easier to predict future revenue.
Integration capabilities: Check to see if the CRM integrates with your current tech stack (email marketing platform, accounting system, etc.).
One of the top CRMs for sales pipeline management is Pipedrive. Flexible, intuitive, and user-friendly, yet with robust tracking and reporting, Pipedrive checks all the boxes.
Standardize Your Sales Process
Before you start building out your pipeline in your CRM, it’s important to have a clear sales process established and standardized for all sales reps to follow.
To standardize your sales process, you should define the following:
Each stage of your sales process
Tactics implemented at each stage (the specific actions you take to prospect for leads, qualify them, nurture them, handle objections, close a deal, etc.)
Conversion criteria for when to move a deal to the next stage (e.g., after lead schedules time on your calendar, move to Demo stage)
Templates (email templates, phone scripts, presentations, contracts, etc.)
Once you’ve standardized your sales process, you can build it out in your CRM and get your entire sales team aligned. By establishing a clear set of steps, you achieve greater consistency, scalability, and efficiency in your sales operations.
Track the Right Metrics
A well-managed sales pipeline can provide valuable data for revenue forecasting. These insights can also be used to make data-driven decisions about resource allocation, lead nurturing tactics, and other strategic factors.
But if you’re not tracking the right metrics, you won’t be able to accurately make those crucial decisions.
Be sure the track the following key pipeline metrics:
Pipeline value (the total value of all deals in your sales pipeline)
Lead-to-opportunity conversion rate (the percentage of leads that become qualified opportunities)
Opportunity-to-close conversion rate (the percentage of opportunities that become closed deals)
Average deal size (the average value of closed deals)
Sales cycle length (the average time it takes to close a deal)
Deal aging (the length of time a deal has been in the pipeline without moving forward)
Pipeline coverage ratio (the ratio of pipeline value to sales goal; a higher ratio indicates a healthier pipeline)
Regularly Review and Update Your Pipeline
Frequent evaluations are necessary to keep your sales pipeline healthy. And it’s not just about maintenance but also continuous process improvement.
Every week, review the deals in your pipeline to see next steps and identify potential roadblocks. Look for new deals that have entered the pipeline, review key metrics, and adjust sales forecasts based on the week’s data.
Monthly pipeline reviews should involve the entire sales team. Look at last month’s performance metrics, identify challenges and opportunities, and make adjustments to sales strategies, and set new goals.
You should also review individual sales rep pipelines, and provide coaching or support as needed.
Collaborate With Your Marketing Team
An important aspect of sales pipeline management is ensuring that your sales and marketing teams are collaborating and communicating with one another.
Since sales and marketing have several overlapping goals—lead generation, nurturing prospects, and converting/closing—be sure to keep these goals aligned across departments.
Ensure that the marketing team understands the sales team’s criteria for high-quality leads, so they can tailor their lead generation strategies accordingly. In turn, the marketing team can share valuable information they’ve learned about prospects during the early nurturing process, allowing sales reps to provide a more personalized customer journey.
To maintain collaboration between the sales and marketing departments, sales managers should:
Schedule regular meetings to discuss goals, challenges, and progress.
Define the criteria for lead handoff from marketing to sales, including lead scoring and qualification criteria.
Provide cross-training opportunities for sales and marketing to learn about each other’s processes and challenges.
Implement collaborative tools and platforms, such as a CRM or sales automation platform, to allow for information sharing and collaboration.
Celebrate sales and marketing successes together, and emphasize that one department cannot succeed without the other.
Common Challenges in Pipeline Management and How to Avoid Them
There are several common challenges businesses face when managing the pipeline, which can ultimately lead to lower conversion success. Understanding these hurdles is the first step to overcoming them.
Inaccurate Data and Poor Lead Quality
The foundation of effective pipeline management lies in the quality and accuracy of your data. Incorrect data can lead to wasted resources, misinformed decision-making, and ultimately, a decline in sales efficiency.
You may be targeting the wrong individuals, chasing leads that are not a good fit for your products or services, or missing out on opportunities due to outdated contact information. To ensure data integrity, it's crucial to implement regular data cleaning processes, validate your leads' information continuously, and use reliable sources for lead generation.
Pipeline Blockages
Every sales process encounters obstacles that can slow down or even halt progress. These blockages might stem from internal issues, such as misalignment between your sales and marketing teams, or external factors, such as clients' hesitation or competitors' actions.
Identifying the root causes of these delays early on allows you to address them directly. Whether it's through better communication channels, improving your value proposition, or adjusting your sales tactics, taking proactive steps to remove these blockages can streamline your pipeline and accelerate your sales cycle.
Lack of Follow-Up
The end of a sale is just the beginning of a potentially long-term customer relationship. Failing to follow up adequately after a sale can lead to missed opportunities for feedback, referrals, or repeat business.
It's essential to have a structured system for post-sale follow-up that includes thanking the customer, asking for feedback, and keeping them informed about upcoming products or services they might be interested in. This not only helps in retaining customers but also in generating new leads through positive word-of-mouth.
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