Sales Pipeline

What is a Sales Pipeline?

The sales pipeline is a visual representation of the steps leads go through before buying. It’s a crucial concept for businesses looking to increase revenue and grow their customer base.

In simpler terms, it’s converting leads into paying clients. Think of it as a “virtual pipeline.” Buyers move along different stages until they reach the end goal: closing a sale.

The 6 Stages of a Sales Pipeline Explained

A sales pipeline typically consists of 6 phases. They represent a specific step in the buyer’s journey and involve different strategies to move the potential client closer to making a purchase decision.

1. Prospecting

This is where businesses look for potential customers who fit their target audience. What this means is that you have to identify and qualify leads first. Then, you gauge their needs to determine if they fit your offerings well.

2. Lead Qualifying

The difference between prospecting and lead qualifying is that the latter focuses on gauging if a lead fits your target audience. Prospection, on the other hand, involves actively searching for potential clients. This determines the readiness of the leads to make a purchase.

3. Engagement

The aim here is to connect with qualified leads. Communication takes place through different channels to understand their pain points and needs. Sales email campaigns and content marketing are effective approaches at this stage.

4. Lead Nurturing

Now that you’ve built connections and rapport with leads, the focus is on sustaining it until they decide to buy  — lead nurturing. This can take time because not all leads are at the same stage of decision-making.

This is where nurture campaigns and follow-ups come in handy — providing personalized emails that offer valuable information to build trust with qualified leads.

5. Negotiation

This sales pipeline stage is about reaching an agreement that satisfies the profit requirements of the sale and appeals to the customer enough to close the deal.

Here, you’ll be negotiating pricing or payment methods or even incorporating event incentives such as discounts.

6. Conversion

At this stage, you’ve taken the lead all the way from prospecting to becoming an actual client. Conversion focuses on the exchange of deliverables, of course—but it also involves following up with the client to ensure lasting customer satisfaction with after-sales support.

How to Build a Sales Pipeline in 7 Steps

The stages mentioned above are clear, but how do you build and ensure an efficient sales pipeline? Here are 7 steps to follow that will help you in your quest:

You may have noticed that we didn’t include the final step of conversion—because data and metrics are an ongoing process. Tracking allows businesses to understand client behavior, make data-driven decisions, and adjust strategies for maximum results.

Sales Pipeline vs Sales Funnel

The image above describes the perspective each one follows — both aim to convert leads into clients.

That said, a sales funnel is a broader approach that involves all marketing efforts for lead generation, whereas a sales pipeline focuses on the sales stages of converting leads into customers.

A funnel is about attracting leads, whereas a pipeline is about converting them into paying customers.

Bottom Line

Whether you’re a small business or a large corporation, understanding the sales pipeline definition and effectively managing your own pipeline is crucial for driving revenue growth.

The biggest takeaway here should be knowing your target audience. This knowledge makes it easier for businesses to tailor their marketing and sales strategies and ultimately increase conversions.

The bottom line? Don’t neglect your sales pipeline—nurture it like a valued customer.

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