How many leads you have depends on how well you manage your sales pipeline.
But what is it?
A sales pipeline is a visual way to track your inbound and outbound leads as they move through the sales process.
In this article, you will learn everything about the sales pipeline: what it is, how it works, how to create one, and the best practices to start using today.
What is a sales pipeline?
A sales pipeline is a visual concept that illustrates the current stage of each prospect within the sales process.
It’s an organized way of tracking potential buyers as they progress in their buyer’s journey.
The goal of a sales pipeline is to identify the next steps and any obstacles or delays that prevent closing a deal.
If you do your lead tracking right, you have all the relevant data to feed to your sales pipeline and keep it filled with incoming leads.
What is a sales pipeline made of?
Sales pipeline can look very different in a different company, but generally, they are made of 4 major stages.
The sales pipeline consists of 4 key stages:
- Sales prospecting: In this stage, you search for new potential clients. Outbound prospecting includes cold outreach and inbound prospecting, which involves outreach to individuals and businesses who have already expressed their interest in you.
- Lead generation: The part of your sales pipeline that tracks all the activities done to find and qualify leads as prospects.
- Lead nurturing: This part of your sales pipeline that tracks all the stages and activities that nurture your prospects. Lead nurturing is key in turning your leads into sales opportunities, which makes them much more likely to convert.
- Deal closing: The last part of your sales pipeline where you send out a contract to your future client and close the deal.
Why do you need a sales pipeline?
A sales pipeline is crucial because it:
- organizes leads and clients based on a specific criteria,
- prevents mishaps like losing track or duplicating efforts,
- consolidates all the lead information in one place,
- shows you exactly at what sales stage every lead is,
- maximizes the chances of closing deals,
- boosts communication between sales and marketing departments,
- minimizes delays and bottlenecks,
- accurately forecasts revenue.
The sales pipeline enhances communication and boosts conversion rates by recording your preferences and contact methods.
It also identifies potential bottlenecks, minimizing the chances of deals falling through the cracks due to delays.
Ultimately, a healthy sales pipeline keeps your sales deals moving.
What’s more, a sales pipeline allows you to forecast future revenue accurately through data-driven estimates.
As a result, this hugely improves the amount of closed deals the business makes and leads to revenue growth.
How do you know if your sales pipeline is healthy?
Your sales pipeline is healthy if it has any of these signs:
- Balanced distribution: Prospects are evenly spread across different stages of the pipeline, ensuring a consistent flow of deals in progress.
- High conversion rates: A significant percentage of leads advance from one stage to the next, indicating effective nurturing and engagement strategies.
- Accurate forecasting: Sales forecasts align closely with actual outcomes, reflecting realistic assessments of the pipeline.
- Short sales cycle: Deals move efficiently through the pipeline with minimal delays, indicating streamlined processes and effective sales tactics.
- Regular influx of leads: New, qualified leads enter the pipeline consistently, maintaining a steady stream of potential deals.
- Low drop-off rates: Few leads exit the pipeline without converting, suggesting effective follow-up and retention strategies.
Pipeline generation is also crucial for a healthy sales pipeline that’s full of leads.
Think of a pipeline generation procedure as a constant management duty where you monitor a continuous flow of leads.
Pipeline generation also indicates the value of new opportunities generated within your selected time period.
Sales funnel vs Sales pipeline: What’s the difference?
A sales pipeline is a visual representation of the process that sales teams use to turn a lead into a customer.
A sales funnel is a representation of the buying journey from the perspective of the customer.
Sales funnel stages include:
- awareness,
- interest,
- consideration,
- intent,
- purchase,
- loyalty.
The sales pipeline is focused on a sales rep, while the sales funnel is focused on a prospect.
Sales pipeline vs Sales process: What’s the difference?
A sales pipeline is the visual representation of your overall sales process, which consists of various stages.
The sales process is a structured series of steps or actions sales teams follow to convert prospects into customers.
The sales process focuses on the specific activities and tactics involved at each stage.
The sales pipeline represents the business sales process in a way that keeps the sales process optimized, efficient, and profitable.
How do you create a sales pipeline?
- Outline your sales process: Clearly define each step involved in converting a lead into a customer. For example, your process might start with lead capture, followed by lead nurturing, then proposal delivery, and finally, closing the sale.
- Determine key pipeline stages: Break down your process into distinct stages such as Cold Outreach, Lead Generation, Lead Qualification, Meeting Setup, Proposal Sent, and Negotiation. For instance, classify “Lead Qualification” as the stage for assessing a lead’s potential. These stages vary from business to business.
- Identify stage-specific activities: Assign specific tasks and milestones to each stage. For example, in the Lead Qualification stage, activities could include initial contact via email and identifying decision-makers, with the goal being a scheduled call.
- Track your leads: There’s no healthy sales pipeline without lead tracking. Keeping a close eye on every stage of your leads in the sales pipeline is absolutely necessary to make sure your efforts turn into profit.
- Use CRM: CRM software helps to organize your pipeline visually. Input stages and tasks into the CRM to automate tracking and follow-ups rather than relying on static spreadsheets.
- Set up your pipeline reporting: Within the CRM, configure reports to monitor performance at each stage. For example, track metrics like ‘Number of Meetings Set’ from initial outreach.
- Iterate your process: Regularly analyze pipeline data to make improvements. Test variations, such as using different outreach scripts, and monitor which strategies result in a higher conversion rate from “Proposal Sent” to “Closing.”
The 6 best sales pipeline tools to start using in 2025
The best sales pipeline tools are CRM tools that focus on:
- creating visual pipelines,
- generating sales reporting,
- running sales pipeline automation.
The best sales CRM tools for pipeline creation and management are:
- Salesforce CRM: Excellent for large business and big teams
- Pipedrive: Features sales pipeline feature that’s very easy to use
- Zoho CRM: the best sales pipeline tool for smaller teams and startups
- HubSpot CRM: an all-rounder CRM with good sales pipeline tools
- Zendesk Sell: Excellent sales pipeline tool for teams that require more advanced customer support features
- lemlist: It’s not a CRM but an excellent sales engagement platform that makes sure your sales pipeline is full of high-quality leads that are ready to convert. Plus, its automation at scale and personalization features are the best in the market.
Key takeaways
A sales pipeline is a system used to manage leads throughout the sales process. It visually represents each prospect’s stage and helps to identify and address any issues that could delay deals.
By organizing and consolidating lead information, sales pipelines:
- enhance communication,
- reduce errors,
- improve conversion rates.
Sales pipeline allows businesses to forecast future revenue more accurately, fostering growth.
A well-functioning sales pipeline should have balanced lead distribution across all stages, high conversion rates, and minimal delays or drop-offs.
It’s a tool for optimizing the sales process, distinct from a sales funnel, which models the buyer’s journey.
To create a sales pipeline, outline your sales process, define key stages, detail stage-specific activities, and track leads using CRM software.
Regular analysis and iteration improve effectiveness, and we recommend sales pipeline tools like Salesforce CRM, Pipedrive, and HubSpot CRM, among others.
