Sales pipeline: how to create and manage an effective sales pipeline?

When we talk about a sale, we usually refer to the closing: the completion of the transaction. This is the moment every salesperson looks forward to. But upstream of the close, there's a whole process, with the multiple steps followed by the prospect until he or she is (finally) transformed into a satisfied, happy and loyal customer. This process is known as the sales pipeline.

This expression is no stranger to you. It's a popular buzzword. Salespeople use it indiscriminately: "Put your contacts in the pipe" or "Are there any prospects in your pipeline?". But there's more to the term than just buzzwords. The pipeline is an essential tool for any sales team, and its proper use can make all the difference in terms of performance.

In fact, the stages of a sales pipeline help your team to better understand the transactional process and prospects' behavior throughout the sales cycle, from first contact to contract signature. It allows you to see where transactions are stagnating, stalling or declining, and what steps need to be taken to close them. Without integrating this tool into your CRM (and training it in your sales performance software so that it's firmly integrated), you're missing out on vital information about the effectiveness of your sales process.

In this article, you'll discover what a sales pipeline is, how to create it step by step, and above all how to manage it effectively so that it helps you reach your sales targets by capturing as many opportunities as possible. And, as a result, you'll earn extra income!

What is a commercial pipe?

Does the word "pipeline" conjure up bad memories of high school geography classes, devoted to the meticulous examination of gas and gas pipeline networks on illegible maps? Rest assured, there's no question here of delving into the intricacies of international energy policy. The gas pipeline in question is not used to transport fluids over long distances, but to carry prospects from one end of the sales process to the other.

The sales pipeline: a simple definition

To give a definition of the sales pipeline, we can summarize it as follows: it's the visual representation of a sales process. This representation is made up of the succession of stages a prospect must go through to move from the status of a simple contact to that of a customer.

This makes the sales pipeline a strategic tool for visualizing the major stages of a sales cycle and all the opportunities to be seized by sales teams. Sales teams follow prospects as they progress through the buying process, and implement the necessary actions to bring them to conversion.

Beyond its "sales tunnel" aspect, the sales tube also plays the (essential) role of a database. It provides sales staff with all the information they need to manage their opportunities: number of prospects in progress, probability of conversion at each stage, actions already taken and to be taken in the future, status of relationships with current customers, etc. Above all, it is a sales efficiency tool for the company. Above all, it's asales efficiency tool for the company.

How a sales pipeline works

This representation can be multiple. Most often, the sales pipeline is represented by a horizontal bar divided into several boxes, each representing a different stage in a prospect's buying journey. Here, the way it works is simple: you read it as if you were following an arrow, with prospects moving from left to right as they progress through the sales process. For example: a contact who responds to a cold email is immediately qualified and moves on to phase 2.

The information needed to build each stage of the sales pipeline generally comes from CRM software, which is a veritable reservoir of information. It also comes from feedback from sales staff, who enter their usual processes and actions into a sales pipeline tool.

The pipeline can also take the form of a sales funnel, due to a significant loss of prospects at each stage and a steadily declining conversion rate. However, as we shall see below, this representation is not always faithful to reality.

The benefits of a commercial pipe

We've already talked a lot about this tool. But why set up a sales pipeline in your company? This tool enables the sales force to...

• better visibility of the entire sales process;
• track the progress of prospects at each stage of the sales tunnel, visualizing exactly where they are and what action needs to be taken to move them forward;
• assess the maturity of prospects according to the stages of the sales pipeline, and prioritize the most relevant opportunities;
• identify potential bottlenecks and frictions, so that corrective measures can be taken (in particular by analyzing the conversion rate at each stage to determine where losses are occurring);
• seize as many opportunities as possible, to improve sales prospecting results ;
• divide the sales process into a multitude of tasks that are easier to understand and optimize, thus helping to achieve objectives;
• better understand prospects' buying path;
• build loyalty among existing customers through effective customer relationship management.

