Although the specifics of the stages will change from business to business, the general stages of a sale pipeline stay the same.
That said, the pipeline stages include the following:
- Prospecting
- Qualifying
- Demonstrations or meetings
- Proposal
- Negotiation
- Win/Loss analysis
- Post-purchase activities
Let’s look at each of these stages closely!
1. Prospecting
The first sales pipeline stage is prospecting.
During the prospecting stage, your team aims to find potential buyers who need what you sell.
Every business prospects a little differently because there are several strategies.
For instance, some ways your company can find potential customers include:
- Having a lead generation team find people in your target audience
- Marketing campaigns (email, ads, social media, etc.)
- Social media engagement
- Email marketing strategies
A sales CRM (customer relationship management) system is another excellent tool for prospecting.
CRM tools can automatically find leads for your sales team, giving them more time to focus on building relationships and closing sales!
2. Lead Qualification
The second stage in the sales pipeline is lead qualification.
At the lead qualification stage, your team’s primary focus is to generate leads.
The objective is to evaluate these leads to identify those with a genuine interest and ability to purchase your product or service.
For instance, this qualification process involves understanding the following aspects of each lead:
- Needs
- Budget
- Decision-making authority
- Timeline within which they intend to make a purchase
Understanding and considering the following aspects is often called the BANT (Budget, Authority, Need, Timeline) framework.
Leads that meet your qualification criteria are considered ‘sales-qualified’ and move forward in the pipeline.
On the contrary, those that don’t match up are either discarded or nurtured for potential future opportunities.
A structured lead qualification process significantly improves your sales efficiency by ensuring your team focuses on the prospects with the highest conversion potential.
3. Demo or Meeting
After generating leads and qualifying each, it’s time for one-on-one meetings or demonstrations.
Depending on your industry and target audience, this stage may not apply to your business.
Still, some qualified leads prefer to learn more about the products or services they want to purchase.
Demonstrations and one-on-one meetings are the perfect opportunity to show your potential customers precisely what your company does!
During this stage, it’s essential sales reps aren’t too pushy, as this can drive people away.
Instead, focus on connecting with the person individually and pointing out how your products or services will solve an everyday problem.
4. Proposal
The proposal stage often follows a meeting or demonstration.
At this point, your sales team estimates the cost and other details related to the product or service you’re offering.
A proposal should include important information like:
- Payment terms
- Delivery schedules
- Any additional materials that are necessary for installation or usage
A well-defined sales pipeline lets your team use previous proposal templates for each sale.
That way, sales efforts aren’t wasted on creating a new document whenever you must send a proposal.
Your initial proposal should contain transparent pricing and deliverables so customers aren’t left questioning certain aspects of what they’re buying.
5. Negotiation or Commitment
The next sales pipeline stage is negotiation or commitment; this depends on how your prospective customer handles the proposal you send.
For instance, some potential customers wish to negotiate certain things in their proposals.
Of course, whether your team accepts negotiations is entirely up to you.
While it can be beneficial to meet customers halfway, you also don’t want to undersell your products or services.
In other cases, a potential customer will immediately commit to purchasing your product or service!
Whatever happens during these pipeline stages, tracking what happens for future reference is vital.
6. Opportunity Won/Lost
The opportunity won/lost stage is essential for your sales manager to understand the effectiveness of their team.
At this point, you’ll know whether or not a sale was successful and which pipeline stages may need improvement.
By noting which leads were won or lost and why, your team can recognize areas to focus on to make more sales.
For instance, if a high volume of lost leads comes at the negotiation stage, it may be worth revisiting your offer and how much you charge for each product or service.
This step helps you understand which pipeline stages are working well and which ones need tweaking to move forward.
7. Post Purchase
If you thought the sales stages end after you secure a sale, you’re about to learn how valuable post-purchase activities are!
Following up with the individual after a sales rep closes a deal is critical.
You want to learn about their satisfaction with their purchase or if they encountered any issues.
If you ghost a paying customer, it leads to fewer customer referrals and repeat purchases.
Instead, you should focus on learning as much about how the person enjoyed the sales process.
An easy way to do this is to send follow-up surveys. That way, paying customers can fill them out on their own time.
Building customer loyalty after a purchase is also important.
Here are a few ways to do so:
- Send a post-purchase coupon for their next order
- Send offers and discounts for repeat customers
- Offer personalized customer service
- Send promotional emails
By doing this, your customers will be more likely to recommend your company and become long-term supporters!
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