Sales Pipeline Management: A Comprehensive Guide

Sales pipeline management can help you use your sales pipeline to visualize your sales process and look for insight that helps you close more deals. By building a sales pipeline, setting key metrics to watch, and adjusting your sales strategy to your data, you can use sales pipeline management to make more progress toward your company’s goals. 

Explore sales pipeline management and how to start analyzing your sales pipeline. 

What is sales pipeline management?

Sales pipeline management is the process of taking an analytical approach. It enables your sales staff to gain the resources and budget they need to take full advantage of each stage of the sales pipeline. By understanding your sales pipeline and how it works, you can optimize your performance to make the most sales. 

Breaking down your sales process into a pipeline, you can visualize the way that customers move from first hearing about your product to eventually making a sale. For example, you may have difficulty locating potential customers; however, a good portion of customers who visit your website make purchases independently. Or, perhaps your company has an easy time finding potential customers, but they drop off somewhere before completing a sale. These insights can help you reallocate your sales team’s resources more effectively, directing focus toward the areas of the sales pipeline where customers may require more attention and nurturing. 

Using this insight, you could optimize your sales process by requesting a sales quota from your team, making sure your staff covers every step of the funnel, and unblocking challenges that prevent your customers from making a sale. 

How can you use a sales pipeline and why is it important?

You can use the sales pipeline to estimate your sales forecasts, track metrics to understand how your team closes sales, attract new customers, and keep a steady flow of potential customers moving down the pipeline. Understanding your pipeline can also help you optimize inventory and cash flow by forecasting future needs and income. The advantage of the sales pipeline is that it allows you to visualize your entire sales process and look for patterns to take advantage of or obstacles to overcome. 

To analyze your sales pipeline, it’s important to understand how to visualize your sales process and what metrics you’ll need to measure performance. 

Sales pipeline stages

Analyzing your sales pipeline means first taking a look at how you define your specific stages. Even in similar industries, you may have a slightly different process from other companies' sales strategies. A few typical stages of the sales pipeline include: 

Prospecting: In the first stage, you gather people who might be interested in purchasing your goods or services. 

Lead qualification: The second step is to qualify your leads. Identify which prospects are a good fit for your offerings and/or more likely to make a purchase. 

Making contact: Next, you’ll need to make first contact with your qualified leads. This could be sending an email, making a phone call, or stopping by to introduce yourself. 

Proposal: After you’ve introduced yourself and had a chance to get to know your potential client’s needs, you can present them with a proposal for how your product will make their lives easier or solve a problem for them. 

Negotiation: Next, you will need to negotiate items like pricing, scope, and expectations for success for both parties. 

Closing the deal: After you’ve negotiated the terms of the agreement, you can close the deal and sign the contracts or purchase agreements. 

Post-purchase: You can create an additional step to your pipeline for nurturing relationships with clients after they make a purchase to establish a longer-term relationship. 

Key metrics for analyzing your sales pipeline

The second important piece you’ll need to analyze in your sales pipeline is your performance metrics. These data points help you to understand and measure how your company is progressing toward its sales goals. A few metrics that can provide insight and help you manage your sales pipeline include: 

• Number of people at every stage of the pipeline: This metric will help you measure the volume of leads generated, how many of those leads you’ve qualified, and how that number diminishes as you move through the pipeline. 

• Sales activity: You can use this metric to understand how many phone calls, emails, sales calls, and other sales activities your team uses to populate your sales pipeline. 

• Average deal size: In addition to how many deals you have in your pipeline, you can measure the average deal size to estimate what those deals might be worth. 

• Average time to close deals: To understand the length of your sales cycle, you can measure how long it takes your team to close deals. People often refer to this as your “sales velocity.” However, this term can also refer to a combination of the time needed to close deals and the average deal size.

• Customer acquisition cost: Use this metric to understand the cost of moving a customer from the first stage of your sales pipeline through to their first sale. This is the cost you needed to spend to gain this customer. 

• Win rate: Win rate is a metric that measures how often you close the deal and how often potential customers fall out of your pipeline before they reach the closing stage. 

• Average revenue per user or customer: This metric can help you understand the average value of bringing on a new customer throughout their entire relationship with your company. 

Who uses sales pipeline management?

If you want to start a career in sales pipeline management, a few potential career choices include sales specialist, sales manager, and lead generation specialist. Explore the details of these careers, including average salary and job outlook. 

Sales manager

Average base salary in the US (Glassdoor): $85,950 [1]

Job outlook (projected growth from 2023 to 2033): 6 percent [2]

As a sales manager, you will be in charge of running a sales program. Depending on your role within the company, you could manage client accounts directly, or you could lead a team of sales staff. You will develop sales strategies and measure metrics to understand how to improve your sales strategies. 

Sales operations manager

Average base salary in the US (Glassdoor): $93,035 [3]

Job outlook (projected growth from 2023 to 2033): 6 percent [2]

As a sales operations manager, you will oversee the operations of a sales team. Your responsibilities typically include creating goals, implementing a sales strategy, and analyzing performance based on sales metrics. In this role, you will help determine how the sales department will run and what processes your team will use to close deals. 

Lead generation specialist 

Average base salary in the US (Glassdoor): $54,026 [4]

Job outlook (projected growth from 2023 to 2033): 8 percent [5]

You will find sales opportunities for your company as a lead generation specialist. You will often work for industries where you are selling products or services to other companies. You may reach out to people who haven’t heard of your product but could be potential customers. In this role, you will evaluate and score leads before handing them over to another member of the sales team. 

Steps to effective sales pipeline management

To practice good sales pipeline management, you should thoughtfully build your pipeline and keep it in good condition. Then, you will need to analyze the data you gather from your pipeline before implementing those insights into your sales strategy. 

Step 1. Build your pipeline: First, you will need to build your pipeline. Once you’ve visualized your sales process, you have a place to begin that you can map your metrics onto. Defining the steps in your pipeline and mapping your sales processes will help you understand how your team moves potential clients through every stage. 

Step 2. Gather data for metrics: Next, you’ll need to gather data. The exact metrics you need to pay attention to will depend on your business goals and the challenges you've faced. That said, it’s a good idea to collect any data you can to make it available for later analysis. You can also clean your pipeline by removing old leads that have likely fallen off, requalifying leads who may still be interested but haven’t moved in a long time, and following up with cold leads who could potentially move to the next phase. 

Step 3. Analyze your pipeline: When you’re ready, you can use that data to understand more about your sales process. You can review your pipeline metrics to identify patterns in a big-picture way, or you can determine what questions you want answered before you begin your analysis. When you encounter potential challenges in your sales process, consider digging deeper to determine what causes those bottlenecks and what you can do to address them. 

Step 4. Use those insights to adjust your strategy: Next, you can implement changes to your sales strategy and monitor changes to your key metrics to measure whether those changes are working. Sales pipeline management is a process you can continuously engage with as your market, industry, or products change. 

Learn about sales pipeline management on Coursera

Sales pipeline management can help you build a stronger sales process. If you want to learn more about nurturing your leads, unlock your potential in tech sales, and build job-ready skills for an in-demand career as an entry-level, consider the Salesforce Sales Development Representative Professional Certificate by Salesforce on Coursera.