Sales pipeline VS sales forecast VS sales funnel

At this stage, you may be feeling confused. What about sales forecasts? And isn't the famous "sales funnel" the same thing as a pipeline? In reality, there are important differences between these concepts.

• While the sales pipeline focuses on opportunities managed by the sales teams, regardless of the stage and maturity of the prospects, the sales forecast is a long-term projection with an informative value. The aim of this analysis is to estimate the number of potential transactions and theoretical sales that the sales team will be able to achieve over a certain period. The team can refer to it to visualize its objectives and evaluate the path to follow to reach them.
• As for the funnel, it's a kind of sales pipeline, but the reverse isn't necessarily true. Indeed, the shape of the sales funnel implies a gradual decrease in the volume of prospects throughout the process, so that you always need X number of prospects on the left of the pipeline to obtain Y conversion rate on the far right. But this image is misleading. A better analogy would be to visualize the sales pipeline as a cylinder of always equal diameter: once the prospects have been captured, almost all of them can be converted into customers. Selection therefore takes place upstream of the sales pipeline, with a high internal conversion potential.

Creating a sales pipeline: how does it work?

Now you know what a sales hose is and why it's useful. The next question, of course, is how to set it up. What are the main steps involved in creating an effective sales pipeline?

1. Know your customers' buying path inside out

This is the basis. Since the sales pipeline takes place in stages, and since these stages are directly linked to the prospect's buying journey, it's essential to know the latter well in order to build the latter. As a reminder, the sales cycle generally takes the following form:

• The expression of a problem to be solved (awareness).
• Examination of market solutions and comparison of offers (consideration).
• Decision-making (conversion).

Of course, it's up to you to refine this generic schema according to the realities encountered by your sales team.

2. Identify the different stages of the sales pipeline

Each sales tube is unique, as its construction is adapted to the specific stages of the sales process in each company. But there are about five or six key stages:

• Contact: the prospect makes contact with the company (phone call, filling in a form on the website, downloading content, etc.).
• Making an appointment: the prospect agrees to hear a salesperson's arguments and learn more about the proposed solution.
• After the meeting: the prospect enters the reflection phase, having been fully informed of the steps to follow. They have all the information they need to compare offers.
• The proposed solution: the prospect expresses interest in the product, service or solution.
• Sending an offer: the prospect studies the offer and sends it back to the decision-makers.
• Closing: the prospect signs the contract or drops out.

Of course, the number and nature of these steps are likely to be different for your company. Building your sales pipeline therefore depends very much on your CRM and the feedback you receive from your sales force.

3. Determine the ideal size for the commercial pipe

The size of a sales pipeline varies according to the length of the sales cycle. The number of stages required will be different for the sale of office supplies (short term), SaaS software (medium term) or real estate (long term). It's important to take this into account when creating a sales process pipeline.

Another key point is to evaluate the time spent by prospects at each stage of the sales pipeline. For example, moving from phase 4 to phase 5 can take two to three weeks, while closing takes just a few days. This data enables sales reps to identify the most relevant opportunities and sort prospects, eliminating those that fall outside the defined scope.

Create a process from scratch or take inspiration from an existing model?

There are two ways to create a sales pipeline: create a process from scratch, or adapt an existing one. In the first case, you rely on the information contained in your CRM software, and analyze the workflows of your best salespeople, to highlight their methods and the steps they take to manage opportunities. What steps are they taking? How many follow-up e-mails are sent, how many calls are made? How much time should be allowed between each stage of the pipeline?

In the second case, you start with a generic process and adapt it to the realities of your business. Here again, a glance at your CRM will help you visualize the steps involved in creating the pipeline. Numerous templates are available online: don't hesitate to draw inspiration from them!

What tools do you need to create a sales pipeline?

There's nothing simple about creating a sales pipeline. But the good news is that there are a number of tools you can use to make it happen. The most important of these (you guessed it) is CRM software, which gives you access to a wealth of information essential to creating a step-by-step sales pipeline.

Other solutions can help you in your task, such as a Deal View tool [en1] to track sales opportunities and identify areas for improvement.

