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How to Manage a Sales Pipeline

Maintaining a healthy sales pipeline is a delicate balancing act. As you guide prospects down the funnel, it's important to maintain their interest without overwhelming them (or your sales team, for that matter). To achieve this balance, businesses need to track and optimize their customer acquisition process. 

In this article, we’ll discuss sales pipeline stages, the importance of sales pipeline management and best practices, and some of the tools that organizations use to optimize their sales pipelines.

What is a sales pipeline?

A sales pipeline is the process by which a deal moves through different sales stages to a successful close. In addition to streamlining sales activities, a sales pipeline can help forecast future sales by predicting revenue and cash flow.

Why a sales pipeline is important

Maintaining a sales pipeline is essential to bringing in more revenue; monitoring each prospect's journey through the pipeline stages provides more insight into the overall sales cycle. 

Simple CRM Template
Simple CRM Template

An optimized sales pipeline with a clearly defined process can benefit an organization in multiple ways. Sales pipelines:

  • Provide more visibility to the status of ongoing accounts
  • Reveal the value each client brings to the business
  • Provide the ability to assess opportunities for upselling and cross-selling
  • Enable managers to access detailed reports on employee performance and the quality of clients they are bringing in
  • Allow for more accurate sales forecasting
  • Let you establish better performance benchmarks based on historical data
  • Boost overall revenue 

When building an optimized sales pipeline, begin by determining the best performance metrics. These can include:

  • Qualified leads 
  • Marketing Qualified Lead (MQL) to Sales Qualified Lead (SQL) conversion rate
  • Prospects
  • Opportunities
  • Meetings booked
  • Deals closed
  • Lead-to-customer conversion rate
  • Win rate
  • Sales cycle length
  • Deal size
  • Pipeline value
  • Customer acquisition cost (CAC) and Customer lifetime value (CLV/LTV)
  • CLV to CAC ratio

Sales pipeline stages

An effective sales pipeline consists of the following stages:

Stage 1: Lead Generation and Prospecting

While “lead generation” and “prospecting” can be used interchangeably in smaller organizations, larger companies with more defined sales cycles separate the two. Both are crucial components of the sales process, but indicate different levels of interest in your products or services.

A lead
is a person or company who expresses an interest in your product or service by visiting your website, downloading a piece of marketing collateral, or signing up for a free trial. Often, lead generation is the responsibility of marketing departments.

A prospect is a qualified lead, defined as having a high potential of becoming a customer. Typically, sales teams are responsible for prospecting.

Sales and marketing teams often have different goals when it comes to generating leads. To create an efficient customer acquisition program, aligning these departments’ goals is essential.

Creating a customer persona based on research or first-party data can also simplify lead generation and prospecting. Understanding the typical buyer allows for more precise targeting and contributes to higher conversion rates.

With a solid top-funnel process in place, this stage becomes effortless. And instead of handling leads and prospects manually, consider using a CRM tool that can automate a part of this process. Spreadsheet.com’s Simple CRM template, for example, lets you set up an automation that sends your team notifications when the lead status changes:

Automation: Lead Stage Change Notification
Automations: Lead Stage Change Notification

Stage 2: Qualification

The qualification stage helps prioritize sales efforts by segmenting leads based on quality. During this stage, identify leads’ pain points and guide them further down the funnel by offering materials that position your organization as the right solution.

This can be done by sharing case studies, white papers, newsletters, video demos, webinars, and presentations. If prospects continue expressing interest in learning more about your product or service, you can progress them to the next stage.

Stage 3: Demo or meeting

Scheduling a meeting or product demonstration is a pivotal stage in the sales pipeline. In this stage, work on developing a relationship with the prospect, as 71% of buyers report purchasing from salespeople they like, trust, and respect.

By conducting a product demo or a deep dive into the services, demonstrate how your prospect’s company can benefit from your product. 

Establish a clear agenda and tailor the presentation to each customer. Present your product as the best solution, address your prospects' concerns, and highlight the benefits of your offering.

At this point, you can also introduce an additional feature or an extended subscription if your prospect appears receptive.

