Sales Pipeline Stages: How to Build the Ultimate Sales Process

Success in sales depends on a healthy sales pipeline.

Sales is a core business process that drives revenue and creates value for customers. That means it’s critically important for teams to have clear, effective sales pipeline stages that can be adapted easily in order to stay ahead of competitors and build rapport with prospects.

Without full visibility, teams can’t effectively organize prospects, qualify leads, or accurately track attribution. Inconsistent data and missing information delay follow-ups and approvals, giving competitors time to steal your sales. Manual processes create opportunities for errors and drag down response times, allowing leads to grow cold. Spreadsheets and email threads get complicated and unwieldy.

These are the kinds of obstacles sales teams struggle with every day. Overcoming them begins with defining and structuring the sales pipeline stages.

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In this article, we provide a blueprint for a sales cycle that focuses on seven common stages. We’ll identify the typical issues that arise in each stage of the sales process, and suggest how to resolve them. We’ll also highlight opportunities for sales automation for tasks and workflows in your process in order to reduce friction, speed up communication, and improve your conversion rates.

Companies with a defined sales process saw 18% higher revenue growth than those without.

Harvard Business Review

What is a sales pipeline?

Before we dig into each stage, let’s define what we mean by “sales pipeline.” If you’re already familiar with the term, feel free to skip below using the jump links above. Here’s a breakdown of what a sales pipeline is (and what it can do):

Sales pipelines are a way of organizing, tracking, and visualizing sales activity.
Sales pipelines demonstrate the progression of sales as they move through the various stages in your sales process.
New potential sales typically enter the pipeline as prospects and exit the pipeline as a sale closed (won/lost).
A healthy sales pipeline consists of every potential sale for your business at a given point in time.
Sales pipelines may lead to (or connect with) other business processes such as customer success or automated accounts receivable.

To put it simply: your sales pipeline is a visualization of the way your team organizes its sales process, manages leads, and follows potential sales from their status as prospects to customers.

44% of executives think their organization is ineffective at managing their sales pipeline.

Harvard Business Review

Building a sales pipeline: 7 stages

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Sales pipelines vary in their complexity and the number of phases they contain, depending on the business, the industry, the customer base, and the sales team workflow.

One of the most common pipeline structures includes seven stages: prospecting, lead qualification, sales presentations, proposals, negotiations, closing, and post-sale follow up.

Stage 1: Prospects

The first phase of your pipeline will contain potential future sales opportunities, typically referred to as “prospects.” These are people or businesses who may be interested in buying from you at some point. Prospects are found through research, or they may have contacted your company through an email sign up or form fill.

Stage 1 challenges: managing high volume & missing information

At this early stage in your sales process, the primary challenge will be managing the volume of information. In the sales pipeline — just as with a marketing funnel — you begin with a lot of potential sales and slowly winnow out the most valuable leads. To do this, you need complete and consistent information about each prospect: contact information, lead source, company size, and other details.

This information will determine if the prospect moves to the next phase of the pipeline, or if they should be set aside temporarily or permanently. If you have many prospects in your pipeline, it’s common for information to get messy and unmanageable.

Solutions: add structure using labels, forms, and rules

Accuracy and consistency of information are critical at this stage, simply because there is so much of it. Sales teams need to be able to sort through and identify the best prospects quickly, and be able to update contact information and other records as new information becomes available.

Adding structure to this phase of the pipeline can be as simple as using a tool to create rules and conditionals for your data. For example, a rule can prevent new prospects from entering the pipeline unless all form fields are completed.

Conditionals can automatically move the prospect into the next phase if certain criteria are met. Creating standardized forms and organizing them in a single portal can make it fast and easy for sales reps to capture and organize relevant information.

Using labels and filters to sort through a high volume of leads can help you focus on high priority prospects and assign them to your sales team.

Sales reps with an accurate sales pipeline are 56% more likely to make quota.

Harvard Business Review

Stage 2: Qualified leads

Prospects with the potential for sales conversion are typically referred to as “qualified leads.” These may be prospects that have been nurtured by one of your marketing campaigns, or they may be actively researching their buying options. One way or another, there is enough evidence to determine that this prospect is a good fit for the product or service you are selling. The lead qualification stage of your sales pipeline is all about preparation and calibration. How well you understand the lead at this phase will determine how well you connect with prospects in your sales pitch. Sales managers will want to see that all qualified leads are being followed up on quickly and effectively.

