What is a Sales Pipeline?

A sales pipeline is a visual tool used to track potential customers as they progress through different stages of a company’s sales process. A sales process is a predetermined set of actions that a sales team uses to convert a lead into a closed deal.

A good CRM will have the tools to create, manage and measure sales pipelines.

Sales pipeline example

In this example, our fictitious glazing company, Glazemasters, provides residential glazing within a 30-mile radius of its business unit. The company uses a simple sales pipeline with five stages.

Lead in

Glazemasters generates most of its work via its website. Some visitors submit enquiries requesting a callback; others call the office directly. The team records the details of these leads in a CRM and assigns the initial status: Lead in.

Lead qualified

A lead progresses to this stage of the pipeline once it’s met the business buying criteria. So, does the potential buyer have the means to afford the glazing services? Is the lead’s place of residence within 30 miles of Glazemasters?

Survey complete

After an initial survey of a lead’s property, a glazier evaluates the required materials and labour.

Quote sent

An admin costs up a job and emails a quote to a lead for consideration.

Won

Hooray! A deal is closed when a lead accepts a quote.

Multiple pipelines

A company can have more than one sales pipeline. Different services may require different sales approaches and, therefore, different pipeline stages.

Post-sale teams might also want their own pipeline. Say Glazemasters in the above example wants to track installation and payment, they could create deals that move through another pipeline: 

Installation Booked > Installation Complete > Customer Invoiced > Customer Paid

It would be perfectly reasonable for Glazemasters to include these stages in the main pipeline; however, separate pipelines define the concerns between teams: sales can focus on closing, and operations and finance can organise work and payment.

Measuring sales pipelines

A sales pipeline provides a wealth of information and can answer management questions such as:

  • How much potential revenue is in the business?
  • How long does it take for a deal to close (average sales cycle)?
  • How has a recent change in our business affected the rate we now close deals?
  • What is our average deal size?
  • What are the most common reasons for losing a deal?

In closing 😉

A sales pipeline is an essential concept in business, and with a good CRM, you’ll be able to manage and measure your sales process with efficiency and confidence.

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