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Sales Pipeline: Definition, Stages, and How to Build It

Last updated: Dec 24, 2023

Sales Pipeline: Definition, Stages, and How to Build It
Cover image: Illustration of sales pipeline track and monitor sales activities.

What is a Sales Pipeline?

A sales pipeline is a flow that depicts the entire sales process from beginning to end. This concept is often used to track and monitor both ongoing and completed sales activities. 

With this flow, you can identify the sales process, starting from prospect identification (prospecting) to the sale of a prospect or product

It also includes a sequence of strategies that the sales team must follow to improve the conversion rate from various prospects by identifying the number of potential customers along with their customer journey.

Within this pipeline, the sales and marketing team can observe how customers progress from initial interest to deciding to purchase a product/service. 

In addition, it can also increase business revenue opportunities. How is this done? Find out more in the discussion below!

Sales Pipeline Stages

In general, the sequence or sales pipeline stages are not always the same as business goals and resources differ from one another. 

Additionally, each business may have a different number of pipeline stages due to certain factors.

Nevertheless, in general, businesses usually implement marketing and sales techniques based on the following stages.

1. Prospecting

The first stage is prospect identification. This means that the marketing team is required to find prospects, potential customers based on specific segmentation, who may need the product/service. 

In order to identify prospects, the sales marketing team can apply suitable marketing plan and strategies, one of which is personalized marketing.

2. Qualifying

After identifying prospects, the next step is to determine if the identified prospects are suitable and appropriate.

The qualification stage may include activities such as surveys or even direct interviews with the target audience or potential customers. 

The sales team can determine suitable qualifications if the prospect meets the following criteria:

  • The prospect appears willing to make a purchase.
  • The prospect has proven need for the offered product/service.
  • The prospect has a budget to buy the offered product/service.

3. Contacting

If the prospect has passed the qualification test, the next step is to make an offer. This stage can be carried out with various marketing strategies. 

In essence, you need to convince the prospect that your product has more value compared to other competitors. 

Emphasize that the offered product/service is the perfect solution to the prospect's current issues. 

All these contacting activities can be done through phone calls, email marketingsocial media, or in-person.

4. Relationship Building

One of the goals of building connections is to make the prospect or potential customer trust the things conveyed by the sales team. 

With a connection established, the credibility of the sales team in the eyes of potential consumers can increase, thereby increasing positive responses at the end of the sales process.

5. Negotiation

Although the prospect already knows the advantages and value of the product/service, there is still a possibility that they may have doubts. 

Therefore, at this stage, the sales team must demonstrate good communication skills in front of the prospect and negotiate to eliminate any doubts. 

In the negotiation process, the sales team can clarify the problem-solving value to avoid seeming forceful in convincing the prospect to make a purchase.

6. Closing

Closing stage indicates whether the potential customer is interested and willing to make a purchase. 

If the sales deal has been reached, the prospect will usually make a purchase directly. However, in some more complex sales pipeline examples, the sales and marketing team may need to make additional efforts to successfully sell the product/service.

7. Customer Retention

Although successfully getting the prospect to make a purchase, the stage does not end here. 

Customer retention is a sales effort targeting old customers to make a purchase. Some methods that can be used to increase the retention rate include cross-selling or up-selling techniques.

How to Build A Sales Pipeline in Marketing

Now that you know what is a sales pipeline and its stages, let's learn how to build a sales pipeline examples that can effectively boost sales and revenue.

1. Identify Goals at Each Stage

The first step is to identify goals along with success metrics for each stage. The entire sales marketing team needs to understand the marketing goals to prioritize prospects with high potential in each stage. 

With planned goals, you can improve efficiency in utilizing resources to prioritize high-potential prospects first.

2. Define Target Market or Potential Customers

After setting goals, the next step is to determine the target customers and gather their contact information to facilitate the contacting stage. 

You can use a database to store contact information and segment potential customers for better organization.

3. Develop a Sales Plan

Designing a marketing plan beforehand can reduce errors in presenting products/services to potential buyers. 

Equipping yourself with a well-thought-out plan can also increase the optimism of the sales team, allowing them to focus more on sales activities and metrics within the marketing plan.

4. Lead Nurturing

Lead nurturing is a strategy to build relationships with prospects while increasing their trust in the products/services being sold. 

However, it's essential to note that lead nurturing doesn't mean you have to send messages continuously to potential buyers. 

Instead of building a positive relationship, such activities may make your offers look like spam. To implement lead nurturing, you can try strategies such as:

  • Social Media Marketing (SMM): Increase interaction through content marketing. Share content regularly and focus on building relationships with the audience visiting the content.
  • Email Marketing: Send personalized emails with relevant content to each target customer.
  • Personal Follow-Up: Contact target customers directly and personally.

5. Adjust and Update 

Another factor that affects the success of this strategy is its continuity. This means you need to navigate the success of each stage in this pipeline and regularly update it. 

If you have experimented with the above stages but find the results less effective, you need to refine the stages according to the needs and marketing goals of your business.

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