Stage 2 challenges: data gaps and inconsistent communication

Once prospects are vetted and become qualified leads, accurate information and timely follow-ups become critical. Sales reps managing leads at this stage are preparing their presentations or demos, and building relationships with their primary contacts.

Incomplete or missing information can make a big difference in how well your sales pitch resonates with the prospect.

Solution: automate and add insight

In order to maintain consistent, regular contact with prospects, automate email outreach when possible. Use standardized email templates to save time and control branding.

Applying rules and conditionals to data entry at this stage is also helpful: it ensures that all relevant information is present before the prospect moves into the next phase. Once all information is captured, low-code automation can move the prospect to the next phase and notify the sales manager that a presentation/demo needs to be scheduled.

It will also be helpful to make sure that sales managers have easy access to view all qualified leads. Tools that provide reports, dashboards, or kanban board views will make it easy to see the status of all leads in the pipeline. Using a shared inbox can also provide managers with insight into how leads are being managed and assigned.

Stage 3: Sales presentations

By this point you will have collected a lot of information about your prospect, and you’ve determined that your product/service might be a good fit for them. Now it’s time to take what you know about your prospect and create a presentation that helps them understand how your product can meet their needs. Most companies will have a standardized sales pitch or slide deck that can be customized for each particular presentation. The focus now becomes making sure you understand the prospect well enough to address their pain points and deliver a presentation that resonates with them.

Most companies will have a standardized sales pitch or slide deck that can be customized for each particular presentation. The focus now becomes making sure you understand the prospect well enough to address their pain points and deliver a presentation that resonates with them.

Stage 3 challenge: not capturing new data, timely follow-ups, manager visibility

The sales presentation can provide a gold mine of new information about a prospect. During the call, they may reveal new details about their current challenges or the process and tools they are using to address them. You may also learn the names of additional influencers or decision makers.

Incorporating this new information, adapting to it, and providing a timely follow-up are the keys to moving a prospect into the next phase: delivering a targeted proposal.

Solution: set rules, automate, use dashboards

Some sales process tools allow you to set rules that prevent the prospect from moving forward in the pipe until information is updated, revised, or reviewed. This simple step can help ensure that all relevant information is recorded before the proposal is created. For information that needs to be added to the prospect’s record, a structured form fill can help ensure that sales reps are asking the right questions.

Delivering a prompt or scheduled follow up after the presentation is vital to keeping your prospect’s attention on your product and increasing the chances they will close. Tools that provide email automations and notifications can make this process more consistent and help busy salespersons follow through at just the right time and frequency.

This stage of the sales cycle is a critical point for any lead, and sales managers will want to be aware of their status. Automated notifications and dashboards can help keep their attention on leads that are approaching or completing this phase.

Sales reps spend 36% of their time selling, the rest in other activities.

Harvard Business Review

Stage 4: Proposals

Now that you’ve demonstrated the product or service for your prospect, it’s time to show its value in concrete terms. A formal proposal should justify the customer’s investment by clearly illustrating the value your product will deliver for them. Details such as terms and conditions must be spelled out so that the proposal can be reviewed by the prospect’s legal and/or finance team. See the proposal as an opportunity to fully distinguish yourself from your competitors and show your commitment to the prospect’s success.

Stage 4 challenges: slow approval process, creating documents

Many companies require proposals to be reviewed by a sales manager in order to avoid mistakes that could cost the company money or put the sale at risk. Often, these approvals are manual processes that become bottlenecks and cause delays.

Solution: Set approval thresholds, automate document creation

Setting rules that determine approval thresholds can help determine which proposals require review and which can proceed without this additional step.

Sales managers can be automatically notified whenever a proposal is awaiting approval or they can generate a report or dashboard that organizes all items awaiting their attention.

Automation can also generate the proposal document and send it to the prospect once it has been approved.

Companies that mastered three pipeline practices saw 28% higher revenue growth: clearly defining their sales process, spending at least 3 hours a month on pipeline management, and training sales managers on pipeline management.

