Sales Pipeline: What It Is and How It Works

Reading time8 minutes
Jaqueline Corradi
Jaqueline Corradi
Content Manager

Creating a personalized sales pipeline for your business can help you increase profitability. However, you need to understand what a sales pipeline is and how to make one based on your target audience's behavior and the actions that trigger them to purchase and become your clients.

What Is a Sales Pipeline?

The sales pipeline is an important sales management tool. It consists of identifying and categorizing the steps that take your target audience through the sales journey, from the awareness stage to deciding to complete a purchase, and the post-sales.

It's a strategic tool that allows you to understand your target audience better, and plan actions that convert them into loyal customers. Each pipeline stage has its particularities, when you know which ones compose your client's buyer journey and what leads them to buy something, it becomes easier to create effective strategies for all the stages.

The sales pipeline is like a map where you can see the customer path from when they become aware they have a demand to the moment they buy from your company. It's a visual representation that reveals important information about your potential customers and how to convince them to take the actions you wish.

With a well-developed sales pipeline, your marketing and sales team can analyze the sales process better, and identify the effective strategies and the ones that don't work. This way, you can increase your return on investment (ROI).

Many people think the sales funnel and sales pipeline are the same thing, but they aren't. The first one is a representation of the sales process as well but from the buyer's perspective. On the other hand, the sales pipeline concentrates on categorizing where each customer is in the pipeline stages and developing strategies to make them move to the next stage.

How Does a Sales Pipeline Work?

A sales pipeline works by mapping out the customer journey, when a lead is qualified until they make a purchase. First, you identify leads that are more likely to become your customers, then they enter the sales pipeline. It's up to your team to come up with strategies for each stage that drives the lead to the final decision: buying.

It's necessary to track their progress throughout the pipeline and identify the triggers that compel them to move forward. This is commonly done using CRM (customer relationship management) software, which can track customer data and define their pipeline stage based on the information you provide.

Once you have mapped your company sales pipeline, you need to follow each lead to understand if your actions are effective and what you and your team can do to improve results. The sales and marketing actions are planned considering each pipeline stage and its characteristics.

Why Is a Sales Pipeline Important?

Understand Your Target Audience Better

When you develop your company's sales pipeline, you have the opportunity to know your target audience more deeply. After all, you will need to study their behavior to be able to map out your company pipeline stages, and what motivates your prospects.

Create More Effective Strategies

A sales pipeline allows you to create strategies that work because you get to understand what leads your prospects to complete a purchase. Instead of testing out strategies and taking action based on guesses, you will analyze your lead's data, categorize them into pipeline stages, and identify what's effective in each case.

Get New Insights

You will get insights you never thought of when developing and implementing your company sales pipeline. It provides you with another perspective on how to look at and analyze your leads and customers.

Enhance Results

As a consequence, a successfully made sales pipeline can help you enhance several metrics. You can increase ROI, and improve your team's performance by providing them with the tools they need to create and implement the most effective plans.

Sales Pipeline Stages

Sales pipeline

Each sales pipeline is different since it must be created considering the characteristics of each company and its target audience. Therefore, the pipeline stages and the actions you should take at each one will differ.

However, it's possible to identify common stages, and what characterizes them. You can create your sales pipeline based on that, and personalize it according to your prospects' behavior.


Prospecting is the part where you look for potential customers. You focus your marketing strategies on finding leads that may be interested in your product or service. The way you will find, and attract them depends on who your target audience is, and the industry sector you are in.

Some strategies used in the prospecting stage are offering downloadable content, email marketing, and social media campaigns. The main purpose is to identify sales opportunities, and you will work on them in the next pipeline stages, to turn leads into customers.

Lead Qualification

After the prospect stage, it's time to qualify the leads you have. This means, analyzing their profile and identifying the ones who are more likely to buy your product or service. This process is essential because it helps your sales team to create a priority list.

By qualifying leads, your sales team knows who they should reach out to first, based on who is ready to make a purchase. You avoid losing opportunities, and increase the conversion rates, besides it saves time and money since your agents know where they must focus their efforts.


Once you have found the leads who are ready to close deals, it's time to reach out directly to them. You can do this by sending an email, a message through social media, calling, or an in-person meeting, for instance.

This is the moment when you will show your products or services benefits, and explain how it can solve your customer demand. That's why, it's essential to know your target audience very well, you need to understand their behavior to offer convincing reasons to make a purchase.

Building Relationships

Whether the person completes a purchase after the contacting stage or not, it's important to nurture the relationship with your qualified leads. Show you care about them, and emphasize you want to engage in a long-lasting relationship. Your focus shouldn't be only on making one sale, but on how to conquer a loyal customer.

Closing Deals

The closing deal stage can happen right after contacting your leads. This is the part where you make a proposal to your prospect and they decide to buy or not. Remember to emphasize your product or service benefits, how it can help your customer, and show the value of what you are selling.

How to Build a Sales Pipeline

Identify Who Your Target Audience Is

The first step to building a sales pipeline is knowing who your target audience is. You need to define who the public is with the demand for what you are offering and study their behavior. It's essential to know what prompts them to make a purchase.

Some actions you can take to identify your target audience are:

  • Analyze your customer base
  • Do market research
  • Analyze your competitors
  • Use Google Analytics to know your website visitors

Define the Stages of Your Sales Pipeline

Once you have your target audience profile, it's time to study their behavior and look for data that enable you to understand them better. Then, you need to identify what actions encourage them to move forward with a purchase.

With that, you can create the pipeline stages of your company, and define the strategies that are suitable for each stage.

Generate and Qualify Leads

You must create strategies to attract prospects, starting by generating leads, and finding the most likely to become customers. You can attract leads with the social media content you publish, blog posts, and advertisements, for example.

To qualify leads, you will need more information about them, which requires specific actions, such as offering downloadable content. For instance, you can prepare an e-book with exclusive content, and ask your leads to fill out a contact form to download it.

Your marketing and sales team will analyze the information gathered and qualify the leads, so the ones prompted to buy from you can be contacted immediately.

Analyze the Conversion Process at Each Stage

After you have established your company sales pipeline, it's important to analyze how the conversion process happens at each stage. This means identifying the triggers that compel your leads to advance and to buy from you.

As you identify what actions are effective and the ones that aren't, the sales process becomes more effective. You reduce the error risk and increase the conversion and sales rates.

Develop or Modify the Sales Strategies Based on the Sales Pipeline

Your company sales strategies must be created or changed according to your company sales pipeline. It's fundamental to develop different marketing strategies for each stage according to the triggers you have identified.

Keep Track of Your Sales Pipeline

After you have implemented the sales pipeline, make sure to keep track of its performance. The sales pipeline may change with time, for example, as your company grows and you expand your market reach.

If you follow through with each stage you will be able to identify behavior changes and keep up with them by finding strategies that don't work anymore and developing new ones.

Create Your Company Sales Pipeline

Now that you have learned what a sales pipeline is and how it works, enjoy this opportunity to enhance your company's performance. Create a personalized pipeline that suits your target audience, and search for customized solutions that will attract more leads, and increase conversion rates as well.

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