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Sales pipeline management: The in-depth guide

Sales Pipeline Management
What is sales pipeline management?
Building a sales pipeline
How to map and maintain your sales pipeline
Why and how to optimize your sales pipeline
Forecasting and boosting business with your sales pipeline
Tools that can power up your pipeline
Key takeaways

The sales pipeline is your company’s foundation. Its performance has a part in dictating how the company performs.

Pipeline management is critical for winning more deals and ensuring every sales opportunity is healthy.

With the right tools and know-how, you can reduce the time you spend managing activities, reminders and follow-ups to focus on what you do best: selling.

In this in-depth guide, you’ll learn how to master pipeline management so you can power up your process, forecast revenue and boost sales performance.

What is sales pipeline management?

Here is a basic definition of sales pipeline management: overseeing and directing the opportunities in your sales pipeline.

But managing pipelines involves so much more than that.

Because it focuses on how you sell to potential customers, mapping out your methods step-by-step, you can use pipeline management to both analyze and supercharge your sales process.

Every opportunity in your pipeline occupies a designated stage within the sales cycle.

If you manage your pipeline successfully, you’ll be able to track and evaluate the activities associated with each of those stages in a meaningful way, including activities like:

  • Cold calling and cold emailing new leads

  • Setting appointments and meeting with new prospects

  • Sending lead nurturing offers (e.g., discounts and tutorials)

  • Generating effective sales proposals

A well-managed pipeline will provide you with clear insight into how well your sales process is working and where impactful improvements can be made.

Characteristics of sales pipeline management

To fully answer the question of what is pipeline management, we need to examine what it is about the pipeline management process that allows salespeople to:

  • Identify and do away with bottlenecks and weak points in their sales cycle

  • Better understand why some sales deals fail while others succeed

  • Spot and prepare for potential sales slumps and growth

All these accomplishments and more are made possible by six key characteristics that drive pipeline management.

  1. Metrics: A wide variety of pipeline metrics can be used to analyze your sales process (e.g., calls made or closed deals)

  2. Maintenance: Keeping your pipeline clean improves efficiency functions

  3. Optimization: A well-managed pipeline enables you to evaluate and then optimize your process at each stage of the sales cycle

  4. Sales team management: Knowing how and when to help your team make the most of their sales process is an integral part of pipeline management for sales leaders

  5. Sales forecasting: Proper pipeline management makes it possible to both forecast and increase your sales revenue

  6. Tool integration: Best practices include taking advantage of pipeline management software and integrations specifically designed to coax the best performance from your sales pipeline

We’ll walk you through these pipeline management principles in more detail as we work through this guide.

Free templates to track sales

Before spending a cent on CRM tools, try out this 100% free and effective sales tracking template.

Building a sales pipeline

Before you can benefit from the pipeline management process, you need a pipeline that’s built to perform.

No sales professional wants to see a potential deal slip through the cracks. Each stage of the pipeline should be built with the intention of making it easy to:

  • Visually manage the various events that make up your sales cycle

  • See where your potential buyers are at all times on their journey from cold lead to customer

  • Access valuable data (like conversion rates, for example) that demonstrate the success of your selling activities at each stage of the sales process

Bear in mind that there is no one-size-fits-all sales pipeline structure. The different stages you include will very much depend on your business and the activities you use to generate leads and close deals.

However, there are half a dozen fundamental stages that frequently pop up in sales pipelines. You can customize these six sales steps to meet the needs of your organization.

  1. Prospecting

  2. Qualifying

  3. Contacting

  4. Building relationships

  5. Closing

  6. Following up with cold leads

The best way to determine when you should be pushing a deal through your pipeline is by establishing which activities need to be completed, or conditions need to be met, at each stage of your sales cycle.

Four steps to creating your sales pipeline

Now you know how your pipeline should perform, bring in your team to build it.

Arm yourselves with a detailed list of prospects, a breakdown of the activities in your sales process and your revenue targets before following the four steps below:

  1. Set up potential buyers. Use a dedicated CRM tool to set up and categorize your prospects so you can manage pipeline interactions with them

  2. Set up sales stages. Lay out the activities in your sales process as distinct stages and allocate each prospect to one of them

  3. Review your sales cycle. Tweak your sales stages to accommodate any activities you find yourself engaging in repeatedly

  4. Update your sales process. Keep your sales process up to date by moving deals through your pipeline as they evolve

Using a CRM tool like Pipedrive will make it easier to map your pipeline to your sales process, and then manage them both. You’ll also be able to set up multiple pipelines should you need to manage more than one sales project. If you’re not ready to invest in a CRM yet, you can use a spreadsheet tool to create yoursales pipeline template.

How to map and maintain your sales pipeline

Now that it’s built, there’s a lot more to maintaining your sales pipeline than simply entering details about your daily activities (though that’s important, too).

