Step-by-step Guide to Building a Sales Pipeline for Your B2B Business
December 15th 2021
Sales Best Practices
B2B Sales Pipeline
The sales pipeline defines your path to revenue generation. The more control and visibility you have over the sales pipeline, the more significant revenue is generated — the more opportunities in your sales pipeline, the better chance of reaching or exceeding revenue targets. The sales process can help build a sales pipeline, segment active deals from stagnant ones, and manage them throughout the sales cycle. We have a detailed guide on everything you need to know about building a sales pipeline for consistent revenue generation.

Table of Contents

  • What is a Sales Pipeline?
  • Importance of Sales Pipeline
  • Sales Funnel vs. Sales Pipeline
  • Sales Pipeline Stages
  • Step-by-step Guide to Building a Smooth Sales Pipeline
  • Important Metrics to Track Sales Pipeline Performance
  • Win More Deals with Sales Pipeline Management

What is a Sales Pipeline?

A sales pipeline is the set of opportunities across different stages of the sales process. It provides the number of deals and their value in the pipeline. It creates the journey that your prospects will choose to become a customer. It enables the sales reps to prioritize prospects, streamline sales activities, and forecast revenue generation.

Every prospect moves through the sales pipeline at a different pace. Factors like level of interest, urgency, knowledge, budget, among others, play an essential role in determining their pace. Specific prospects may skip stages and move faster in the sales pipeline. For example, if a prospect has the decision-making authority, you can skip the initial connect stage and proceed directly to meeting with the decision-maker.

Sales Pipeline

Importance of Sales Pipeline

While it would be most convenient if a prospect approached you and purchased your product or service immediately, this is not a usual scenario. The sales process is designed to educate, nurture, connect, compensate, and convert prospects into customers. How is the sales pipeline essential here? Let’s find out.

Monitor Progress & Performance

You can track prospects in your sales pipeline across each stage to determine the ideal time to close a sale. It enables you to be proactive to the changes rather than reactive. You can identify potential issues and address them on time to increase your sales performance.

Comprehensive Deal Insights

A sales pipeline provides insights into the financial performance to identify prospects that are most likely to turn into customers. You can identify as and when the size of deals in your pipeline increases. It helps you prioritize prospects based on their progress towards closure.

Make Revenue a Predictable Process

Sales pipeline helps determine the value of deals that are most likely to close. It can help you predict revenue generation based on the progress of prospects in your pipeline.

Optimize Sales Process

You can control the health of your sales process with a sales pipeline. It helps you review your strategy based on the accounts in the pipeline. For example, you have prospects in the pipeline who have gone unresponsive but need your product or service to overcome their challenges. You can personalize the approach for them and maintain the consistency of new opportunities.

The sales pipeline opens doors to measuring the performance of your sales team and monitoring their targets. It helps sales reps learn from one another to bring out consistent results. While the sales pipeline is essential, is it the same as a sales funnel?

The answer is no.

Sales Funnel vs. Sales Pipeline

While the sales pipeline speaks about opportunities, the sales funnel concentrates on prospects. Every step in your sales process that moves an opportunity from start to closure can be referred to in the sales pipeline. But the sales funnel includes the stages of the buying process that prospects go through to become customers.

Sales Funnel Vs Sales Pipeline

Sales Pipeline Stages

The sales pipeline summarizes upcoming sales opportunities, revenue generation, the roadblocks in the sales funnel, and the projected cash flow. The sales pipeline stages include:

  • Lead Generation

  • SEO, advertising, and other marketing and promotional activities can attract prospective customers to discover your product or service. Lead generation based on predetermined parameters can help you reach prospects who match your ideal customer profile. Not all leads will move ahead in the pipeline. But how do you identify the ones that will?

  • Lead Qualification

  • To move your prospects up in the sales pipeline, you need to qualify them. Adding downloadable resources like e-books, webinars, and others to your website can work as lead magnets. They can help in determining if your target group is interested in learning more about your products or services. You could even ask some important questions to qualify your existing list of prospects.

  • First Touch or Introduction

  • Having a lead qualification strategy at hand streamlines the quality of prospects. An introduction call to understand prospects’ relevance and gather information can help map your product or service against their needs.

  • Demo or Meeting

  • After the first touch, if the prospect matches your ideal customer profile, you could schedule a meeting or demo. Introducing your product or service becomes critical if your initial conversation is positive. Highlighting the use cases and your value proposition can influence your prospects’ decisions. Bring out your competitive advantages to convince them to choose you over other competitors.

