Definition
A sales pipeline is a visual representation of a prospect’s journey from the first point of contact to a closed deal. It is organized into a sequence of stages that a salesperson must complete to move a deal forward. Unlike a sales funnel, which shows the declining number of leads as they move through the process, a pipeline focuses on the specific actions and stages of an active deal, making it a critical tool for managing, tracking, and forecasting revenue.
Examples of Pipeline Stages
A typical B2B sales pipeline includes several distinct stages:
- Lead Generation: New potential customers (MQLs, outbound prospects) enter the top of the pipeline.
- Qualification: An SDR or BDR contacts the lead to verify their need, budget, and authority, converting them into an SQL.
- Meeting Scheduled: The qualified lead agrees to a discovery call or demo with an Account Executive.
- Proposal Sent: After understanding the prospect’s needs, the AE sends a formal proposal or quote.
- Negotiation: The final terms, pricing, and scope are discussed and agreed upon.
- Closed Won/Lost: The deal is finalized, either as a new customer or a lost opportunity.
Advantages/Benefits
- Accurate Revenue Forecasting: Allows sales leaders to predict future sales with high accuracy by analyzing the value and number of deals in each stage.
- Process Improvement: Clearly highlights bottlenecks and inefficiencies in the sales process (e.g., where deals most often stall).
- Improved Sales Performance: Gives salespeople a clear view of their deals, helping them prioritize tasks and focus on what’s needed to close.
- Resource Management: Helps managers allocate time and resources effectively, focusing the team’s efforts on the most winnable deals.
- Increased Accountability: Creates a transparent and measurable framework for tracking individual and team performance against sales quotas.
Related terms
- Sales Funnel
- CRM (Customer Relationship Management)
- Sales Cycle
- Sales Forecasting
- Conversion Rate
- Opportunity
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