Stage 4: Proposal

If your prospect is receptive to your meeting or demo, the next step is to draft a proposal. Keep in mind that at this stage, personalization is still important. Customize the quote to address customers’ pain points and reaffirm that they’re making the right decision. ‍

To streamline this process, consider using Spreadsheet.com’s Quote Template:

Quote Template
Quote Template
Stage 5: Commitment

Also known as the negotiation stage, this is when you finalize the terms of the contract. Ensure that any last-minute questions are clarified and use this opportunity to positively influence buyer decisions.

Consider an increase or decrease in the scope of work to close the sale and be ready to speak to your product’s competitive differentiators.

Stage 6: Closing

Closing a deal is the final step in the sales pipeline. By this stage, you should have clarified all of your customer’s questions and addressed their concerns. Pay close attention to every detail, as leaving questions unanswered can result in an unsigned contract. 

Stage 7: Post-purchase

The contract may be signed, but the work of a sales professional is never finished. Continue to keep in touch with newly-acquired customers throughout their journey with the organization. 

In addition to achieving a sales quota, building a solid relationship with customers will help secure repeat business. It also offers you the opportunity to upsell or cross-sell.

Maintaining contact with your customers can also reduce churn and obtain more qualified leads through word-of-mouth.

What is sales pipeline management?

Your sales pipeline is an ever-evolving entity. The process of managing it involves monitoring how opportunities move through the stages and identifying areas of improvement.

Regularly evaluate your pipeline stages, A/B test options to see what works best, and remove unproductive steps or add new ones if necessary.  Since every company's sales process is unique, your sales pipeline should reflect the typical buyer's journey.

Here are some ways to effectively manage your pipeline:

Track pipeline metrics

Identifying key metrics is essential to effectively managing a sales pipeline. Analyzing this data reveals underperforming stages and helps you fine-tune the process.

Fine-tune lead follow-up practices
Before dropping unresponsive leads from your pipeline and marking them as “closed lost”, make sure you put in enough effort to follow up with them and attempt to convert them to “closed won”. Consumers today have a wide variety of options and often speak with many sales teams before signing a contract. An unresponsive lead may still be interested in your product even if they’re exploring other options. 

Use tools to set up reminders and get notified when it’s time to follow up with a prospect. With Spreadsheet.com’s automations, you can quickly build out lead nurture paths.

Conduct regular pipeline reviews
Through pipeline reviews, your sales team can examine the quality of the opportunities currently in your funnel. Pipeline reviews give the sales manager and representatives a more comprehensive view of the pipeline, allowing them to focus on qualified leads first.

Keep the sale cycles short
Around 74.6% of B2B sales take at least 4 months to close, and 18% take up to 12+ months. Having a long sales cycle can impact the effectiveness of a sales process.

Some sales cycles are bound to take longer depending on the industry and the customer base, but a shorter sales cycle allows sales reps to connect with more prospects and drive more revenue. 

Additionally, the longer your sales cycle is, the more chances prospects have to find alternatives. Increase the probability of success by reducing the time between follow-ups and provide potential clients with as much information as possible upfront to shorten their decision-making process.

Focus on quality leads

Having a high volume of leads may seem like a good problem to have, but a lack of proper prioritization can result in lost opportunities. 

One way to focus on the most promising leads is to build a sales dashboard that groups leads based on quality. This allows you to follow up with leads that have the best chance of converting. With Spreadsheet.com's Sales Pipeline template, for instance, you can group prospects according to different criteria:

Sales Pipeline Template
Sales Pipeline Template

Because pipeline management focuses on how you sell to your customers, mapping out and fine-tuning your pipeline step-by-step can help supercharge your sales process.

Sales pipeline management tools

With the help of a CRM tool, data from your sales pipeline can help organizations optimize their sales operations and forecast more accurately. CRM tools allow organizations to visualize pipeline stages and maintain a healthy top, middle, and bottom of the funnel to meet organizational sales targets.

With Spreadsheet.com's Sales Pipeline template, sales teams can optimize their outreach efforts and manage leads more efficiently.

A centralized dashboard, real-time insights, and automated workflows provide insight into key metrics and automate the busy work away.

Explore all Sales & CRM tools in our template gallery. 

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