A guide to sales pipeline — benefits, stages and more.

A sales pipeline is a structured visual representation of your business deals in progress, outlining each step your sales team follows to secure and close them. It provides critical insights into which deals are likely to close, their potential value, and how effectively your team is performing.

In this guide:

• What are the benefits of a sales pipeline?
• How is a sales pipeline different from a sales funnel?
• Things you should consider before building a sales pipeline
• What are the 6 stages of a sales pipeline?
• How to build your own pipeline
• How to evaluate a sales pipeline
• Common sales pipeline mistakes you should avoid

Benefits of a sales pipeline.

Incorporating a sales pipeline into your sales strategy offers several advantages:

1. Enhanced deal visibility: Sales pipelines provide detailed insights into active deals, helping sales reps identify and prioritize high-value opportunities.
2. Improved team performance measurement: Managers gain visibility into individual and team performance, enabling targeted coaching, recognition of top performers, and support for underperformers.
3. Accurate revenue predictions: Pipelines provide clear data on the value of deals and their likelihood of closing, allowing for precise revenue forecasting.

Sales funnel vs. sales pipeline.

While often used interchangeably, a sales funnel and a sales pipeline are distinct concepts:

• Sales funnel: Focuses on the buyer’s journey, mapping the customer’s progression from awareness to purchase. This perspective is typically used for marketing but also intersects with sales at the later stages.
• Sales pipeline: Represents the seller’s journey, outlining the steps sales teams take to engage leads, nurture opportunities, and close deals. It is a tool designed specifically for sales operations.

What to consider before building a pipeline.

Before designing your sales pipeline, it’s essential to gather specific information about your target audience, company objectives, and team processes. Here are three key prerequisites:

1. Understand your prospects: Build detailed buyer personas that include both quantitative data (such as industry and company size) and qualitative insights (such as pain points and challenges). This information allows for a more tailored pipeline.
2. Define clear goals: Set measurable targets for both the team and individual reps. These benchmarks enable you to track progress and address gaps in the sales process.
3. Collaborate with your team: Involve your sales team in the pipeline design process. Their input ensures the structure reflects real-world workflows and promotes buy-in for the new system.

Stages of a sales pipeline.

To make the concept of a sales pipeline more tangible, here is an example of how a B2B software company might navigate through the stages when selling a project management tool to a mid-market organization.

1. Lead generation.

The software company identifies potential clients by leveraging data from industry conferences, LinkedIn connections, and website traffic analytics. For instance, they notice that a mid-market organization frequently visits their website and downloads guides on project management topics. This organization is added to the lead list for follow-up.

2. Qualifying leads.

The sales team reaches out to the organization to assess their needs. Through conversations, they discover the organization is struggling with task tracking and team collaboration — issues the software directly addresses. Using criteria like company size, readiness to buy, and potential revenue, the team ranks this lead as high priority for further engagement.

3. Consultation.

A sales representative schedules a product demo tailored to the organization’s challenges. During the session, the rep highlights features like real-time collaboration and tool integrations. They provide a customized proposal showing how the software can align with the organization’s existing workflows and solve their pain points.

4. Negotiation.

After the demo, the organization expresses interest but requests adjustments to pricing for multiple licenses. The sales rep negotiates by offering volume-based discounts and an extended trial period to ensure the organization is confident in their investment.

5. Closing.

The organization accepts the proposal. Contracts are signed, and the client is handed off to the onboarding team for implementation. The onboarding team provides training and support to help the organization integrate the software seamlessly into their operations.

6. Follow-up.

A month after implementation, the sales rep follows up with the client to ensure satisfaction. This follow-up builds trust and loyalty, opening opportunities to discuss additional features, upgrades, or services in the future.

How to build a sales pipeline.

Creating an effective sales pipeline involves the following steps:

1. Identify prospects: Use customer relationship management (CRM) tools to organize and manage your leads.
2. Define pipeline stages: Tailor the stages to your sales process, making sure each reflects a clear step in the buyer’s journey.
3. Set metrics: Track how many prospects typically move through each stage and the time spent at each phase. This helps refine your pipeline for better results.
4. Assign activities: Clearly define the actions needed at each stage, such as follow-ups, demos, or proposal submissions.
5. Track and optimize: Regularly review pipeline metrics to ensure they support your goals. Refine stages or processes as needed.

