A sales pipeline gives salespeople a visual overview of where prospects are in the buying journey. However, a pipeline can only be fully effective when properly managed.
In one study, Vantage Point found that 56% of respondents rated their effectiveness at managing pipelines as poor or neutral. Considering that effective sales pipeline management leads to a 15% increase in revenue, according to Vantage Point’s study, it’s critical to get it right. There is a clear gap between understanding how beneficial a sales pipeline is and properly implementing one.
In this article, you’ll learn why you need a sales pipeline, how using a spreadsheet is a great sales pipeline template to start with (but will need to be replaced in the long run), how you can get organized with sales templates and exactly what goes into an efficient sales pipeline.
Table of contents
- What is a sales pipeline?
- Why do you need a sales pipeline?
- When to use a spreadsheet as a sales pipeline template
- When to use a CRM
- What goes into a sales pipeline?
Before we go any further, our team of sales experts has created a sales pipeline template to help you get started.
Download and try out this 100% free and effective sales pipeline template now, which you can refer back to it as you read through our guide.
This spreadsheet is tailor-made by our team of sales experts, but you can adjust and customize them in any way you see fit. Just download it, enter your contact and deal details, and watch all the work get done for you.
What is a sales pipeline?
A sales pipeline is an organized way to visualize and track leads and prospects as they move through the buying journey.
From lead generation to deal won, each stage in the pipeline is clearly defined and mapped out. This increased visibility helps to streamline your sales operation, ultimately decreasing churn and maximizing conversions.
Sales pipelines give you an easy-to-digest, real-time overview of your team's performance. For example, if one salesperson is significantly outperforming the rest of the team, you can evaluate that rep’s actions and implement those sales superstar tactics teamwide. The same is true for eradicating actions that aren’t yielding results.
Pipelines also help reps (who are often juggling multiple deals at once) stay organized. By glancing at their pipeline, they can easily see exactly where each deal is and what activity comes next.
Many people visualize their sales pipeline as a funnel, which leads to a common misconception that a sales pipeline and sales funnel are the same things. While both give you an overview of the sales process and its various stages, the approach and objective are different.
This is the key difference between a sales pipeline and a sales funnel: A sales pipeline shows the deal size and actions needed to move specific prospects through the buying journey; a sales funnel, on the other hand, shows the overall number of leads migrating through your process and where they drop off, giving you a conversion rate for each stage. In addition, a pipeline presents the salesperson’s perspective, while a funnel focuses on the buyer’s viewpoint.
Both are useful tools in understanding your sales process and how to improve it. However, the sales pipeline is ideal for getting a snapshot of where deals are in your process right now and what your reps’ next steps are.
Why you need a sales pipeline
If you sell anything, you already have a pipeline, whether you’re aware of it or not. Your team most likely follows a similar procedure every time they interact with leads and prospects.
Documenting your sales cycle and processes can help your reps organize new leads that are coming into the funnel and track specific actions. For example, reps can pinpoint the moment that a lead becomes qualified, or exactly how many times, and through what channels, they’ve contacted their prospects.
Detailing such sales activities helps to remove any guesswork and encourages a more structured process at all stages. A pipeline is a way to reflect these activities so that they become trackable. This motivates your reps to take relevant, measured actions, rather than broad, boundless steps.
By collating key information, salespeople can easily identify which leads need the most nurturing. This helps them to prioritize who to reach out to, when to schedule meetings, when to follow up and what steps they need to take to move the deal forward.
They can also more easily weed out hot leads from cold leads, reducing time wasted trying to sell to a potential customer who doesn’t fit the ideal customer persona.
Ultimately, having a well-managed, documented and accessible pipeline enables you to optimize and automate your process, improve your sales results and increase revenue.
When to use a spreadsheet as a sales pipeline template
With the abundance of sales tools available, it’s easy to become overwhelmed. While a dedicated CRM solution is ripe with benefits, sales managers who oversee a small team with a handful of deals may be able to, at first, manage their pipeline with a straightforward sales pipeline template.
If you've been tracking your pipeline on a piece of paper (or, even worse, in your head), moving over to a spreadsheet is a welcome upgrade. Spreadsheets are a great initial tool for handling all of your team’s deal data, including deal size, sales stage, profitability, weighted sales forecast, key prospect information and more.