Here are the four most important actions you’ll need to take to keep your pipeline functioning smoothly:

  1. Make use of key pipeline metrics

  2. Monitor and fix unhealthy sales measurements

  3. Update sales stages as needed

  4. Help your team manage their individual pipelines

Let’s see how these four activities form the cornerstones of a solid pipeline maintenance plan.

1. Using sales pipeline metrics

Using key sales metrics, like the ones listed below, will help you keep an eye on how your pipeline is performing. Ideally, you should generate figures for your process as a whole and for each separate sales stage.

  • Number of deals. Knowing how many qualified opportunities are in your pipeline at any time, and where they are, enables you to determine the health of your sales process

  • Value of deals. Adding up the total value of all the deals in your pipeline gives you insight into your potential revenue and whether you’re on track to meet your sales quotas

  • Deal size. Dividing the total value of your deals by the number of deals in your pipeline reveals the average size of your sales contracts. From there, you can figure out approximately how many deals you need to meet your sales revenue targets

  • Deal close rate. Knowing the average percentage of active deals your sales team closes will help you identify training opportunities and estimate monthly, quarterly and annual income

  • Sales velocity. Your sales velocity is how long it takes, on average, to turn a qualified lead into a customer. Knowing how long a deal usually lives in your pipeline before it’s won highlights where sales process improvements can be made

Because every sales professional’s pipeline changes on a regular basis, metrics like these serve as invaluable benchmarks for monitoring current results and predicting future sales trends at any given time.

2. Dealing with unhealthy measurements

Using a dedicated CRM tool will give you access to built-in sales pipeline metrics that you can, and should, review regularly.

Not only will conducting pipeline health spot-checks allow you to track performance measurements over time, but it will also help you to:

  • Recognize when a metric is off

  • Take steps to correct or improve it

  • Evaluate the impact of changes or improvements you’ve made

One common sign of an unhealthy pipeline, for example, is having too many unresolved deals in play.

While there’s a clear benefit to generating as many qualified leads as possible, without an organized, efficient pipeline, many of those leads will stagnate—especially if you’re juggling so many deals that it’s not clear where you should prioritize your time.

When you can see where all your leads stand, you’ll be less likely to miss out on potential sales. The best way to keep your pipeline organized is by cleaning it with three simple steps:

  • Pinpoint lethargic leads. Consult your sales velocity metrics to identify leads that have spent more than the average amount of time in or at a specific stage of the pipeline

  • Decide on the best course of action. Use your best judgment to choose whether or not to remove leads who are sluggish decision-makers

  • Do a final follow-up. Before permanently removing a lead from your pipeline, get in touch by phone call or email to reevaluate their interest. Consider keeping those with potential and adding those without to a list for future outreach

Staying alert to unhealthy metrics will also help you expose and jumpstart deals that have been stuck at one stage of your pipeline for longer than usual.

3. Keeping your sales stages updated

When it comes to effective pipeline management, review your sales process regularly, as your efficiency and success can easily be hindered by bottlenecks or a lengthy and time-consuming cycle.

Figuring out which stages work best for you, and adding or removing them as necessary, will streamline your pipeline and ultimately help you convert more prospects to customers.

Tightening up an unwieldy sales process

A good rule of thumb to keep in mind when tidying up your sales process is that the longer your pipeline, the more opportunities there are for prospects to change their mind or opportunities to fall through the cracks.

Finding ways to keep your sales cycle as tight as possible without hounding potential buyers will keep more leads from going cold.

You could, for example:

  • Research and focus on sales channels that yield the best-fit leads and prospects

  • Review the quality and relevance of your initial sales offering or proposal

  • Shorten the time between follow-ups

While it’s important to keep your sales process as short as possible, make sure this isn’t the result of cutting out important steps along the way.

Fleshing out an incomplete sales process

Blockages and shortcomings in your pipeline can be the result of failing to include, or not adequately fleshing out, a crucial stage in your sales process.

Reviewing those areas where your deals tend to pile up or fizzle out will help you identify and build out important sales activities that may not be getting the time or attention they need.

An inefficient or unclear prospecting stage, for example, could cause your pipeline to shrink and lucrative sales opportunities to become far and few. Not including a defined follow-up process where it’s most needed, meanwhile, could mean losing the prospects you have.

4. Assisting your team with pipeline management

As a sales manager, it’s important to work with your team to maintain and manage your sales pipeline. Providing your reps with the right coaching and training, or recognizing when they need help, will empower them to manage their own sales cycles.

If your team doesn’t understand, for example, how quickly opportunities typically move through their pipelines, or how much time their leads tend to spend at each stage, they won’t make the best use of their time and resources.

