How to Close More Deals With the 7 Sales Pipeline Stages

Long-term contracts and business-to-business sales are a complex process, often involving many stakeholders. Sales teams often need to build influence and gain ‌consensus over a long period of time.

To boost sales and revenue, businesses have operationalized the sales process, allowing them to better understand each point of contact with the customer. Since each business has a unique sales cycle, they also need to customize the stages to their industry and customer base.

In this article, we’ll explain what the sales pipeline is and why it matters, as well as what seven stages appear in a typical sales pipeline. Then we’ll cover how you can customize your sales pipeline stages and continuously improve.

What is the sales pipeline?

Most sales professionals are constantly analyzing their pipeline, but to make sure we’re on the same page, this is how we define the sales pipeline: a summary and representation of your business’s potential sales, typically over a period of time, such as one year. The sales pipeline typically lives in your customer relationship management (CRM) system, which should allow you to map the entire sales cycle.

The sales pipeline is split into stages to give you a better understanding of a customer’s state of mind and how to sell to them. It includes everything from accounts that have only one interaction with your brand all the way up to closed-won opportunities. The sales pipeline is an important tool for sales teams to set goals, manage resources, and nurture qualified leads.

Sales pipeline vs sales funnel

Although “sales pipeline” and “sales funnel” are frequently used interchangeably, they're actually different. A sales pipeline is a map of your sales cycle and a summary of all the prospects currently in it. Therefore, the sales pipeline can be quantified by estimating the size of the potential deals.

The sales funnel, on the other hand, is more of a guiding concept that marketers and sales teams use to categorize potential customers as aware of, interested in, or intending to buy the product.

How to optimize each of the 7 stages of the sales pipeline

Much like the sales funnel, the stages describe where each lead is in the sales process (sales pipeline stages, however, are more precise). When a sales rep knows what stage a prospect is in, they understand how familiar the lead is with your product and this informs how the rep works with the lead.

Most businesses’ sales cycle fits into a 7-stage process. While specific criteria for stages can depend on the company (read on for customization), most sales leads will move through these stages.

1. Prospecting

Prospecting is the stage where your team identifies and makes initial outreach to potential buyers. This is where a lead enters the pipeline. Most companies look for large numbers of prospects, knowing that only a fraction of them will become customers.

A prospect can come from marketing initiatives such as email campaigns, social media, content marketing, and event marketing. For example, many B2B software-as-a-service companies offer content assets like white papers and ebooks in exchange for a prospect’s contact information.

One of the most popular places to do prospecting now is LinkedIn, but depending on the type of business, there are many other lead sources. If you are looking for new businesses, refer to your state’s corporate registration. And of course, leads can always be purchased.

Sales teams also do proactive prospecting, contacting potential leads. Businesses should develop buyer personas and ideal customer profiles (ICPs), which allow them to target the most promising prospects. In many cases, a sales representative will identify a potential customer and contact them with a cold email or phone call.

Common problems

• Inconsistent or incomplete prospect information
• Lack of initial marketing or sales engagement

How to improve

• Standardize what data you need to create a new lead (Full name, email, phone number, etc.)
• Identify and invest in your most productive prospecting channels (content, events, social media, etc.)
• Connect your web forms directly to your CRM, so new leads are automatically created

2. Qualification

While prospecting, your sales and marketing team will cast a wide net to identify as many leads as possible. Qualification is when you determine whether the prospective customer is‌ a good fit for your product and whether they are at all interested. It’s not unlike a company's hiring process. Initially, the employer receives a large pool of applicants. The next step is reviewing their resumés and credentials if they are qualified for the position.

For many sales teams, qualification means researching a customer to determine whether they fit into their customer profile. For example, if you sell an enterprise product, you need to confirm that a lead has the revenue to purchase the product.

You can use various strategies to enhance and practice your team's relationship-building skills. Examples are role-playing, networking opportunities, emotional intelligence training, and fostering a customer-centric mindset.

Another aspect of qualification is confirming that the customer is interested in what you have to offer. This can be done by offering an ebook or webinar, or by making contact with the sales opportunity to talk about their needs.

Contacting a lead can be a long process and TigerLRM offers tools like our Auto Follow-up feature, that allows prospects to be contacted in campaigns that use both email and even SMS. This saves them time and effort as all of this should be built out within their system. The sales person just needs to go in and set it up and personalize it.

Common problems

• Lack of accessible information about the prospect
• Sales reps not understanding the business’s ideal customer profiles

How to improve

• Create a lead qualification and research section in your sales playbook
• Maintain up-to-date customer personas and communicate how to identify them
• Use automated outreach to gauge interest and begin educating leads

3. Demo or meeting

While prospecting, qualification can involve direct interaction with a lead, the third stage of the sales pipeline is when a sales team works much more closely with the potential customer. Once you know the lead is a good fit for your product, you begin actively educating and selling.

