Welcome to the definitive guide to sales pipeline management! If you've got questions, we've got answers. This guide provides a high-level overview of all things pipeline-related, including:
Why is a sales pipeline important?
What are the sales pipeline stages?
Building a sales pipeline
Steps to increase your sales pipeline
How to clean up your sales pipeline
How to monitor your sales pipeline
Sales pipeline metrics
The sales pipeline report
How to run a sales pipeline review
Sales Pipeline Management Software
Sales pipeline vs. sales funnel
Common sales pipeline mistakes
Before we get into the various pieces and best practices of the sales pipeline, let's start with the basics.
The sales pipeline is the visualization of the flow and volume of a company’s revenue opportunities (AKA potential sales) in a given period.
The primary function is to provide a snapshot of key sales elements, such as:
The number of open deals/opportunities, as well as their individual and aggregate monetary values.
The sales potential of each seller as well as the entire sales team for a given period.
The different stages that comprise a company’s sales cycle or process.
The status of each open deal with respect to the sales cycle and all the actions that have been performed to engage the opportunity.
The activities that still need to be performed to move each opportunity to the next stage of the sales cycle
The sales pipeline provides visibility into sales opportunities and serves as a quick look into a company’s health, profitability, and growth. Sales pipelines enable business leaders to make revenue forecasts, analyze process efficiencies, identify problem areas, plan corrective measures, and take other strategic actions.
Advanced sales pipeline visual representations (such as those generated by Outreach Commit) show how fast each opportunity is moving through the sales funnel. This makes it possible to determine the optimal velocity for each type of customer or product, as well as the sales team’s revenue efficiency. Visualizations of sales pipeline helps sales teams streamline their sales cycles and close higher-value deals faster.
Sales pipeline stages correspond to the stages in your business’ sales cycle or process. Depending on the industry, vertical, ideal customer profile, and other factors, different organizations have different sales cycles.
It is wise to closely align your sales cycle with your target customers’ buyer journey. Adopting the right sales cycle (and its component phases) is critical because doing so provides sellers with an effective process or model to follow. Determining the right sales pipeline stages enable salespeople to sell more, faster.
Identification of Decision Makers
Because business success depends on having a healthy pipeline, building an efficient one at the onset is critical. Here is an example 7-step process for building a happy, healthy B2B sales pipeline:
Start with the customer and the buyer journey. Determine your ideal customer profile (ICP). Learn from direct competitors. Study how the best players in your market build their respective sales pipelines. Build a list of target companies and decision makers based on your market and ICP.
Define the stages of your sales cycle. Get insight from the workflows, sequences, or playbooks used by your top sellers. Adopt applicable practices — if any — from successful competitors.
Establish a sales process for the team. Populate the process with the stages previously defined in step two. Clearly define those stages and customize your tools (CRM, automations, etc.) to reflect those stages. Establish thresholds/criteria for lead qualification. Develop and enforce effective follow-up sequences.
Determine the best performance metrics to monitor and optimize for both team and individual sellers.
Set performance goals.
Accept that your sales pipeline is imperfect. Use A/B tests to dynamically improve different elements of your pipeline.
Use the best tools and technologies that match your business, team, and sales process. Create and iterate email templates, call scripts, demo videos, premium content, and other sales and marketing assets.
There’s no one-size-fits-all sales pipeline formula for success. In an ideal world, pipelines are always full, flowing, and flourishing, but in the real world there is always room for improvement. Here are some tactics to get your pipeline as close to ideal as possible:
Align sales and marketing. Lead generation is your friend! Never execute separate strategies.
Improve your outbound sales strategies. Continuously refine your cold call and email campaigns.
Leverage social selling to refresh your pipeline with new leads.
Ask for referrals.
More leads in your pipeline does not always mean more deals closed. If the quality of those leads are questionable, then you risk wasting resources and time on prospects that do not offer value for your business. It’s far better to work with fewer high-value leads.
This is why you need to Marie Kondo your sales pipeline regularly. Hoarding leads only creates mess and confusion! A clean and high-quality pipeline translates to higher process efficiency, deal values, and win rates.
