A potential customer just clicked your ad. In the next 24 hours, they’ll move through a journey that influences whether they become a loyal client or lost opportunity. Every interaction, from their first website visit to your sales team's follow-up email, is a crucial step in your sales pipeline.
By visually tracking leads as they progress through your company’s customer journey, the sales pipeline gives you a bird’s-eye view of where each deal stands at any given time. This lets you streamline workflows, better prioritize high-quality leads, and identify prospects that need attention to keep deals moving forward.
But how do you set up a sales pipeline that brings in more qualified leads and helps you hit revenue goals? Learn the basics of effective sales pipelines, how to optimize yours, and which tools can boost your win rate whether you’re prospecting new leads or pitching renewals.
Sales pipeline vs. sales funnel
A sales pipeline visually tracks potential customers as they move through the customer journey from initial contact to becoming a customer. It provides a crucial overview of the different stages in your sales process, helping you manage leads and close more deals.
Accurately tracking your sales process within a pipeline highlights bottlenecks and reveals high-value opportunities. Sales pipelines can also help you forecast sales revenue by tracking the number of qualified leads, win rate, average deal size, customer acquisition cost, and average sales cycle.
While a sales pipeline may sound similar to a sales funnel, these two tools provide different insights.
A sales pipeline visualizes the purchase process from a seller’s perspective. Each stage shows corresponding actions your sales team takes to move prospects forward.
A sales funnel depicts the purchase process from a buyer’s perspective. It shows how leads move through the stages of the buyer’s journey, from awareness to purchase.
Both a sales pipeline and a sales funnel provide clarity around how leads progress through your purchase process and areas where additional action is needed to reach your sales targets.
Why a healthy sales pipeline is critical
Building a sales pipeline is one thing, but keeping it healthy is another. Thoughtful sales pipeline management helps you improve your overall sales performance in multiple ways, including:
Optimizing the sales process: Pipelines help sales teams identify which stages or activities are most effective at moving deals forward. This optimizes sales strategies—including how to handle common sales objections.
Improving sales figures: Pipelines help sales professionals track opportunities and optimize their sales cadence, including when to reach out during each stage.
Forecasting revenue and growth: Your sales pipeline helps you accurately predict future sales and revenue, leading to data-informed financial decisions and goal-setting.
Identifying bottlenecks: The pipeline flags bottlenecks and helps teams prioritize the most promising opportunities. This accelerates your sales velocity and quickly moves deals to the next stage.
Sales leaders can use sales pipeline templates or visual representations to gauge whether their pipeline is healthy.
6 stages of a sales pipeline
Sales pipelines are usually depicted as a horizontal or vertical bar that’s divided into different stages of your buyer’s journey. These can vary by company and industry, but most sales pipelines include the following stages:
Prospecting: This stage involves lead generation or identifying new leads.
Qualifying: In the lead qualification stage, team members rank the likelihood of conversion using lead scoring.
Engaging: During engagement, your sales team focuses on outreach using emails and cold calls. Alternatively, you may gain an inbound sales lead when potential customers engage with content like whitepapers and reach out to your business.
Nurturing: This stage involves strengthening relationships with prospects through personalized communication and assets like product demo videos.
Negotiating: Negotiation involves sales reps sending a proposal, addressing remaining concerns, and finalizing terms that satisfy both buyers and sellers.
Closing: Once a lead becomes a customer, the deal is closed. Fostering relationships beyond a closed deal can earn your business word-of-mouth referrals and repeat customers.
Some businesses may add additional stages to the pipeline. For example, a SaaS sales pipeline might include a retention stage to encourage customers to renew their subscriptions. Choose sales pipeline stages that align with your company’s sales process and customer journey.
How to build a healthy sales pipeline
Follow these steps to build a successful sales pipeline that helps you hit revenue goals:
1. Define clear pipeline stages
Each stage of the sales pipeline includes unique sales process activities. The entire pipeline should cover all activities from initial contact to closing the deal—and even post-purchase retention, if applicable.
For example, a SaaS sales pipeline might include the following sales activities during each stage:
Prospecting
Goal: Fill the pipeline with a steady flow of potential leads.
Company research and building prospect lists
Cold calling and sending introductory emails
Managing inbound and outbound marketing campaigns
Qualifying
Goal: Qualifying leads based on the ideal customer profile (ICP).
Scoring leads and verifying that prospects fit the ICP
Calling prospects to assess fit and interest
Updating the CRM with qualified lead information
Engaging
Goal: Learn the prospect’s pain points and needs, then demonstrate how the product or service solves those challenges.
