5 Sales Pipeline Stages to Maximize Your Conversions
When trying to make a sale, it would be really beneficial to know where your prospects (and your money) are along every step of the process, right? Two words - sales pipeline. It’s the best indicator of your company’s progress and a perfect place to track all your deals.
Sit through this article, as we guide you through 5 sales pipeline stages designed to maximize your conversions.
What is a Sales Pipeline?
TechTarget defines a sales pipeline the following way:
“A sales pipeline is a visual representation of sales prospects and where they are in the purchasing process. Pipelines also provide an overview of a sales rep's account forecast and how close he is to making quota, as well as how close a sales team as a whole is to reaching quota. This enables sales reps and sales managers to forecast the number and dollar amounts of deals that will close in a given period of time.”
In other words, a sales pipeline is a particular set of actions a sales rep needs to undertake if they wish to turn new leads into customers. Once each sales pipeline stage is completed, the prospect advances to the next one.
Sales pipelines are a practical way for sellers to keep track of the status and progress (or the lack of it) of every deal and understand whether their sales process needs any changes. For a better overview, sales pipelines are often visually represented in a CRM.
‘Sales pipeline’ and ‘sales funnel’ are the terms that can often be heard in the same conversation. Is there any difference between the two?
Sales Pipeline vs. Sales Funnel
Often you’ll find the terms ‘sales pipeline’ and ‘sales funnel’ used interchangeably. But you may want to take caution with that. Even though both describe the movement of prospects through a sale process, there’s an important difference between the two.
A sales funnel, in simple terms, is a set of steps a customer needs to go through before reaching a conversion. In the simplest of terms, it’s a path your customers-to-be take from the moment they find out about you to the moment they make a purchase from you and perhaps become your loyal customers.
So, while the term ‘sales funnel’ is used to represent your customer’s journey and all the actions they take to move from awareness to conversion, a ‘sales pipeline’ represents the set of actions taken by sales representatives during the sales process. Unlike a sales funnel, which is all about moving from awareness to making a purchase, a sales pipeline is pretty much all about getting and qualifying leads before eventually closing the deal.
That being said, there is one point of interest where sales funnels and sales pipelines overlap the most - leads. But we’ll talk about lead generation a bit later in more detail.
In case you want to learn more about marketing and sales funnels, we’ve already written about the magic of funnels and how to maximize your funnel’s effectiveness using this “secret ingredient”.
5 Sales Pipeline Stages Every Business Should Implement
As sales pipeline stages differ from company to company (and product to product), your sales pipeline should be unique and its stages should reflect the typical journey of YOUR customers. A typical pipeline in most cases contains 5 stages, but the number of sales pipeline stages may vary depending on the type of your business, your niche, and the products or services you’re trying to sell.
1. Lead generation
According to the Forrester market research company, 99% of leads never get converted into customers. This means that, in most cases, only 1% of your lead generation efforts will bring actual benefit to your company.
Lead generation is the process of engaging and attracting your prospects through various marketing campaigns with the aim of capturing their contact (and other relevant) information. The three most common marketing methods for lead generation are emails (78%), events (73%), and content (67%).
One of the most effective methods for lead generation, however, are online quizzes. Let’s face it, they are present everywhere. From your Facebook feed, over Twitter, to Buzzfeed and other popular websites, the online world is swarming with quizzes.
While ‘regular’ people take quizzes just for fun, many digital marketers and sales reps have recognized their outstanding potential for lead generation. Our own data shows that, on average, online quizzes have a lead capture rate of 31.6%.
Moreover, LeadQuizzes users have generated 3,628,334 leads using online quizzes and still counting. Take a moment to let that sink in. And then learn how to create your own high-converting quiz in just minutes.
2. Lead nurturing
Lead nurturing is the second in the line of sales pipeline stages and represents the process of engaging a defined target group of potential customers. In most cases, it’s done by providing relevant information expected to help move the prospects through your sales pipeline until they become paying customers. Plainly speaking, lead nurturing means building relationships with people who are not ready to buy at the moment, but could become your customers at some point in the future.
Among other things, its purpose is to create awareness, educate, and build trust, so that when a potential customer actually decides to make a purchase, they choose you and not one of your competitors. Lead nurturing can be done effectively by using marketing automation tools to further qualify leads and send follow-ups.
If you’ve decided to use online quizzes for lead generation, for example, you can easily integrate LeadQuizzes with your email list so you are able to send different follow-up emails to potential customers based on the quiz outcome they get. LeadQuizzes offers a bunch of integrations with the most popular email automation tools around, including MailChimp, Zapier, ActiveCampaign, ConvertKit, AWeber, and so on.
Is lead nurturing THAT important? Yes. According to some reports, companies that excel at lead nurturing generate 50% more sales-ready leads at a 33% lower cost.
3. Lead Qualification
In this sales pipeline stage, the sales representatives aim to obtain answers about their leads in order to qualify them as accurately as possible. The information they’re looking for might include:
- Do they have a need for your product or service?
- Can they afford to purchase it?
- Is your product a right fit for them? Does it solve any of their problems?
And so on.
Due to their rather personal nature, quizzes can also reveal a lot of user-specific data. If you learn how to ask all the right quiz questions, the answers to those could reveal you a lot of valuable information about your prospects that can guide you through the process of lead qualification.
When accepted, marketing qualified leads are then pursued by the sales team, typically via a follow-up phone call. Sales accepted leads must match key targeting criteria and have a “verified propensity to buy”.
Sales accepted leads are further qualified and assigned to dedicated account managers. This is when leads turn into opportunities (or they don’t). According to some case studies, around 13% of leads turn into opportunities.
4. Close the Deal (or No Deal)
If all goes well, this is the point where your prospects decide to make a purchase and convert into revenue. Or, if not, this is where they bail out.
Only 6% of opportunities turn into deals. So here are a couple of things you can do to try to increase the number of completed deals:
- Add extra value to your offer (speed up the product delivery, offer assistance with implementation, include a free ebook, etc.)
- Track and optimize your campaigns (attribute revenue using sales/marketing data to see which areas of your campaigns need improvement)
So, you’ve closed a deal and made a sale, now it’s time to move onto the next potential customer and forget all about this one, right? Wrong.
Even though many businesses treat the sale as the ultimate end of the pipeline, it’s not where the customer relationship management should end. By continuing to engage and add more value after the sale, it’s possible to increase the ROI even further.
These are the two main objectives that can be achieved in the post-sale pipeline stage:
- Build loyalty. To do so, you need to keep positively engaging with your customers. After you build loyalty with them, some of your most loyal customers can become advocates of your brand. You also need to make sure to provide enough room for feedback and collaboration.
- Repurchase. Loyal, satisfied customers will continue purchasing your additional products, services, or features. For example, they may decide to upgrade their plan or purchase some of the premium services.