Understanding and prioritizing your sales pipeline can help you increase sales. After all, the more you know about your prospects, the more targeted your approach can be. But, what is a sales pipeline and how can it help you bring in more revenue?
A sales pipeline covers every stage of your sales process, helping you track opportunities as they move from stage to stage based on specific actions. The term “pipeline” comes from the idea that deals travel along a set path, from initial contact with salespeople to consideration to closing the deal.
Pipelines also provide an overview of each sales rep’s account forecast, how close he or she is to making quota, and how close the team is to reaching quota.
The terms sales pipeline and sales funnel are often used interchangeably, but they have real differences.
A sales pipeline focuses on the predefined sequence of actions that need to occur to move a prospect through the purchasing process. Once each stage is completed, the prospect moves to the next one. This allows sales reps to track the status of every deal.
On the other hand, a sales funnel visually communicates the conversion rate of prospects as they move through the pipeline stages. It’s called a “funnel” because of its shape: wide at the top as prospects enter, then increasingly narrow as prospects are removed (as a result of being unqualified or deciding not to buy).
To sum up the difference in one sentence: a sales pipeline shows what actions need to happen during the sales process and a sales funnel shows the conversion rate during that sales process.
While every company and every sales rep uses different sales methods, the actual stages of the sales pipeline are very similar. At a high level, you identify new leads, get in contact with them, and evaluate whether they are a good fit for the product or service before closing the deal.
Here are the seven stages in the sales pipeline:
How do you know if your sales pipeline is healthy? Here are five metrics to track:
The real power of your sales pipeline comes when you can manage it in a CRM, letting you automate your pipeline and getting greater visibility into the sales process.
Here are three ways to manage and automate your sales pipeline in a CRM:
For an in-depth guide to automating your sales process, read our ebook, “In the Pipeline: Keep, Convert, and Close More Leads in Less Time with Automation.”
A sales pipeline offers a concrete, actionable view into how your sales process is performing. It answers questions like, “Will we reach our quota?” “How many deals are going to close this week?” and “Which part of our sales pipeline is the weakest?” Ultimately, it creates the foundation for you to convert prospects, leading to more sales.
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