How it works
What is a Sales Pipeline?
A sales pipeline is a visual representation of where your prospects are in the buying journey. Each stage represents a step in your sales process, from initial contact to closed deal. A well-designed pipeline helps you forecast revenue, identify bottlenecks, and prioritize the right opportunities.
Defining Your Pipeline Stages
The most common pipeline stages map to the buyer's journey:
Stage 1: Lead
A new contact who has shown interest but hasn't been qualified yet. This could be a website form submission, trade show contact, or referral.
Stage 2: Qualified
The lead has been contacted and meets your ideal customer profile (ICP). They have a need, budget, and timeline that aligns with your solution.
Stage 3: Proposal
You've presented a solution and pricing. The prospect is evaluating your offer alongside potential alternatives.
Stage 4: Negotiation
Terms are being discussed. This stage covers contract reviews, pricing negotiations, and procurement processes.
Stage 5: Closed Won / Closed Lost
The final outcome. Tracking both wins and losses helps you understand conversion rates and improve over time.
Pipeline Management Best Practices
Keep Your Pipeline Clean
Remove stale deals that haven't progressed in 30+ days. A bloated pipeline gives false confidence and makes forecasting unreliable.
Track Conversion Rates Between Stages
If 80% of deals stall at the Proposal stage, that tells you something needs to change in how you present pricing or handle objections.
Use Weighted Pipeline Values
Assign probability percentages to each stage. A $10,000 deal at the Proposal stage (50% probability) contributes $5,000 to your weighted forecast.
Review Pipeline Weekly
Set a regular cadence to review pipeline health with your team. Focus on deals that need action and opportunities that are at risk.
Optimizing for Conversion
The key metrics to track for pipeline optimization:
- Conversion rate by stage - Where are deals dropping off?
- Average deal velocity - How long does it take to move through each stage?
- Win rate - What percentage of qualified deals close?
- Average deal size - Is it trending up or down?
By consistently monitoring these metrics, you can make targeted improvements that compound over time.