Harvard Business Review

Stage 5: Negotiation and handling objections

Once the proposal has been delivered, expect questions and requests for modifications. These may be negotiations on price, the scope of the work, or terms. Prospects may have proposals from your competitors that they will use as leverage on product, price, or terms

Stage 5 challenges: redlines, document revisions

Your prospect may return your proposal with questions or requested revisions (redlines). These may be based on the scope of the work, the price, or the terms and conditions.

Requests may come from the purchasing manager or someone on the legal team. Whatever the source of the requested revision, it likely means generating a new document and resending it for review.

Solution: Automated document creation, forms and portals

Document creation can be streamlined through automation, which generates a new document once information is updated. New versions of the document can be automatically sent to a manager for approval or the client for review.

In some cases, your prospect’s legal or finance teams may need additional information before the proposal can be finalized. Using a centralized, online portal and standardized forms can make it easy for them to request this information.

Automations can route those requests to the appropriate people on your team without any additional effort on your part. Integrations with tools such as DocuSign can also make the negotiation phase faster and easier.

Stage 6: Closing

Once your sale is closed (won!), your priority will be fulfilling your commitment and delivering exceptional service to the client. All required forms and other information should be settled and your finance team should be primed for invoicing when the time comes.

Stage 6 challenges: chasing signatures

Once all the details of the proposal have been ironed out, you will still need to get it signed by the responsible parties. Often this is easier said than done.

Solution: integrations, portals

The best strategy here is to make the signing process as easy as possible. Integrating your sales process with a document signing app, such as Docusign, can be a big help.

You may also want to use a centralized portal to make it easy for your prospect to see all the documents and related forms in a single location.

Stage 7: Post-sale & handoff

A closed sale is the beginning of a new relationship. Ideally, one that will lead to satisfied customers and additional business in the future, whether by expansion (upsell), extension (renewal), or referral.

Stage 7 challenges: transparency, information transfer

A big part of nurturing this relationship will fall to your customer success/service team. That means making sure they have access to the customer’s history and the ability to update their profile as new information becomes available.

Knowing how your customers’ needs evolve over time can make all the difference when it comes to customer experience, retention, and expansion.

Solution: centralizing information, integrations

Centralizing information and making it accessible to your customer success (CS) team is critical for maintaining a healthy relationship with your client. That means making sure everyone has access to — and is updating — the same data set.

Your customer success team may use a range of tools to assist your clients post-sale. Integrating these tools to create a single source or truth can reduce errors and ensure that everyone has access to the most current information.

One tool that can be helpful for sales teams who need to build a sales pipeline quickly is a sales process template. These customizable process templates can be easily modified using a drag and drop interface that doesn’t require the intervention of an IT team or a developer.

Sales pipeline management

Forty-four percent of executives think their organization is ineffective at managing their sales pipelines. That means almost half of companies surveyed aren’t satisfied with the degree of control or visibility they have, or with the optimization of their current process.

Sales pipeline management means bringing order to undefined processes, improving efficiency, and adding transparency. Pipeline management is for:

Sales professionals or managers who wants to improve or automate their current sales pipeline.

Anyone relying on spreadsheets to organize, track, and manage sales.

Businesses exploring ways to bring visibility and control to their sales process without investing in an expensive, custom-built tool.

Businesses needing future scalability and the flexibility to adapt their workflows and processes without IT intervention.

Easily build your sales pipeline with low-code software

It takes a lot of work to fill a sales pipeline.

Prospects have to be found, leads qualified, and information has to be gathered, organized, and prioritized. Relationships must be built and maintained, and a lot of back and forth communication has to take place.

But all of this work is for nothing if the sales process itself isn’t sound. Definition, consistency, and visibility allow sales managers to forecast and control their sales, while giving sales reps the structure they need to thrive.

A well-managed sales pipeline allows for optimizations such as automating repetitive tasks, standardizing documents, forms, and email templates, consolidating data, and integration with other apps.

Low-code software offers a middle way between the accessibility of spreadsheets and a custom built sales tool. No-code enables teams to create sales pipeline stages with enough structure to deliver consistency, and yet the flexibility to adapt to changes in your sales process, evolving customer needs, and your competitors.