How to evaluate your sales pipeline in 7 steps.

1. Measure key pipeline metrics.

Start by tracking essential metrics that give insight into the health of your pipeline. These include:

• Sales velocity: This measures how quickly deals move through your pipeline. A high velocity indicates an efficient sales process, while a low velocity may point to bottlenecks or inefficiencies.
• Conversion rates: Track the percentage of leads that advance from one stage to the next. This helps identify weak points where leads frequently drop off.
• Average sales cycle length: Understand the average time it takes to close a deal. A shorter sales cycle typically leads to higher productivity and revenue.
• Pipeline value: Evaluate the monetary value of all deals in your pipeline and compare it to your revenue goals. This helps you determine if your pipeline is large enough to support your targets.

2. Analyze team performance.

Use your CRM or analytics tools to assess individual and team performance. Focus on:

• Quota attainment: How well are your sales reps performing against their goals? If reps consistently miss quotas, investigate the root cause — are there too few qualified leads, or are deals getting stuck at a specific stage?
• Activity levels: Review the number of outreach efforts, follow-ups, and client interactions. Low activity may indicate the need for additional coaching or support.
• Closing rates: Identify your top performers and analyze their approach. Sharing these best practices across the team can improve overall performance.

3. Identify bottlenecks.

Pinpoint where deals are getting stuck in your pipeline. Common issues include:

• Leads lingering in the qualification stage due to unclear criteria
• Delays during negotiations caused by unclear approval processes or inflexible pricing structures
• A lack of follow-up with leads after a proposal is sent, leading to cold or abandoned deals

4. Conduct regular pipeline reviews.

Schedule recurring pipeline reviews to maintain accountability and identify opportunities for improvement. During these reviews:

• Meet with reps individually: Ask each salesperson to summarize their active deals and discuss any challenges they’re facing. Offer actionable feedback and help them create a plan for moving deals forward.
• Collaborate as a team: Review pipeline performance as a group to encourage shared learning and problem solving.

5. Utilize CRM tools for insights.

CRMs provide robust reporting capabilities that can streamline pipeline evaluation. Use these tools to:

• Track historical trends in pipeline performance
• Segment pipeline data by team, individual rep, or deal stage for a granular analysis
• Generate reports to share with stakeholders or adjust sales strategies

6. Act on insights.

After evaluating your pipeline, implement changes to address identified issues. Examples include:

• Adjusting qualification criteria to ensure high-quality leads enter the pipeline
• Streamlining negotiation steps to reduce delays
• Training underperforming reps on effective sales techniques

7. Refine your pipeline over time.

Pipeline evaluation is not a one-time task. Treat it as an iterative process, making incremental adjustments based on data and feedback. This ensures that your pipeline evolves with market conditions and business goals.

Common sales pipeline mistakes.

Avoid these pitfalls to maintain an effective sales pipeline:

1. Neglecting pipeline maintenance: Regularly update and clean out stagnant deals to keep your pipeline focused and efficient.
2. Prolonged sales cycles: Shorten unnecessary steps to reduce friction and improve conversion rates.
3. Poor communication: Ensure seamless handoffs between teams to avoid losing prospects during transitions.
4. Insufficient lead qualification: Misaligned leads waste resources. Use robust qualification criteria to focus on high-value opportunities.
5. Overlooking certain stages: Balance resources across all pipeline stages for consistent performance.

Getting started with your sales pipeline.

A well-maintained sales pipeline enhances forecasting, improves efficiency, and boosts your team’s ability to close deals. Consider implementing CRM tools, like Adobe Marketo Engage, to automate tasks, nurture leads, and track progress effectively.

When combined with other Experience Cloud products, the uniquely personalized nurturing campaigns and robust scoring capabilities of Marketo Engage can help your team develop and qualify potential buyers well before they're passed on to sales.