For many SaaS companies, this stage includes a customized product demonstration. It’s a good idea for the sales rep to have introductory or discovery calls or meetings with the qualified lead to discover their pain points and understand what functionality and features are important to them. When you understand the customer’s challenges, you are better prepared to solve them. The sales team can then choose examples and feature demonstrations that show how the product will solve the customer’s problems.

It’s not uncommon for this stage to involve significant back-and-forth and advocacy on the part of both the sales rep and their main contact. You may have multiple meetings with different stakeholders and decision-makers. With each call or meeting, you should be prepared to overcome objections and explain why your product is the best fit for their needs.

After each meeting or demonstration, your sales reps must add notes, objections, and new insights to the account in your CRM. This will help your team prepare for future interactions and better understand the prospective customer’s needs. This is why it’s so important for all members of the sales team to diligently update contact records. You can then use your sales enablement platform to document common objections and effective rebuttals.

Common problems

• Stakeholder objections
• Non-relevant examples and feature demonstrations
• Missing stakeholders

How to improve

• Identify and invite all stakeholders who will need to use or approve the purchase
• Create a thorough list of customer objections and strategies for overcoming them
• Build a library of case studies and examples for use in demos

4. Proposal

At this point, you know the lead fits your customer profile and you’ve shown that your product is a good fit for the prospect. This is when you start talking about pricing and what specific package, plan, or products your company can provide to this customer.

Like your sales communications, you should tailor your proposal and how you deliver it to the prospect. All your previous conversations with different stakeholders can provide details to consider as you propose a sale (either standard or customized).

In B2B and SaaS sales, contracts and pricing are often tailored to the customer’s needs, so be prepared to discuss which details are negotiable.

Common problems

• Sticker shock (due to poor communication)
• Reaching the decision-maker

How to improve

• Refer to pricing structures and plans throughout the selling process
• Identify decision-makers and understand the customer’s purchasing process early on
• Create proposal templates to help sales reps clearly communicate your offerings

5. Negotiation and commitment

It’s rare that a lead will accept your first proposal. Your initial proposal usually leads directly to a period of negotiations between your company and the potential customer. The customer may ask for contract changes, payment plan accommodations, special services, or custom pricing. While all these adjustments can be time-consuming and even frustrating, the wide range of negotiable details are key to reaching an agreement that suits both parties.

It’s not uncommon for potential customers to get stuck on a single point of negotiation. If this happens then the sales rep should work on areas where there is common ground. The salesperson should control the flow of the conversations, not the prospect.

Many sales departments will empower their account executives or managers to offer certain discounts or changes. Larger changes may involve sales executives, legal resources, or company leadership. After calls, counter-offers, and compromises, by the end of this stage, you and the customer usually have a verbal agreement.

Common problems

• Unrealistic buyer expectations
• Getting stuck on a single issue or feature

How to improve

• Create a clear process for negotiations and what offers sales leaders are empowered to make
• Anticipate any special requests and communicate them to your internal decision-makers

6. Closing the deal

A verbal agreement is great, but this is when you turn that non-binding commitment into a legal contract. Along with sales managers, your legal resources need to review all contracts. Today, most companies use online signature software like DocuSign to complete contracts quickly and easily.

Common problems

• Internal backlog or lack of legal resources

How to improve

• Create contract templates for different types of deals
• Document and implement a signature procedure and timeline

7. Post-purchase and retention

While the deal is officially closed and won in the previous stage, the post-purchase and retention stage is also vital for building revenue. Rather than simply celebrating, the sales team needs to work closely to hand off the account to customer success. All the information that sales reps have learned about the account will be valuable in onboarding your new customers.

While this first purchase has been secured, the post-purchase stage has a huge impact on which customers you will retain when the contract is up for renewal.

Common problems

• Poor product adoption
• Insufficient onboarding and training

How to improve

• Enable sales and customer success to share information and offer feedback
• Set goals for each client’s onboarding and adoption process

Customize sales pipeline stages in your CRM

The sales stages listed above are relevant for most businesses, but the stages and sales pipeline itself usually involve some customization. In TigerLRM, you have control over how you define these pipeline stages.

For example, you can choose at what point a prospect is ready to move from qualification to the demo/meeting stage. You could set the criteria at confirming they are the right type and size of business or you could use automated lead scoring our CRM to maintain an up-to-the-minute understanding of each lead’s level of engagement.

You can also adjust the stages based on different customer personas. For instance, you may know that leads in a certain vertical need a longer demo and meeting stage. You can create separate sales processes and timelines to help your sales reps give each lead the attention they need.

Along with a CRM and sales enablement solution, TigerLRM is a sales pipeline management tool. Customize your sales stages and win probability to generate in-depth revenue forecasts and sales goals.

Understand and optimize your sales pipeline

The sales pipeline is a vital tool for your sales and marketing teams. It tells you the current state of your potential deals and allows you to plan and set goals for the future.

The good news is that you don’t need to reinvent the wheel. If you haven’t yet devoted much time to your sales pipeline, you can start with the seven stages above and make changes as needed.

Find out how TigerLRM’s CRM and sales enablement platform can help you grow and improve your sales pipeline, schedule a demo.