Conducting discovery calls to ask questions that help the sales rep understand the prospect’s needs and challenges
Creating and sharing personalized product demos
Nurturing
Goal: Present a personalized offer and get prospects to sign up for a trial or pilot.
Creating personalized proposals that detail the software’s specific solutions for the prospect’s pain points
Presenting pricing options and terms
Setting up free trials or pilot programs
Negotiating
Goal: Reach an agreement with the prospect on contract terms, pricing, and implementation details.
Addressing any remaining objections or hesitations
Discussing the contract terms and conditions
Offering proposal customizations or compromises to reach an agreement
Ensuring departments like legal and finance are included in the negotiations
Closing
Goal: Get a final sign-off, secure payment, and transition the account to customer success.
Finalizing, approving, and signing contracts
Coordinating implementation and scheduling a kick-off meeting
Transitioning the account to the customer success team
Retention
Goal: Successfully onboard new customers and strengthen relationships with existing customers.
Regularly checking in with new customers to ensure a smooth onboarding process
Addressing any issues that arise post-sale
Identifying upsell and cross-sell opportunities
Requesting customer testimonials and referrals
These unique activities focus on moving prospects through each pipeline stage until the deal is closed. Activities in the retention stage are also key for moving existing customers toward renewal and strengthening customer loyalty.
2. Generate and qualify leads
Fill your pipeline with quality leads using an ICP. The ICP describes your ideal existing and prospective customers, including both demographic and firmographic information, such as the following:
Company size
Industry
Job titles
Pain points
Your ICP helps you identify and prioritize your most promising leads and then personalize your communications with them.
Salesforce’s State of the Connected Consumer report found that 65% of customers expect brands to adapt to their changing needs and expectations. This means a personalized approach informed by your ICP is key to making memorable experiences and building customer loyalty.
3. Monitor sales pipeline metrics
Assigning metrics and KPIs to each stage helps you keep tabs on performance and identify ways to shorten your sales cycle. Here are some commonly measured metrics for each stage:
Prospecting
Number of marketing qualified leads (MQLs)
Lead-to-opportunity conversion rate
Qualifying
Number of sales qualified leads (SQLs)
SQL-to-opportunity conversion rate
Engaging and nurturing
Number of meetings scheduled
Lead response time
Engagement rate
Negotiating
Number of demos scheduled
Proposal win rate
Closing
Win rate
Conversion rate by pipeline stage
Additionally, monitor metrics that indicate overall pipeline health, including average deal size, sales cycle length, sales pipeline velocity, and pipeline coverage.
4. Elevate lead nurturing
Customer experience (CX) plays a huge role in brand loyalty. For instance, Mailchimp found that 97% of customers become repeat buyers if a brand makes shopping quick and easy.
A foundation for great customer experiences is empathy. Show appreciation for your customers and use active listening techniques to gather feedback. Customer service tools like Loom also foster deeper customer connections by humanizing conversations and showing a support rep’s face alongside their voice.
It’s a good idea to meet your customers where they are. Almost three-quarters (73%) of consumers engage with multiple channels during their shopping experiences, and even B2B shoppers use 10 or more channels when deciding what to buy.
Use customer data to determine which channels to focus on during each pipeline stage. For example, your customers may prefer to chat on the phone during sales conversations, but they may reach out on social media if they need customer support.
Of course, an omnichannel approach is only as good as the service you provide on each channel. A majority (87%) of customers want a quick response when they reach out to a company. Use tools like AI chatbots and social media listening software to quickly engage with customers.
5. Use sales tools
The right set of sales tools can improve pipeline efficiency and boost your win rate. In a recent HubSpot survey, companies reported that the following types of sales tools generated the highest ROI:
Sales management tools (27%)
Sales engagement and productivity tools (26%)
Sales prospecting tools (25%)
Sales CRM software, in particular, makes a big impact by tracking and managing customer interactions, profiles, and opportunities. Sales prospecting tools are also helpful for identifying decision-makers and their demographic information.
Video software for sales can also earn you more deals. Wyzowl found that 84% of consumers decided to buy after watching a branded video. Tailor your video outreach across multiple channels: embed a Loom video in a cold email, share an interactive product demo, and send new customers personalized video welcome messages.
