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Sales Pipeline

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What is a Sales Pipeline?

A sales pipeline is a visual representation of the sales process, from the initial contact with a potential customer to the eventual conversion. It helps to identify the number and value of sales opportunities, as well as the amount of resources needed to convert those opportunities. 

Having a sales pipeline allows businesses to track and improve sales, and make more accurate forecasts. Additionally, it allows businesses to easily identify areas to improve and address customer needs more efficiently. 

How to Calculate Sales Pipeline

There are several ways to calculate pipeline value. Here’s an example that’s simple and straight forward:

Total Pipeline Value = 

(# of Opportunities x Average Deal Size x Close Rate) – (Total Lost Deals x Average Deal Size)

For example, if a company has 10 opportunities, an average deal size of $10,000, a close rate of 80%, but has already lost two of the 10 opportunities, the total pipeline value would be calculated as follows:

(10 x $10,000 x 0.80) – (2 x $10,000)

$80,000 – $20,000

Total Pipeline Value = $60,000 

B2B Sales Pipeline Stages

While there are common elements and stages in many sales pipelines, the specific structure and steps can vary depending on the industry, organization, product or service being sold, and the target market.

Here are seven common stages seen in most B2B sales pipelines:

  1. Prospecting: Identifying potential customers to target for a sale.
  2. Lead qualification: Determining which leads have the best potential for a successful sale.
  3. Demo or meeting: Presenting the product or service to the potential customer.
  4. Proposal: Preparing and submitting an offer to the customer.
  5. Negotiation: Discussing the terms of the sale to reach an agreement.
  6. Won opportunity: Securing the sale and confirming the agreement with the customer.
  7. Post-purchase: Following up with the customer after the sale to ensure satisfaction.

Sales Pipeline vs. Sales Funnel

The sales pipeline and sales funnel are two distinct but vital functions for driving better performance and customer experiences. 

  • A sales pipeline is a visual representation of a company’s sales process, from initial contact through the close of the sale. A sales funnel is a visual representation of the customer journey from awareness to purchase.
  • A sales pipeline typically includes multiple stages that represent different steps in the process, while a sales funnel typically has fewer stages and is used to track the progress of a customer through the sales process.
  • A sales pipeline is usually used to manage sales activities and track progress, while a sales funnel is used to measure and optimize the customer experience.

Best Practices to Manage a Sales Pipeline

Maintain a sales pipeline with these recommendations.

  • Establish clear goals and objectives for your sales pipeline.
  • Track pipeline progress regularly, and watch for stages where prospects either slow down or drop out — which could indicate opportunities to improve the customer experience.
  • Use customer relationship management (CRM) software to track and manage customer interactions.
  • Use content marketing and other digital marketing strategies to engage prospects.
  • Take advantage of automated sales processes such as email templates and follow-up sequences.

6sense Pipeline Forecast enables sales teams to accurately predict and measure pipeline performance, helping to inform strategy and improve execution of the sales process.

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