Fortunately, working with the right CRM tool will make it easy for your sales team to see:

  • How many open deals they have and which stage they’re at

  • Which deals most need their attention

  • Whether or not they’re likely to reach their sales targets

Encouraging your sales reps to keep their pipelines clean and teaching them how to get the most from their metrics will give them more control over their quotas and help them stay motivated.

Why and how to optimize your sales pipeline

Why should you optimize your sales pipeline?

In a nutshell, elevating pipeline performance makes it easier for your business to reach sales quota, growth and profitability goals as quickly and consistently as possible.

Before you can optimize your existing sales pipeline, however, you’ll need to make sure the data it’s producing is accurate and up-to-date. You can achieve that by keeping contact information current and by logging detailed notes about each lead as they pass through your pipeline. This will also help other departments in your business who rely on the data in your CMS.

You should stay on top of active deals, meanwhile, by:

  • Moving them back to previous sales stages when necessary—like when the contact you’ve been working with leaves their company, for example

  • Updating your estimated close dates as each deal moves forward

  • Reviewing and adjusting deal values to ensure they remain as accurate as possible

Accurate data makes it easier for you to see how you can improve the results of your sales pipeline metrics by getting deals to the next stage more efficiently, for example, or by increasing your deal value or volume.

Optimizing sales results

Because they enable you to match up the sales activities you perform against the progress of the opportunities in your pipeline, understanding how to apply key metrics will help you optimize your pipeline’s sales results.

Here’s a simple example.

Let’s say your pipeline metrics reveal that you usually have 30 deals in the first stage of your pipeline. If you currently have only 25 deals, then you know you need to find five new opportunities to achieve your standard sales target for the period.

Pipeline velocity, meanwhile, is an especially significant metric when your goal is to increase win rates.

The formula for calculating sales velocity in dollars looks like this:

Number of Deals x Average Deal Size (Value) x Deal Close Rate
Average Length of Sales Cycle in Days

And here’s how that formula translates into daily velocity.

Let’s say you currently have 30 deals in your pipeline with an average deal size of $5000. Your deal close rate is 50% and it usually takes you 75 days to turn a qualified lead into a paying customer.

30 x $5000 = $150,000
$150,000 x 50% = $75,000
$75,000 ÷ 75 days = $1000

That means that on any given day you have $1000 worth of sales speeding through your pipeline.

If you take a closer look at the formula above you’ll see there are two main ways to ratchet up that $1000: you can increase the number, size or close rate of your deals; or you can decrease the time it takes to convert them into sales.

To achieve those objectives, you might consider:

  • Improving your prospecting and lead qualification process

  • Taking advantage of more opportunities to cross-sell or upsell

  • Investing in sales training to help sales reps better qualify their leads

A good CRM system will also show you your conversion rate at each sales stage, so you can see where prospects are falling out of your pipeline and take steps to lose fewer of them.

Designing the optimal pipeline for your business

So, how do you know what’s best for your business when it comes to optimizing your current sales pipeline?

Any time you set out to improve a business process, you should start by mapping out your existing workflow using dedicated software. From there, you can tweak your sales process until it meets a few foundational criteria.

Your sales pipeline stages should:

  • Be standardized and repeatable enough that sales outcomes are as regular and predictable as possible

  • Encourage routine and efficiency in your sales department

  • Ensure quality and accountability with the help of built-in checkpoints, metrics and measuring tools

While your customers are unique from one another to a certain extent, your target market probably shares a common set of buying motivations.

A standardized sales process takes the guesswork out of selling and prevents you from inadvertently rushing prospects from one stage to the next. It can also yield higher win rates and tighter cycles by making your sales easier to analyze.

With a formal sales process in place, you can speed up the onboarding of new team members and get a better handle on how effective their selling techniques and activities are.

Conducting a sales pipeline review

Once you’ve got the optimal structure for your sales pipeline nailed down, you can use it to help your team consistently produce their best results by carrying out regular reviews.

Pipeline reviews help every deal move through your sales process more efficiently and provide a golden opportunity to examine new opportunities at just the right time.

For example, rather than waiting until late in the sales cycle to jump in and help your reps close difficult deals, you can make a bigger impact by helping your team strategize during the earlier stages.

Sales pipeline reviews typically require setting aside an hour or so daily, weekly or monthly to discuss your team’s newest or most significant deals.

Your CRM tool can help you with this by making it easy to:

  • Sort leads by deal date or size

  • Examine sales activities for each deal

  • Identify and focus efforts on the highest value or most sales-ready opportunities

Taking steps to both standardize your sales pipeline and review what’s flowing through it on a regular basis will improve your sales team’s results.

Now that you know how to optimize your sales pipeline, let’s find out how you can use it to improve business performance.

Forecasting and boosting business with your sales pipeline

Forecasting and boosting business work hand-in-hand: a well-managed pipeline produces more accurate sales forecasts, which make it easier, in turn, to meet more sales targets.