How can you effectively manage your sales pipeline?

Now that your sales pipeline is in place, and after all the problems you've encountered, it's time to make sure it's running smoothly. What are the keys to effective sales pipeline management?

Ensure a steady flow of leads into your pipeline

Imagine that the number of transactions soared in the first quarter, then plummeted in the following quarter. What happened? Such a situation can arise if your sales teams focus on the opportunities in the pipeline, neglecting the necessary upstream prospecting. Finding prospects may not be the most glamorous aspect of a salesperson's job, but it's absolutely essential to success.

It's true: managing a sales pipeline means constantly injecting prospects into the funnel, so that there are always as many opportunities to seize. Remember, prospects are the fuel of an effective sales process!

Standardize lead progression stages

When it comes to sales piping, standardization of the steps to follow is an essential prerequisite. Your sales force must have a well-defined procedure. Communication channels, actions to be taken, deadlines to be met and even the frequency of mailings or reminders must all be standardized within the team. For example, X contacts must be established for each prospect, and a prospect must respond to an offer e-mail within three to four weeks, after which it will simply be put aside.

This standardization has the advantage of being reproducible: the pipeline's effectiveness is based on the relevance of the process and the actions to be taken, rather than on salespeople's specific personal qualities (which are difficult to copy). It is also a way for the team to disqualify certain prospects when updating the pipeline.

Regularly update your list of pipeline opportunities

Yes, regular updating is essential for the proper management of a commercial hose. As such, you need to perform several operations:

• Ensure that prospect and customer information is reliable. Is the contact's phone number still valid? Have you been dealing with the same people since the beginning of the process? Does the e-mail you wrote still work?
• Identify the prospects you want to eliminate. It may sound a bit harsh, but some prospects aren't on your list of opportunities. If you notice that a step is getting longer than usual, or that a contact is stubbornly refusing to respond to your reminders, it may be time to drop it, so that you can concentrate on the really relevant opportunities (except, of course, when the probability of closure is very high). Take the opportunity to send a business-breaking e-mail: if the recipient turns a deaf ear, you'll know where you stand.
• Keep your sales pipeline flexible. Although the stages of the process are fairly fixed, realism must prevail. In some cases, it may be necessary to put opportunities back into the pipeline (for example, if your initial contacts have changed and you need to resume negotiations at an early stage), or on the contrary to extend the time allowed for a conversion at a key stage (because the customer's internal organization dictates a slower pace). Be flexible!
• Identify stalled opportunities. Silent prospects, blocked transactions, stagnant exchanges... These situations tend to clog the sales pipeline and create confusion. Take advantage of this update to assess the likelihood of each opportunity succeeding or failing, and determine whether it's best to remove it.

Evaluate the performance of your sales pipeline

Like all workflows, the sales process needs to be regularly evaluated to ensure its effectiveness. This is done using the right KPIs: number of opportunities in the pipeline, average deal value, total value represented by all qualified leads at time T, average time spent in the pipeline, conversion rate for each stage, etc.

With these elements in hand, you can identify areas for improvement in the sales pipeline and implement corrective actions to optimize the process.

Examples of commercial pipelines

Let's finish with two examples of sales pipelines, each corresponding to a specific business sector.

Example of a sales pipeline for a SaaS software publisher

1. First contact (0%).
2. Qualification of prospects (10%).
3. First appointment with software demonstration (30%).
4. Free trial version (50%).
5. Price proposal and negotiation (80%).
6. Closing (100%).

Sample commercial pipeline for a real estate agency

1. First contact (0%).
2. Presentation of the offer (20%).
3. Appointment for the first estimate (50%).
4. Negotiation of commission (70%).
5. Second appointment and signature of mandate (100%).

The sales pipeline is far from just a buzzword with a short shelf life. Behind this technical term lies a powerful strategic tool that sales teams use to track prospects' progress through the sales cycle, identify the most interesting opportunities and increase their chances of success. It's an essential tool for sales effectiveness.

‍