How to review and improve your sales pipeline
Constant review and iteration are critical for improving your sales pipeline performance. To analyze pipeline health, look at your key metrics as well as these vital indicators:
Pipeline distribution and coverage
Ideally, your sales pipeline resembles a funnel—the number of deals at the top should be greater than the number of sales opportunities at the bottom. Bloated stages likely mean there’s a bottleneck preventing deals from moving forward. Sales coaching or tools can get deals flowing again.
On the other hand, if you’re lacking leads, your pipeline might resemble more of a straw than a funnel. Use your ICP to spot new leads so you can continue to hit sales goals.
Benchmark comparison
Use historical benchmarks to predict how your sales pipeline might perform and measure your current success against past performance. You can use internal metrics to establish benchmarks or use industry benchmarks to assess how well your pipeline is performing compared to similar businesses.
Segmenting benchmarks by product, team, and individual salespeople can help you spot trends. In turn, these trends can help you flag potential product positioning issues, sales rep training needs, and other opportunities for improvement.
Finally, benchmarks help you measure the impact of changes to your sales process, training, inbound and outbound campaigns, and other initiatives.
Lead sources and individual deal health
Pipeline hygiene keeps your forecasts accurate and your team working efficiently. Pinpoint individual deals that are stuck in your pipeline and decide whether they’re worth the additional effort to revitalize them.
Look for deals that flew through your sales cycle. Identify the lead source for these deals to understand where your highest-quality leads come from, then focus your efforts on these sources—and the methods your team used to close the sale.
Segment analysis
Along with analyzing your sales pipeline by stage and by deal, you should also break it down by product, region, and sales rep.
Doing this helps you spot areas for improvement and tailor them to a specific product, identify region-specific needs or objections, and provide your team with helpful sales enablement opportunities.
Sales activity
Check the number and quality of sales activities for each stage. This will help you spot training opportunities or process improvements. Analyzing sales activity also tells you whether pipeline slowdowns are due to your team’s inaction or external forces like seasonality.
Boost team performance: Loom sales training videos are a budget-friendly way to teach sales tactics and provide direct feedback.
5 types of sales tools for effectively managing your sales pipeline
These five types of sales tools help you improve your sales team’s efficiency and performance within each stage of your pipeline.
1. AI and automation tools
Automation frees up time for your salespeople to build customer relationships. HubSpot found that 71% of salespeople believe AI and automation tools make prospecting easier.
AI also makes personalization at scale easier. For example, Loom AI lets you insert customer name, title, and company variables into your video titles. This personalizes your video messaging for each lead—you don’t need to rerecord a new message for each customer.
Popular AI and automation sales tools: Zapier, Make, Loom, Clay, Lavender, Regie AI, Drift (now part of Salesloft)
2. Prospecting tools
Prospecting tools assist with engaging prospects and provide you with vital data to inform future conversations. They can also improve your pipeline visibility by allowing you to segment your leads and track prospects through each pipeline stage.
These tools often include automations for repetitive tasks like data entry, and they can also help you quickly identify potential customers. This frees up your sales rep’s time to focus more on engaging new prospects rather than manually searching for leads.
Popular prospecting tools: Apollo, Mixmax, LinkedIn Sales Navigator, Crunchbase, Leadfeeder
3. CRM software
A CRM organizes your customer profiles, contact information, and conversation records so you can use this data to personalize future messaging and offers.
Popular CRM software: Vtiger, HubSpot, Zoho CRM, Freshsales, Salesmate, Pipedrive
4. Sales engagement platforms
Sales engagement platforms use data from your CRM to create personalized outreach messaging, sometimes with the help of AI and machine learning.
Popular sales engagement tools: Outplay, Upscale, Mailshake, Klenty, Revenue.io
5. Sales analytics tools
Data analysis tools provide helpful pipeline health insights that enable you to make strategic decisions and create more accurate sales forecasts.
Popular sales analytics tools: HubSpot Sales Hub, Salesforce Sales Cloud, Gong, Clari, Revenue Grid
Streamline your sales pipeline with Loom
Your sales pipeline plays a significant role in the success of your sales team. When matched with your sales cycle, activities, and customer journey, your pipeline provides accurate performance insights that enable you to achieve your sales goals.
Your sales pipeline should include multiple opportunities to delight prospects and current customers. This strengthens relationships and boosts your chances for new leads to convert.
Loom’s screen recording software is an easy and highly effective way to send personalized communication throughout your sales pipeline stages, from video prospecting to explainer videos. Discover how Loom can enhance and streamline your sales pipeline today.
