Let’s keep selling through this.  Our commitment to you in these uncertain times →

Sales Pipeline Guide

Introduction / Chapter 2 of 7

7 essential sales pipeline stages and how to implement them

by Steli Efti, CEO

Last updated July 17, 2020


Have you ever had to deal with a blocked pipe at home?

It’s a frustrating situation, and it means that whatever was supposed to go through that pipe isn’t getting through easily. This can result in a huge mess in your home, and can cost you valuable time and money.

Unfortunately, the same thing can happen to your sales pipeline.

If that ‘pipe’ isn’t clear, it’ll be harder for prospects to travel through it and turn into customers. Without the right processes and stages in place, you and your team could be wasting valuable time and money using a sales pipeline that isn’t adapted to your unique needs.

That’s why we’re going to discuss:

  • 7 essential pipeline stages to follow
  • How to implement these stages into your sales process

By the end of this chapter, you’ll know exactly what stages to include in your sales pipeline to keep it running smoother than ever.

7 essential sales pipeline stages to follow

The stages in a sales pipeline are built around the actions that reps take to turn prospects into customers.

While these stages loosely follow your sales process and buyer journey, they are more focused on rep activity. That way, your whole sales team will have a clear view of how to move prospects towards the sale.

Here’s a quick infographic that dives into the seven essential pipeline stages:

Infographic showing the 7 essential pipeline stages

Of course, every business is different and will need to adapt these stages to its own needs and customers.

Let’s take a closer look at each of these stages and what they include.

1. Lead generation

For the most part, lead generation is a job that’s reserved for the marketing team. Does this mean you can forget about lead generation as part of your sales pipeline?

Heck no!

In fact, sales can do a lot to help generate new leads. That’s why this should be the first stage in your pipeline.

Here’s what your team should be doing at the lead generation stage:

  • Create clear customer profiles: Take a look at closed deals that have been mutually beneficial to your company and theirs: what common denominators do you see? By defining clear, specific customer profiles, your team will get one step ahead on lead generation.
  • Pro tip: This is a task that both sales and marketing should have a hand in.

  • Example of a customer profile
  • Join forces with marketing to create and promote relevant content: Yes, content marketing makes up a large part of the best lead generation tactics. However, this doesn’t mean you should just leave the marketing team to do it on their own. Schedule regular brainstorming sessions between both the marketing and sales teams, and you’ll be able to share valuable insights that will make your company’s content even more attractive to prospects.
  • Get better at asking for referrals: Sometimes we don’t ask because we’re shy. Sometimes we don’t ask because we think they’ll say no. And sometimes, we just forget. But when you learn referral sales tactics and put them into practice, the resulting leads are likely to be highly qualified.

2. Prospecting

Unlike lead generation which involves reaching out to many people at a time, prospecting is a more one-on-one approach to pull in prospects that may want to buy from your business.

At the prospecting stage, these are the actions you should be taking with your leads:

  • Build relationships at industry events: Have a lot of leads heading to an industry event? Make sure your sales team is there and visible. Whether you’re making the rounds and having meaningful conversations with people or speaking on a relevant topic, make sure you work these events to your advantage and leave a memorable impression on your prospects’ minds. (And if you're unable to attend industry events, you can still leverage them creatively!)
  • Share your knowledge as an expert consultant: In the prospecting stage, your leads still have very little trust in you or your business (if they even know who you are). So, don’t immediately sell to them. Instead, offer to share your knowledge. Be an industry expert, someone they can trust for good information. Set up a meeting for coffee, just 15 minutes to talk about strategies to reach a relevant goal. Then, your company will be on their radar.
  • Do some cold outreach: Ice, ice baby! But seriously, reaching out to prospects, whether through cold emails or cold calls, can (and will) work for your business if you do it right. Once you’ve created your customer profile as mentioned above, take to the internet and find companies that fit that profile. Then, reach out!

Swipe now, use later: Download this free resource to discover our secret cold email hacks, plus 14 proven email templates you can steal!

3. Qualification

By now, your pipeline should be full of people who are hungry to buy your product.

Or are they?

Up to 67% of lost sales are a direct result of improper qualifying. If you take an unqualified prospect through the sales process, you’re just wasting your time on a deal that will never close.

That’s why during the qualification stage, you’ll need to make sure that the prospects you’ve discovered are really a good fit for your business.

These are the things you should be doing during the qualification stage:

  • Use the BANT method: BANT stands for budget, authority, needs, and timeline. This method, developed originally by IBM, serves to establish the four most important characteristics of a qualified prospect. If your prospect has a big enough budget, the authority to make decisions, needs that are filled with your product, and the right timeline to purchase, then odds are this deal will close.
  • Pro tip: Find out how to set up your own BANT qualification method using Process Street and Close.