  • Negotiation

  • Even if a prospect shows interest in buying your product or service, negotiation is essential to maintain transparency in the relationship. Price, timelines, the scope of work, expectations, among others, could be points of negotiations. Keeping the discussion clean and mutually beneficial is important to kickstart a long-term business relationship.

  • Close the deal

  • Keep the communication with your prospects consistent. Closing the deal is the final stage of the sales pipeline, where you document the discussed expectations and mark the opportunity as won. Suppose a prospect is indecisive at this stage; you can continue nurturing them and connect at a more appropriate time.

Knowing the different stages of a sales pipeline can simplify the process of building one for your organization. We’ve further simplified how to make a smooth sales pipeline for your B2B business with a quick guide.

Step-by-step Guide to Building a Smooth Sales Pipeline

Keep your sales pipeline flexible to channel different prospects and changes in their purchase behavior. Review and update to fix broken aspects or accelerate sales with unexplored opportunities. Here’s everything you should know while building a sales pipeline.

Step 1: Identify prospects & sales pipeline stages

Consolidate the list of prospective customers into your sales pipeline and align them based on their stages in the sales journey. For example, if a sales rep has had an introductory call with a prospect, the stage assigned could be ‘first touch or introduction.’ If another prospect has requested a demo, the stage could be a ‘demo or meeting.’ Likewise, you can categorize prospects based on their stage. Segmenting opportunities by stages help in prioritization and coordination within the team.

Step 2: Streamline Sales Activities

Organizing the sales activities through a workflow can help streamline and bring consistency to communication. You can ensure consistent outcomes with a sales workflow in place. It helps sales reps foresee tasks and never miss out on following up for an opportunity.

Step 3: Determine Sales Cycle Length

The sales pipeline depends on the length of the sales cycle. The time sales reps typically take to close a deal helps keep a consistent pipeline. Factors that affect the sales cycle length include:

  • Product or service
  • Not every product or service is the same, and the time to sell them may differ from one organization to another. Identifying what suits best to your prospects is

  • Personalization
  • Personalizing the sales journey for prospects is time-consuming and may require additional time. It’s essential to predefine how much time is essential for personalization without impacting the experience.

  • Lead source
  • Prospects through outbound sales may take longer to close when compared to inbound sales. Keeping that in mind, you can determine the sales cycle duration.

Step 4: Size of Sales Pipeline

Estimating the size of the sales pipeline can help your sales reps determine their periodic quota. You can go backward to estimate the number of opportunities required to reach your revenue goals. While building a sales pipeline, you need to keep flowing without going stagnant. You can identify static opportunities and remove them from the pipeline to approach at a more suitable time.

Step 5: Measure the Performance

The sales pipeline is a primary source of measuring the performance of your sales team. It helps you identify whether or not the strategy is working. With consistent tracking and monitoring, you can take quick actions like changing sales activities, adding more resources, among others. It is essential to measure progress to remove roadblocks from your pipeline to ensure consistent revenue generation.

Important Metrics to Track Sales Pipeline Performance

Metrics help you measure the performance and fill in the gaps to do better. You can use the following metrics to track and measure your sales pipeline performance.

  1. No. of deals in the pipeline

  2. You need clear visibility of the number of deals pursued by your sales team. To ensure your pipeline keeps flowing, you need to keep track of the number of deals in the pipeline.

    No. of deals in pipeline = No. of qualified opportunities in the pipeline

  3. Avg. deal value

  4. Every prospect is worth a specific value. Even though the deal value can change by the time a prospect is converted to a customer, the average deal value helps predict revenue.

    Avg. deal value = Sum of the total value of all closed deals ÷ No. of deals won

  5. Avg. win rate

  6. While several opportunities appear in the pipeline, the ones that convert into a sale may not be the same. The average win rate can help in identifying top performers of the team.

    Avg. win rate = Qualified Prospects ÷ Opportunities

  7. Lead to opportunity ratio or conversion rate

  8. The opportunity conversion rate helps in identifying the gaps in the sales process. You can review and update your strategy to ensure more opportunities are converted into customers.

    Lead to opportunity ratio = Total no. of closed deals ÷ Total no. of deals in the pipeline

  9. Pipeline value

  10. The pipeline value helps predict revenue and plan your strategy to reach goals.

    Pipeline value = Total value of all deals in the pipeline

Win More Deals with Sales Pipeline Management

With the evolution in sales, customer expectations also continue to change. A comprehensive sales pipeline management can help you accelerate your revenue generation by focusing on long-term relationships, automating repetitive tasks, and guided selling to close more deals faster.

Richa Sharma
Content Marketer
Richa Sharma
Content Marketer
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