The main aim of pipeline management is to maintain a healthy sales process that produces optimal results and accurate data. The goal of forecasting, on the other hand, is to use your data to predict sales results over time.

Creating monthly, quarterly and annual sales forecasts will give you the information you need to measure and direct your team’s selling success. It will also help you make smarter business decisions that will help boost your growth.

Why forecast sales?

As a business owner or sales manager, you want to do more than keep your pipeline in tip-top condition. You want to be able to use it to forecast the size and number of deals that will close during a specific time period.

The cleaner and better maintained your pipeline is, the truer an estimate it will give you in terms of what your sales revenue will be in the future. You can then use that financial data to better manage your sales inventory, expenses and cash flow.

Using your pipeline to forecast sales is an effective way to plan for both favorable and unfavorable sales periods.

If sales are increasing in the short term, for example, you might decide to:

  • Invest in more inventory

  • Hire new sales staff

  • Scale up your equipment, premises or infrastructure

If sales are headed for a slump, meanwhile, you might decide to:

  • Reduce unnecessary overhead

  • Delay taking on a new business loan

  • Redirect your marketing team’s efforts or revisit cold sales leads

Forecasting is more than a valuable business management tool. Tracking performance over time can also show you how your input as a sales manager impacts results.

Here’s an example.

Let’s say, thanks to the forecasting made possible by your CRM metrics, you discover there are a total of 50 deals worth $250,000 expected to close during the upcoming quarter. Your sales target, however, is $300,000.

Armed with that knowledge, you can take immediate action to nurture your team’s sales revenue growth by:

  • Using pipeline activity to identify possible reasons for the shortfall. Did too many reps fall behind on their follow-up tasks, for example?

  • Applying a specific coaching strategy to address the deficit. Do you need to work with your team to find prospects that have gone silent or deals that have lingered longer than usual at a particular sales stage?

  • Powering up your motivational tactics. Encouraging your team to stay focused and complete deals that are on track to close is especially important during a sales shortfall.

Revisiting your pipeline metrics after the fact will show you how successful your coaching efforts were so you can tweak and reapply them in the future.

Tools that can power up your pipeline

While the ideal sales process for your business may change over time, the easiest way by far to power up your sales pipeline is with dedicated CRM software.

Pipedrive, for example, is a sales pipeline management tool that’s specifically designed to help business owners and sales teams visually organize their work so they can get confident about their results.

Pipedrive’s features and integrations don’t just improve pipelines, they help sales teams manage them better.

Here’s how:

  • Direct your critical sales activities all in one place. Closing more deals is only possible when you have the means to track, record and follow up on the actions you and your prospects take over the course of the sales cycle. Pipedrive lets you link contacts to deals, integrate email correspondence and automate repetitive administrative sales tasks and follow-up reminders.

  • View your outcomes more clearly. The better you can see the results of your prospecting, qualifying and follow-up efforts at every stage of your pipeline, the more leads you’re likely to convert. Pipedrive lets you track the progress of sales opportunities and see your sales data in real time.

  • Use integrations to boost the power of your pipeline. Taking advantage of innovative apps designed to boost the sales process can save time, reduce overhead and eliminate frustration.

Pipedrive’s integrated services:

  • Offer easy, one-click installation

  • Are ideal for keeping remote teams running smoothly

  • Streamline the most common sales areas, including lead generation, email marketing and phone solutions

Pipedrive add-ons do more than optimize sales results, however. Gamifying integrations like Pointagram, for example, help you tap into your team’s full potential and keep them engaged.

Remember: while sales is predominantly about results, it’s important to stay focused on the process, not just the outcome.

Key takeaways

Managing, maintaining and optimizing your pipeline plays a pivotal role in:

  • Monitoring your activities and exploring your sales strategy options

  • Allocating and managing resources and training to close more deals

  • Reviewing your current performance and forecasting future results

It’s also clear that the right tools and technology help sales teams better qualify leads, close more deals and spend less time on manual tasks.

But to put all this knowledge to work, you need to get clear on the state of your existing sales process.

Are you having trouble staying on top of your commitments or keeping your sales opportunities flowing efficiently? Your pipeline may need a good cleaning.

Do you wish you had a better idea of how your sales team’s performing, and where their results might be improved? Using pipeline metrics in conjunction with sales forecasting will sharpen your perspective and clarify where you can jump in and help.

Perhaps your existing process is okay, but you’re looking for a way to supercharge your sales outcomes. Optimizing your pipeline by standardizing the stages in your sales cycle and conducting regular pipeline reviews may be the solution.

Wherever you currently stand—and whatever sales pipeline management best practices look like for your business—keeping your pipeline clean and organized, with the help of a customizable CRM tool, will make it easier to coax the best performance from your sales process.

Free templates to track sales

Before spending a cent on CRM tools, try out this 100% free and effective sales tracking template.

Driving business growth