  • Ask the right questions to match prospects to your customer profiles: Above, you created clear customer profiles that define the people who are most likely to purchase your product and benefit from it. So, how do you find out whether your prospect fits that customer profile? Ask questions. Remember, this isn’t an interrogation: but by knowing what questions to ask and when, you’ll be better prepared to qualify this prospect. Download your list of 42 B2B qualifying questions to get started.
  • Gain a deeper understanding of who’s competing for their attention: It’s essential to find out what other options are currently on the table. When talking to your prospect, learn more about the other vendors they’ve worked with, what they liked or didn’t like about other solutions, and (if you can) find out who else they’re currently considering. This will help you determine whether or not this prospect is really qualified.

4. Contact

Now that you’ve narrowed down your prospects to the most highly qualified opportunities, you’re left with the people who are interested and may actually buy your product.

It’s time to get in there and really sell it.

This will require contact, whether that’s a phone call, a physical meeting, a product demo, or an email or text message.

Here are some important tips for the contact stage:

  • Make sure everyone has a clear understanding of the goal or purpose of this meeting: When setting up your meeting, start by making sure you know exactly who is going to be involved, including any relevant stakeholders and decision-makers. (If it's a complex sale involving a large number of stakeholders, account mapping might be necessary.) Then, make it very clear to everyone what the goal of this meeting is. That way, everyone will come into the meeting ready to get things done.
  • Infographic showing the 7 essential pipeline stages
  • Prepare a clear agenda ahead of time, and keep things rolling: While it’s fine to answer questions along the way, don’t let your meeting get hijacked by a Chatty Patty in the group. Set your meeting agenda, and keep it handy while you’re there. That way, things will continue to run smoothly, and you’ll accomplish what you came for. There are many ways to go about this, but a generally good framework is to ask these three questions before your meeting.
  • Have the right resources on hand: Case studies, webinars, data sets, and other relevant resources can help seal the deal at this point. Make sure you can back up each of your most powerful statements with clear, hard data. We've created a set of ready-to-use templates for resources every sales team should have. Download a free edition of your Sales Enablement Kit today.
  • End with clear next steps, and follow up promptly: Don’t leave the meeting without an exact plan of what’s to follow. With this in place, you can send a friendly follow-up email the next day with a brief meeting recap and a summary of the next steps you agreed on.

5. Proposal

If you get this part right, you’ll knock the ball out of the park and close the deal.

Proposals should generally include information such as:

  • A summary of your prospects’ key pain points
  • The solution you’re offering (with specs)
  • Clear pricing info
  • Timeline for implementation, training, etc.
  • Exact terms

To really nail your proposal, you can use the fantastic templates provided by companies like PandaDoc. For example, check out this sleek SaaS proposal template: SaaS proposal template

Don’t forget these essential guidelines for the proposal stage:

  • Personalize the proposal to their wants and needs: Inside your proposal, you have the opportunity to make your prospect feel special. Show off the fact that you personalized this to their needs by including details you gathered during the qualification and contact stages.
  • Be hyper-focused on customer benefits: This proposal isn’t about your product: it’s about your customer. Instead of listing features of your solution, dig down into the benefits. Whenever possible, include specific stats on the kind of benefits they’re going to get with your product. Don’t let them get bored for even a second: keep selling your product!
  • Include an FAQ: At this point, there are probably some common questions that arise. A back-and-forth discussion at this point could seriously slow down the sales process. So, include common questions in an FAQ section of your proposal. Problem solved!

6. Negotiation and close

Both sides have put all their cards on the table. A decision is about to be made: so let’s make it a yes!

Maybe you’ll need to answer some last few questions, respond to discount inquiries, or renegotiate some of the terms.

In the end, if you play your cards right, you’ll have closed a deal. And that’s worth a bit of celebration.

Here are some tips for the negotiation and close stage:

  • Be prepared to walk away from the deal: Define the point where you’ll walk away and then stick to it: that way, you won’t waste your time or theirs. And who knows: you might still get the deal even after you walk away (that’s exactly what happened to us, in fact).
  • Make signing the contract easy: Or in other words, make it digital. Digital signing is super easy for everyone involved, and helps you and your customers keep everything in its place. With a solution like PandaDoc that natively integrates with Close CRM, you can remove friction from the sales process and save your reps and prospects valuable time.
If I told our reps we’re going back to DocuSign, they’d probably be extremely unhappy with me. Gone are the days of our clunky, inefficient proposal and contract process. We love that we can count on the entire PandaDoc team to help us look our absolute best while increasing our bottom line.
Maggie Taylor Aherne
Director of Operations at KickFire

7. Retention

Just because you closed the deal, doesn’t mean your work is over. You need to retain that new customer into the long-term.

Here’s why it’s important: when you increase your retention rates by just 5%, you can boost your profits by as much as 95%.