Do these leads bring you joy?
Here are some ways you can maintain a clean and joyful pipeline:
Keep all information about prospects updated and accurate. Is contact data accurate? Have you moved the prospect in the proper stage of the sales cycle? Are new leads entered in the system?
Review the status of prospects that have remained stuck in a stage for longer than usual. Identify which factor(s) likely caused a roadblock and see if you can fix the issue. If there’s no viable solution, purge these prospects so you can focus more on higher-value leads.
Send breakup emails to prospects you decided to purge. If the response is favorable, keep the prospect in the pipeline. Otherwise (negative or no response), proceed with the purge.
Conduct pipeline maintenance on a regular basis, every 3-6 months.
Your company’s sales pipeline not only reflects its profitability during a given period but also reveals issues that impede and factors that propel sales flow. That means that you need to tune into your pipeline for better sales performance.
Best practices for sales pipeline monitoring:
Establish and follow a schedule for pipeline monitoring.
Use platforms that provide complete pipeline visibility via a full-featured dashboard.
Track the key metrics (see next section) that affect pipeline flow and sales performance.
Keep account details updated. Tag stale accounts/dead leads for purging.
Prioritize high value deals and work towards faster sales cycle flow.
Identify the most effective teams, sellers, sequences and techniques that drive success in each stage of the sales process.
Determine which sales teams and individual sellers need further support to achieve targets.
Verify whether closed deals are being nurtured by customer success.
The following metrics will help you assess pipeline health and sales team performance:
Number of new leads per month - the average number of prospects tagged as Sales Qualified Leads (SQL) and/or Sales Accepted Leads (SAL) every month.
Number of deals - the number of SQLs the team or an individual seller is currently engaging.
Pipeline value - the estimated total value of qualified opportunities currently active in the pipeline.
Average deal size - the average value of deals in the pipeline.
Average sales velocity - the average time it takes sellers to move prospects from starting stage to final stage of the sales cycle. (AKA sales cycle length)
Monthly Recurring Revenue (MRR) - the amount of predictable revenue a company expects to generate every month. This is most common in subscription-based businesses.
Win rate - the percentage of leads that become paying customers.
Lead response time - the average time sellers follow up after a prospect takes a lead-qualifying action.
Time spent selling - the percentage of the time a seller spends actually selling (not doing admin tasks, etc.).
Activity logs such as number of calls made in a day, number of prospects engaged, and number of meetings set.
A sales pipeline report summarizes the efforts, productivity, and performance your team delivered in a specific slice of time (start date to end date). At the basic level, the report shows how many deals are active across the stages of your sales cycle and the total value these deals represent.
Some reports also show summaries of activities and metrics that directly impact sales performance and team productivity. These include:
the number of prospects generated during the period
the number of emails sent and the ratio of these emails that were opened, clicked, and responded to.
the number of inbound and outbound calls made during the period and the ratio of answered calls.
Data from a sales pipeline report allow you to have a clear picture of pipeline growth over time, make revenue predictions, and gain strategic insight into how best to achieve your business goals moving forward.
Sales pipeline reviews ensure that everyone on the team is on the same page, executes the same gameplay, and aims for unified goals. These reviews are meant to drive productivity and purpose, but they can seem like a waste of time to busy sellers.
Follow the following steps to make your sales pipeline reviews as efficient and productive as possible:
Do your homework. Conducting the review unprepared is a sure ticket for wasting time and leaving everyone more confused than enlightened. Research and collect pipeline data on the topics you want covered. Prepare for the meeting like you are giving a keynote address.
Organize the review into meaningful chunks. Don’t jump from topic to topic, metric to metric without any sense of relevance or cohesion. Reviewing the pipeline by sales cycle stages is a good place to start.
Identify issues. Point out factors that derail pipeline flow or make things difficult for sellers or customers. Provide actionable solutions that address these factors.
Be brief but powerful. Much of sellers’ time is already taken by admin tasks and other non-sales activities. Refrain from making things worse. Adopt a brisk pace and avoid discussing side topics or spending too much time on one single issue.