Within your spreadsheet pipeline, it’s easy to see a high-level overview of all current deals and thus make data-driven decisions. This will help you not only track your team’s progress but streamline your own daily processes, freeing up valuable time and energy that you can put back into leading your team.
Effective sales management calls for equal focus on sales operations, strategy and analysis. Getting bogged down by slow processes in one area takes valuable attention away from the other two.
One of the most obvious benefits is that it completes calculations for you. This becomes crucial as you scale and especially if your team is handling multiple deals in various stages that all have different probabilities of closing.
At the same time, it also helps you keep a pulse on your sales process. In one fell swoop, you can track individual rep’s sales activities and progress, deal size and your monthly and quarterly sales forecast.
You can also tailor the sales pipeline template to your unique business requirements. It’s easy to add stages and modify formulas to suit your process and your prospects’ behaviors. Need to record additional information? Find that only 10% of people who accept a meeting close? A couple of clicks and you’ll be able to optimize your sales pipeline with uniquely relevant information that aligns with your specific needs and goals.
The best part? It’s free. Even if you don't have Excel, there are plenty of free alternatives out there (such as Open Office and Google Sheets) that make using a spreadsheet easy.
When to use a CRM
If you’re managing a team with a large number of deals to handle, then a spreadsheet has its limitations and you should consider using dedicated sales tracking software.
When you outgrow your template and need a more powerful way to manage your deals, check out CRM software for your sales tracking needs.
A CRM gives you access to advanced reporting and analytics, helps your team to collaborate and work collectively to close deals and ultimately grants you a deeper understanding of your team’s progress towards benchmarks and goals.
As your team grows, it’s crucial that leads and prospects are documented and easy to find in real-time. Salespeople must be able to quickly sort through individual and team-wide records to find the information they need. Cloud CRMs like Pipedrive help you ensure that data is input correctly and integrate with your email platform and calendar to automatically keep everything up-to-date as prospects move through the pipeline.
Even if you’re a startup or a small business, switching to a CRM from a spreadsheet can have huge benefits—even if it initially seems like a lot of work. AGT Engineering & Operations grew its revenue by 161% in the first two years after making the switch, while Mybanker was able to triple its sales team thanks to new business. Whatever your situation, moving to a CRM like Pipedrive can have huge benefits.
“Having a powerful CRM tool such as Pipedrive in our arsenal has been essential to the success of our sales team. With its easy-to-use and well-designed interface, it definitely keeps us organized and on track!”
Kristel Kruustük, Founder & Chief Testing Officer, Testlio
Additionally, CRMs can be accessed and updated from both desktop and mobile. This makes it possible for reps to input new information when on the go, further improving timeliness, accountability and collaboration.
What goes into a sales pipeline?
Your specific pipeline depends on your sales process, so it will vary between businesses. When you’re setting up your pipeline, you’ll want to document the steps your team goes through for each sale.
Hitting annual targets or closing a big deal can seem overwhelming, but breaking down the individual steps your reps take on a daily basis helps you create a roadmap. Clear-cut, step-by-step guides help your reps more easily visualize and achieve their goals. Plus, it will improve your sales pipeline management processes, as you can monitor tangible steps to evaluate your team’s individual and overall performance.
Pay special attention to the key steps with the biggest impact. Don’t worry too much about creating the perfect pipeline for your first iteration. Your pipeline is a living document and will change over time as your process evolves.
At this stage, you should get input from the whole sales team; remember, they’ll be the ones using the pipeline and keeping it up-to-date. Their involvement will encourage them to be more invested in the project’s short- and long-term success.
While your pipeline may end up looking different, we've found there are several basic components that make up an effective sales pipeline. Here’s the information you’ll need.
The first two columns in the spreadsheet are for the Deal name and the Contact name. Don’t take these for granted.
If one of your reps has to take over for someone else, you don’t want to lose a deal because no-one knows who they should get in touch with. Who’s your point of contact? Are there multiple contacts? Have you confirmed you’re talking to the right person, or is there someone else at the company who’d be in a better position to deal with you?
Make sure your salespeople know to include every little detail, no matter how small it seems. This also doubles as an effective training strategy for prospecting and qualifying, as the best reps master the art of gathering detailed information early on so as not to waste efforts on non-ideal customers.
The sales stage helps you to easily identify where prospects are in the buying journey.