That’s why customer retention is its own stage in the sales pipeline.

Here’s what you should be doing during the retention stage:

  • Help the customer onboard successfully: Whether through training materials, help docs, or just being available to answer their questions, make sure your customer is getting the best use out of your product with an effective onboarding process.
  • Schedule a time to check-in and see how things are going: After you close a deal, set a reminder in your CRM to follow up with the customer in a month and see how things are going. This helps show you care about them and keeps them engaged with your product.
  • Ask for feedback: Not only will this help the customer feel appreciated, but you’ll also get some fantastic insights on how to improve your product.

By implementing these seven typical sales pipeline stages, you’ll have a smoother process that helps turn leads into happy, long-term customers.

How to implement these stages into your sales process

Of course, there is no one-size-fits-all sales pipeline. We’ve just outlined the general stages that your sales pipeline should include: but to fully implement these stages, you’ll need to adapt them to your own particular sales process.

Let’s examine how to do this step-by-step:

Step 1: Define your process for lead generation and prospecting

Who brings in the leads at your company: Sales or marketing?

Obviously, both teams have their roles to play. But, how do those roles work in your business?

It’s time to get specific: have both the sales and marketing teams write down a brief list of the ways they generate or prospect for leads. Then, check the data: which of these methods is consistently delivering solid, healthy leads?

Finally, set a clear process for lead hand-offs between marketing and sales.

🚀 How this accelerates your process:

When both marketing and sales teams have a defined process for lead generation and prospecting, everyone knows what they’re supposed to be doing. With the steps for hand-offs clearly in place, your sales pipeline will always be full of valuable leads.

Step 2: Understand your qualification methods and needs

What research tools does your team use for qualification? What questions seem to hit home the most when on a discovery call? What are the most important aspects you need to learn about your prospects in order to qualify them correctly? Is the timeline more important than the budget? What are their priorities?

By defining clear characteristics you need to see in a prospect and analyzing your reps’ phone calls with prospects to see what works best at this stage, and you’ll be able to set clear processes for qualification.

🚀 How this accelerates your process:

By knowing exactly what qualities or characteristics your prospects must have to become customers, your reps won’t waste time with prospects that aren’t likely to buy.

Step 3: Choose your best contact and negotiation strategies

Each industry and field has its own personality and methods. If you’re selling to enterprises, or older, more established companies, you may need to add steps in the contact stage to run things past more stakeholders. When selling to younger, more digital-age companies and startups, you might try implementing more video sales calls or interactive demos.

🚀 How this accelerates your process:

With your customer base clearly in mind, setting rules for the best contact and negotiation strategies will help your reps sell more effectively to that particular group.

Pro tip: If you have multiple customer profiles, you can create adapted processes for each profile.

Step 4: Identify stages that are unique to your business

Since your sales pipeline must be unique to you, it’s important to adapt the above stages to fit your particular business.

  • B2B sellers may need extra stages to include stakeholders
  • SaaS sellers might include stages for demos instead of meetings
  • Real estate agents might include stages for visits to the property
  • Remote sales reps could include specific stages for video chats and sending digital contracts

🚀 How this accelerates your process:

When you add the stages that are specific to your business, the process will be smoother and more effective for you and your team.

Step 5: Work out specific steps for post-sale follow-ups and retention methods

What kind of follow-ups seem to resonate more with your customers? How many respond to a ‘checking in’ email as opposed to a phone call? Are they more likely to fill out a survey with their feedback, or would they rather talk to someone about their concerns?

🚀 How this accelerates your process:

By answering these questions, you’ll have a clear view of the kind of follow-ups that work best with your customer base. Then, your sales team can focus on those efforts rather than letting their follow-ups fall on deaf ears.

These five sales pipeline steps will help you analyze the stages of your sales pipeline, define your processes, and ultimately create a pipeline that is adapted to your business.

Build your own sales pipeline with custom stages

Your pipes are all clear: it’s time to let the customers flow in.

Above, we highlighted the seven essential stages your sales pipeline should have. They are:

  1. Lead generation
  2. Prospecting
  3. Qualification
  4. Contact
  5. Proposal
  6. Negotiation and close
  7. Retention

Then, we developed five steps you can take to define and implement these stages in your sales pipeline:

  1. Define your process for lead generation and prospecting
  2. Understand your qualification methods and needs
  3. Choose your best contact and negotiation strategies
  4. Identify stages that are unique to your business
  5. Work out specific steps for post-sale follow-ups and retention methods

With these steps, you’ll be able to outline a sales pipeline that is effective for your sales team and unique customer base.

Ready to build your own sales pipeline? Then click through to read Chapter 3: How to Build a Sales Pipeline.


Sales Pipeline Guide: Table of Contents

Table of Contents

Read next chapter ⇢