Leave everyone with valuable tips and a call to action. Whenever possible, provide easy tactics that make sellers’ jobs easier and get them closer to their goals.
Every sales team needs a CRM, but teams with bigger ambitions need a little extra sumthin’ sumthin’ to help them be their most efficient and productive selves.
Sales Pipeline Management Software can do that for you. This technology focuses on optimizing your sales process to help you maintain a healthy pipeline that flows with greater-value deals in shorter sales cycles. Sales Pipeline Management Software enables you to analyze and optimize every stage of your sales process, keeping more opportunities moving towards a successful close and preventing valuable deals from slipping through the cracks.
Some of the popular Sales Pipeline Management Solutions include:
An advanced pipeline management solution such as Outreach adds a layer of predictability in your process. They show you which activities drive the best outcomes so you can draw up strategies that move the needle on the metrics you prioritize. For example, Outreach uses data analytics to show you the best times, channels, and sequences for positive customer engagement.
The more actionable insight you have that is based on real-world data, the more productive, efficient, and profitable your sales organization becomes. Many sophisticated pipeline management tools not only provide full process visibility but also drive seller productivity. Outreach helps sales reps book more meetings with customers through AI-assisted voice and email functionalities. It comes with tailored messaging, A/B testing, custom schedules, and other features that adapt to your sales pipeline template. You can also generate data to show which sellers need coaching/mentoring on specific skills or knowledge areas.
Outreach's Sales Execution Platform connects your sales activities with outcomes to identify the most effective workflows — and keep your sales pipeline on track.
Taking the subjectivity out of forecasting makes it easier to stay proactive and keep deals moving forward. By using our revenue operations solution Outreach Commit and our revenue intelligence solution Outreach Guide, we can determine which deals are worth spending more time on — and which ones aren’t.
The terms sales pipeline and sales funnel are often used interchangeably and considered synonymous, but they are actually completely different concepts.
A sales funnel visualizes the lead qualification process: a large number of potential prospects enter the wide top of the funnel and only a few exit out the the bottom as customers.
Once a prospect has been classified as a Sales Accepted Lead, the sales pipeline often takes the spotlight as the new conduit.
The sales pipeline shows the different stages in your company’s sales process and how the SALs are distributed in these stages. It also shows successive conversion rates as prospects are either qualified or disqualified to move further and the activities sellers perform to move leads from one stage of the sales process to the next.
Left to its own devices, a sales pipeline can’t help but degenerate. It will either run dry without fresh deals coming in, or become bloated and inefficient with slow-moving deals that promise zero to little value. Either way, sales performance plummets.
Here are some big-time mistakes to avoid if you hate waking up to the worst case scenarios:
“Our product is great, people will come.” They probably won’t unless you empower your marketing and outbound people. Lead generation fuels your revenue performance.
“More is better.” More leads finding their way into the pipeline does not automatically translate to better performance. Bad leads snatch away time and resources that you can allocate for high-quality leads instead.
“Waiting for the big catch.” Focusing on high-value leads is good, obsessing over them at the expense of low-hanging fruit is wasteful. Be flexible and gather what you may while waiting for the big ones to respond.
“Relying on tech more than training.” Well-trained sellers serve as the backbone of any sales organization. However advanced your tech arsenal is, it won’t matter if your sellers are firing blind.
“Last-minute coaching is better than nothing.” Perhaps due to the prestige and excitement of closing deals, sales leaders often neglect the mentoring needs of their team at the early stages of the sales cycle. Unfortunately, this is where seeds of success are planted.
“One follow up is enough.” No it isn’t. Some companies have seven or more follow-up sequences to keep leads from slipping through the cracks.
“Sell fast, sell more.” The trouble occurs when this is taken to the extreme. Trust-based relationships take time to build and some prospects need more nurturing than others. Practice empathy and avoid forcing valuable leads to make negative decisions just because you want them to make the purchase NOW.
“Incomplete metrics.” Establish a set of metrics that will give you a comprehensive and accurate picture of your processes, people, and performance. Don’t select only the metrics you want. Adopt every metric you need.
“It will clean itself.” Even a streamlined and highly efficient pipeline needs periodic maintenance and cleaning.