What stages will you need for your business? By now you’ve reviewed your sales process with your team (see above) and are acutely aware of the individual steps reps go through to close a deal.
Many of these are straightforward, such as booking a call or sending a proposal. Other steps may be more complex and need further clarification. For example, contacting a lead may involve multiple touchpoints across different platforms and qualifying a lead may require weighing several factors.
To avoid confusion, make sure all stages are clear and specific so any reps handling the deal know when to move it along in the pipeline. That might mean having to break a complex stage down further into more manageable steps. That said, avoid having so many steps that your team spends more time updating the pipeline than selling.
For our template, we’ve included these default stages.
- Idea: Potential prospects that would be an ideal fit for your product or service
- Contacted: Prospects that your reps have reached out to
- Proposal sent: The prospect has shown interest and been sent a proposal
- Terms negotiated: The terms of the contract have been negotiated
- Verbal yes: They’ve agreed to the proposal, now they just need to sign on the dotted line
You can modify these stages by opening up the ‘Instructions’ tab in the spreadsheet and changing the stage name. You can also add additional stages through the Name Manager. This makes each stage available through the relevant drop-down menu, guaranteeing that your team will consistently record the same stages.
How much is the deal worth? Hopefully, you’ll be able to put an exact figure on this. If you don’t know the exact deal size until the contract is signed, use your average deal size as a placeholder.
That said, make sure your salespeople know to update this figure if and when new information arises. It’s key to keep it up-to-date so that your forecasting is as accurate as possible.
In sales, a deal isn’t closed until the prospect has made the purchase. In the template, each sales stage is assigned a probability of closing. The further along a deal is in the sales process, the better the chance they’ll close.
For example, leads who’ve been contacted are given a 25% probability of closing, while those who have given a verbal yes have a 90% probability. The spreadsheet then auto-fills the probability depending on the stage.
Keep in mind that you will likely need to change the probabilities to reflect your business. For example, a low-ticket item is often more likely to close than a high-ticket enterprise solution.
This is a simple matter of changing the formula in the appropriate cell. For the most accurate results, base your formula on past data, rather than guesswork.
One of the advantages of a well-managed pipeline is the ability to forecast your future sales. Knowing how much revenue you can expect in a quarter enables you to make smart business decisions and focus your attention in the right places.
Rather than trying to guess, opportunity stage forecasting uses the pipeline details we’ve already filled in to predict your total revenue.
The forecast for your pipeline is automatically calculated, taking into consideration both the deal size and the probability that the deal will close. This helps you avoid being distracted by massive deals with a low chance of closing, and instead keeps your focus on the highest quality sales opportunities.
Expected close date
For your forecast to be useful, you also need to know when deals are likely to close. Unfortunately, this is notoriously difficult. Both reps and prospects tend to underestimate how long a deal will take to close. In addition, the more people involved in the purchasing decision, the more difficult it is to come up with an accurate date.
The best way to estimate the close date is to look at your previous deals and see how long they took to close. Even then, the date will almost certainly change as the deal progresses. Still, its important to keep a target date in mind, as this encourages your reps to keep the deal moving. It’s all too easy to lose track and let a ‘sure’ deal go neglected and forgotten.
This is relatively straightforward. Who’s managing the deal from your side? This may change as the sale progresses (i.e. transferring from an SDR to an account manager), so keep this up-to-date.
Tracking who’s handling each deal enables you to measure team performance and ensure deals are properly distributed.
You should always know what has to happen next. How can you get the prospect from their current stage to the next one? For example, a potential prospect in the ‘Idea’ stage would need to be contacted. A ‘Contacted’ prospect will likely need to be sent a follow-up message.
Like the sales stages themselves, the next steps need to be clearly defined, without any ambiguity. Anyone should be able to look at the designated next step and know exactly what is required to progress. These shouldn’t be complicated, but don’t be afraid to get specific. ‘Follow-up email by 10/06’ is a lot clearer than just saying you need to ‘Follow-up’.
Monitoring the planned next steps encourages your team to be proactive, rather than reactive to prospects.
Effectively managing your sales pipeline is a key step to improving your overall sales process and revenue growth. The best part is that it doesn’t have to be complicated.
A simple spreadsheet can give you everything you need to stay organized, identify areas for improvement and more efficiently manage your team.