A sales pipeline is a kind of visual representation of the various stages needed to convert potential customers into a client. The status indicates their (potential customers’) respective position in the pipeline thereby enabling an individual salesperson or a company to forecast the amount of sales that can take place in a given time period. A sales pipeline ascertains whether or not the process of sales is following the right steps. A well designed sales pipeline often determines long-term success of a firm starting from proper lead generation to maintaining a loyal customer base.
A sales pipeline essentially also diagrammatically describes the process of selling. It encompasses all the necessary steps which are needed to be taken in order to complete a sales process and also ensure long term customer loyalty. It vividly describes the entire journey taken by a salesperson starting from the process of acquiring the information about the potential customer, making the initial contact, qualifying the prospect as a lead and then further qualifying the lead as a prospective customer and then finally closing the deal and providing the customer a post-sale service. This entire process is represented by a sales pipeline.
Stages of a Sales Pipeline
There are seven broad stages which need to be followed for implementing a sales pipeline. If you are an individual salesperson or a company, you can follow these seven steps to ensure long term sustainability of your selling process.
The following are the seven essential stages of a sales pipeline:
- Lead Generation
- Nurturing of Leads
- Marketing Qualified Leads
- Sales Accepted Leads
- Sales Qualified Leads
- Closing the Deal
- Providing Post-Sale Service
The first step of a sales pipeline is lead generation. Following a mix of marketing strategies like email marketing campaigns, organizing events and sharing web content, the company can generate considerable amount of leads for their product or service.
The first step of the sales pipeline is very essential as the company needs to accumulate as many leads as possible to ensure the success of the following stages.
Lead nurturing is the second stage of a sales pipeline. A company can qualify the leads, generated in the first round, even further by means of marketing automation tools. This helps them to obtain the list of quality leads.
Lead nurturing is a very effective and efficient technique as it not only ensures more accuracy in the entire selling process but at the same time it also makes sure that the company does not waste money after pursuing the wrong leads.
Marketing Qualified Lead
The leads which are more likely to become a customer are filtered out by the process of lead nurturing. With the help of marketing analysis the Market Qualified Leads are being filtered.
Ideally these leads are the ones which are perceived to be more important than the others. The marketing department of the company needs to consider these leads as the base of any further marketing process.
Sales Accepted Leads
The Market Qualified Leads are further filtered by means of matching the key targeting criteria in order to obtain the Sales Accepted Leads. Initially after filtering the information on the basis of parameters like demographics and occupation, in this stage the leads are further classified based on various socio-economic and psychographic segmentations.
The Sales Accepted Leads have verified propensity or intent of making the final purchase. This is in fact is the last stage of lead filtration, done from the strategic marketing perspective, till it is given to the sales rep, who on their part, further classifies the data according to their knowledge and understanding.
Sales Qualified Leads
The sales representatives then further analyses the leads and then delegates them to a dedicated account manager. Sales Qualified Leads are quantifiable sales opportunities. The leads have specific and clarified needs that they have mentioned. There is also a specific timeline and budget associated with this list.
These are the list of leads that have already made viable purchase decision. These are the list of people who are almost ready to make the final purchase of the product or the service. This is the step where the lead gets transformed into a prospective customer.
Closing the Deal
The deal is closed when finally the lead or the account which is being targeted, completes the purchase within the specific time period. Closing a deal, also essentially indicates the conversion of a lead into revenue for the firm.
The salesperson or the company must ensure timely delivery and implementation of the product or the service at the desired location of the purchaser. This is the step where the prospective customer gets transformed into an actual client for the company.
According to the fundamentals of the concept of sales pipeline, the revenue generated from the sales should be attributed in order to make the sales campaigns better and stronger. The target of the new campaign should involve more lead generation and conversions.
Providing Post-Sales Service
The steps of a sales pipeline does not end after closing the sales deal. Post-sales service is also critical in ensuring long-term loyalty of the customers. Continuing the engagement with the client often results in more sales in the form of referrals and repeat purchases.
This is a very critical aspect of the concept of sales pipeline. Post-sale services do not guarantee instant profit for the firm but in the long run it helps the firm to make more profits.
Loyal customers are more likely to contribute to the revenue of the firm by making additional purchases or referring the services or the product to other potential customers. So, old clients can also be a good source of quality lead generation for the firm.
Sales pipeline follows systematic steps of generating leads and transforming them into customers for the company. Starting from lead generation to providing post-sales services, every step of the pipeline is critical for the success of the selling process. A successful sales pipeline will help the company convert its best customers into consultants who will provide them with further leads.