Sales Pipeline Management: Guide for SMBs

A sales pipeline is a visual depiction of your sales process. It tracks the progress of each prospect throughout their buyer’s journey, from first contact all the way to deal closure. Consider it a roadmap of exactly where each opportunity is in the buying process and what’s needed to move them to the next stage.

The difference between a pipeline and a sales funnel is one of perspective. A funnel represents a narrowing of prospective buyers from top to bottom as they move from awareness to purchase, as seen from the buyer’s journey. A pipeline, in contrast, is more structured, as seen from the seller’s perspective. The buyer is guided from one stage to the next as the sales team executes on a defined set of activities to advance prospects through the sales process.

According to research from Vantage Point Performance, in partnership with the Sales Management Association, companies that define a formal sales process are 18 percent more likely to enjoy higher revenue growth than those that don’t. Visibility is critical to growth. Without it, you can’t accurately forecast revenue or prioritize resources, potentially delaying the detection of bottlenecks before they become critical problems.

Building a Pipeline

Every sales process is unique, but successful pipelines contain 5 to 7 well-defined stages that represent each step in the typical buyer’s journey at your company. The stages might include:

• Prospecting / Lead Generation – Identifying new potential customers through outbound outreach, website visits, or referrals
• Lead Qualification – Determining whether leads are a good fit for your ideal customer profile and have the budget, authority, need, and timeline to buy
• Discovery / Needs Assessment – Conducting conversations to learn more about their specific challenges and build a rapport
• Proposal / Solution Presentation – Presenting a custom solution with clear value aligned to their needs and objections
• Negotiation – Working through pricing, final objections, and terms
• Close – Signing contracts and planning for implementation
• Post-Sale – Focusing on customer success and identifying cross- or upsell opportunities

Success with any of these pipeline stages requires defining what actually qualifies a prospect to move from one to the next. In other words, what specific criteria, activities, and buyer behaviors must occur before a prospect advances to the next stage?

Critical Practices

There are several fundamental practices that distinguish top-performing sales organizations from those that struggle with pipeline management:

Data integrity is the foundation of any effective pipeline. Regular maintenance activities like verifying contact details, deduplicating, and ensuring job titles and information are up to date should be completed monthly or quarterly at minimum. Leading sales organizations use tools that automatically verify contact data against external sources such as company websites to surface errors before they impact your team.

Qualifying leads is important, as their quality in your pipeline has a direct correlation with conversion rates and the accuracy of your revenue forecast. You should never automatically place every incoming lead in your pipeline. Instead, invest time up front to define clear qualification criteria that reflect your ideal customer profile. Use lead scoring to rate opportunities by fit and intent and direct team effort to the deals with the highest propensity to convert. Pipeline bloat is a big source of frustration for sales leaders and a contributing factor to lost revenue. When your pipeline is bloated, your sales reps waste time and energy on leads that are a poor fit.

Pipeline reviews are another basic discipline that has a direct impact on results. Regular reviews on an individual level create accountability and surface potential issues early. Sales reps should be reviewing their pipeline every day to make sure deal stages are up to date and to decide which outreach to prioritize for the day. On a team level, pipeline reviews should be conducted by sales managers at a minimum once a week to assess deal health and overall coverage. Monthly or quarterly, deeper analysis is necessary to review win-loss results, look for commonalities in what moves deals forward or stalls them, and decide if your stages still map to the customer buying journey as it evolves.

Follow-up discipline can also separate top performers from those that struggle with pipeline management. Insights from RAIN Group Center for Sales Research show that the average B2B sale requires eight touchpoints before securing an initial meeting. However, the same research shows that many reps give up too early. Don’t rely on memory or a random collection of emails. Instead, use your CRM system to create repeatable cadences and automated reminders and scheduling. Track every call, email, meeting, etc. in one place so nothing falls through the cracks.

Sales and marketing alignment is critical to amplify the effectiveness of your pipeline. The right content at the right stage can significantly influence a prospect’s decision-making process. However, according to insights from DemandGen Report’s 2023 Content Preferences Survey, 54 percent of respondents said they are overwhelmed with content, but the research indicates the quality is far too often lacking. That’s why alignment is critical. Teams that co-create content based on real prospect questions and objections, then make that content readily accessible at each stage of the pipeline keep prospects moving forward rather than stalling in frustration.

Automation

Your CRM system should be the foundation of your pipeline management strategy. There are many basic functions you should set up to automate that most CRMs can support, including:

• Lead scoring and qualification based on internal criteria
• Data entry rules to streamline common tasks
• Automated follow-up reminders and scheduling
• Automated task creation

Forecasting is another area that is frequently managed directly in CRMs today with tools that allow for complex forecasting that takes into account deal size, probability, historical conversion patterns, and overall engagement levels of the buying team. You can also set up alerts for various milestones, like a deal has been stagnant for a certain amount of time or follow-ups have been missed, to ensure nothing falls through the cracks.

Common Challenges 

Pipeline issues are usually revealed through patterns. The following are common pain points you may encounter along the way and some suggestions for how to overcome them:

• Deals consistently stuck in one stage – Investigate why deals are stalling in the same stage for an extended period of time. Is it because the next steps aren’t clear? Buyer hesitation? Is there a competing priority? Once you identify the problem, you can address the underlying issue(s) before it happens again through better discovery conversations, clearer value propositions, or adjusted expectations about timelines.
• Pipeline is out of balance – Meaning some stages have a ton of deals while others are barren. This typically points to a prospecting problem. If you have fewer than ideal early-stage opportunities, your activities must increase immediately. An empty pipeline today is lost revenue tomorrow.
• Data quality issues – Whether stale contact information, duplicate records, or inaccurate information. Data quality is a known issue for most sales teams, but the consequences of inaction are real. Your reps won’t be able to make a good first impression, and outreach efforts will be wasted. Schedule regular data maintenance and hold people accountable for keeping information up to date.

Measuring What Matters

There are several critical metrics you should be tracking that will reveal both the efficiency and effectiveness of your sales motion:

• Pipeline coverage – The current value of your pipeline in comparison to your quota. A healthy pipeline is 3-5x your sales target
• Conversion rates by stage – Can identify where deals move smoothly and where issues start
• Average sales cycle – The length of time prospects remain in your pipeline
• Deal size and volume – Monitor both the quantity and quality of your opportunities
• Stage duration – The amount of time deals spend in a particular stage
• Win-loss analysis – Reviewing deals to understand what moves deals forward and what causes them to fall apart

A good sales pipeline is the result of a continuous process of testing, learning, and optimizing to discover what works best for your organization.