This article explains what the main stages of a sales pipeline are to help you implement and efficiently manage your sales funnel.
While the unique needs of businesses such as plumbers, real estate agents, fashion retailers, and vegan food sellers might seem worlds apart, all of these companies have similar sales pipeline stages in their selling process. These companies will most likely have different sales processes and next best actions, but the stages a potential customers goes through when making a purchase with them remain broadly the same.
It’s key to define these sales pipeline stages very early on, and to have a robust sales process in place that enables any sales rep working for your company to know what to do to advance a prospect through the different stages to ultimately close the deal.
What are the main sales pipeline stages?
Here is how we define the main stages in any sales pipeline, no matter the size of company or industry it works in:
We’ll look at each of these stages in more detail below.
This first stage of the sales pipeline involves generating new leads and recording their contact details. These leads may be generated from marketing activities such as content marketing, email marketing, events (in person and online) or social media campaigns. They may also be generated by the sales team, including inbound inquiries, cold calling, and referrals. At this stage, it’s crucial that as much information on the lead as possible is recorded to enable easier follow up in the future. This includes demographic data such as name, address, and age, but also information on where the lead came from, and what kind of interactions they have had with your company already (if any).
At the Prospects stage, either the sales rep or marketing department makes contact with the prospect to get more information about what they are looking for. This could take the form of a quick call, but often it is an automated process. For example, maybe a customer downloaded an ebook from your website. You would then send them an automated email to find out what they are looking for – whether they were simply interested in the subject, or whether they are looking to buy a product like yours. If the prospect doesn’t respond first time, then you can send them another (automated) email in a few days to follow up, and then a final one before deciding to disqualify the lead. The information gained at this stage is crucial when qualifying a lead as it weeds out a lot of the people who have no interest in buying your product.
The qualification stage enables the sales team to prioritize leads based on how likely they are to lead to a sale, and to become a long-term, repeat customer. To accurately qualify a prospect, you need to know as much information about them as possible. This information will have been gathered during earlier stages in the sales pipeline. The object of this stage is to work out how much a customer fits with your target audience, to assess previous interactions with your company, to work out if they have the budget and need to make a purchase, and to take into account the channel that your lead came through. Ideally, you’ll already have an idea of how to best qualify leads based on data collected from previous sales (both successful and unsuccessful).
Not all leads will advance past this stage, as your sales team can’t focus on every prospect, but must instead only choose to prioritize the most qualified ones, and disqualify or de-prioritize (to possibly follow up in the future) the rest.
In this stage of the sales pipeline, the sales rep sets up a meeting with the prospect to discuss requirements in more detail. This stage will differ according to your product or service and sales model. It could take the form of a face-to-face meeting, or be a phone or video call, or even be conducted via live chat. During the Meeting stage, the salesperson explains the product or service in detail, the advantages of buying the specific product, and attempts to overcome any objections the prospect may have. The sales rep may have to schedule a number of meetings, especially if it’s a higher-value purchase, as well as work out exactly what the prospect wants to buy. This is also the best opportunity to try to cross sell and upsell your product, or to get them to sign up to a longer subscription.
At this fifth and final stage before the deal is closed, the prospect has already been fully qualified and is ready to make a purchase. This is when the sales rep finalizes exactly what the potential customer wants to buy, and works out a quote, which may include negotiating discounts to secure the sale. The next step is to prepare a proposal with the price quote, and to send this to the customer to sign. At this point, there is still a chance the prospect may drop out and not sign the paperwork, so the sales rep needs to have a process in place to follow up to try to close the sale if they don’t get a response. This stage could also involve custom steps such as arranging a free trial or sending out free samples of a product.
Once the sale has been closed, it’s good practice to follow up with the customer to check if they are happy or if there are any problems they need you to fix. This also gives you the opportunity to maintain contact with the customer so you can more quickly sell to them again in the future –– it’s much cheaper to retain existing customers than to always try to win new ones.
To help ensure that your sales team can move prospects through the pipeline efficiently enough to close deals, you need to manage your sales pipeline in an optimal way. The best way to do this is to implement sales pipeline management software so you can automate manual tasks, as well as more easily assess the status of all your deals, and the pipeline as a whole.
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