What is a sales pipeline and why is it important to have one?

Understanding the concept of a sales pipeline can significantly impact your business's ability to generate consistent revenue, keep track of potential clients, and ultimately achieve sustainable growth. 

In this article, we’ll break down everything you need to know about sales pipelines, including how they work, why they’re important, and how to create, manage, and maintain them effectively.  

What is a sales pipeline? 

A sales pipeline is a visual representation of your sales process, showing where potential clients (or ‘leads’) are in their journey towards becoming paying customers. Picture it as a roadmap that outlines each step your sales team needs to take, from the initial point of contact to closing a deal. 

In practical terms, a sales pipeline helps businesses track and manage leads, monitor the progress of deals, and prioritise sales activities based on the lead’s position in the pipeline.

It breaks down the sales process into distinct stages, giving sales professionals a clear picture of how many opportunities they have, where each opportunity stands, and what actions are required to move a prospect closer to making a purchase. 

A typical sales pipeline is segmented into the following stages: 

1. Lead generation: Identifying potential clients or sources of business.
2. Lead qualification: Assessing if the lead is a good fit for your service.
3. Proposal/quote: Providing a customised solution to meet the prospect’s needs.
4. Negotiation: Discussing terms, pricing, and handling any objections.
5. Closing: Securing the agreement and finalising the deal.
6. Post-sale: Onboarding, follow-ups, and ensuring satisfaction. 

This structure is flexible, meaning you can adjust the stages to suit your business type and industry.

If you’re a financial adviser looking to manage clients to build a strong customer base, a well-defined pipeline can serve as a blueprint for your sales strategy.

Learn more: how to improve your business sales pitch 

Why are sales pipelines important? 

Sales pipelines are essential for any business that wants to stay organised, improve forecasting, and ultimately increase sales.

Here’s why a well-managed pipeline is so valuable: 

1. Improved sales forecasting: A pipeline allows you to predict future revenue by showing you how many leads you have, where they are in the sales process, and their likelihood of converting. This insight helps you plan more effectively and allocate resources wisely.
2. Better organisation: By categorising prospects into stages, a pipeline ensures no opportunity is overlooked. This structured approach means you’re less likely to lose track of leads or miss follow-up opportunities.
3. Increased efficiency: With a clear understanding of where each lead stands, you can prioritise high-probability deals and focus your efforts where they matter most.
4. Enhanced team performance: Sales pipelines provide transparency and accountability, making it easier for managers to assess performance, spot bottlenecks, and coach team members.
5. Consistent customer experience: A pipeline helps ensure that every lead receives the same level of attention and quality of service, contributing to a more consistent and professional customer journey. 

How do you create a sales pipeline? 

Creating a sales pipeline involves defining stages, setting up processes, and choosing the right tools.

Here’s a step-by-step guide to building a pipeline that works: 

1. Define your sales stages: Start by mapping out the typical stages a client goes through in your sales process. For financial advisers, this might include stages like initial contact, needs assessment, proposal, and final review.
2. Identify key actions for each stage: Outline specific actions required to move a prospect from one stage to the next. For example, in the qualification stage, you might schedule an initial consultation or request financial documents.
3. Set up a CRM system: Use CRM software to track your pipeline digitally. Unbiased’s account dashboard allows you to receive all your customer enquiries, manage your client pipeline through to conversion, view key metrics and measure your return on investment.
4. Assign responsibilities: Make sure each stage has a dedicated owner. This could be a sales manager, adviser, or account executive depending on your team structure.
5. Populate your pipeline: Add existing leads to the appropriate stages and start tracking their progress.
6. Review and optimise: Regularly review the pipeline’s performance. Are leads getting stuck at certain stages? Are you losing deals during negotiations? Use these insights to refine your approach. 

How do you measure the quality of your sales pipeline? 

Monitoring the health of your sales pipeline is crucial. Here are some metrics to consider: 

1. Conversion rate per stage: This measures the percentage of leads that move from one stage to the next. A low conversion rate might indicate problems with lead qualification or sales tactics.
2. Average deal size: Track the average value of closed deals. If deal sizes are shrinking, it might be a sign that you’re targeting less profitable clients.
3. Pipeline velocity: Calculate how quickly leads move through the pipeline. If the process is too slow, it could indicate inefficiencies or a lack of urgency. 
4. Win rate: The percentage of leads that become paying clients. A low win rate may suggest poor lead quality or a need for improved closing techniques.
5. Sales cycle length: Measure the average time it takes to close a deal. A longer sales cycle may suggest bottlenecks or overly complex processes. 

How can you improve your sales pipeline? 

To enhance your sales pipeline, focus on optimising each stage for better results: 

1. Refine lead qualification: Ensure you’re only focusing on high-quality leads that match your ideal client profile.
2. Automate routine tasks: Use CRM tools to automate follow-ups, meeting scheduling, and lead scoring. This reduces manual work and speeds up the process.
3. Provide targeted training: Train your sales team on best practices for each stage, such as how to handle objections or close deals more effectively.
4. Enhance marketing-sales alignment: Ensure that your marketing efforts are generating qualified leads that fit your sales criteria. This can significantly reduce time wasted on unproductive leads.
5. Regular pipeline reviews: Conduct regular pipeline reviews to identify areas of improvement and adjust strategies accordingly. 

How do you maintain an effective sales pipeline?

Keeping your pipeline in good shape requires ongoing attention. Here’s how to maintain it effectively: 

1. Regularly update lead information: Make sure all contact information, meeting notes, and deal statuses are up to date.
2. Purge inactive leads: Periodically remove leads that have gone cold or show no signs of progressing. This keeps your pipeline lean and focused.
3. Monitor key metrics: Keep an eye on conversion rates, sales cycle length, and win rates to spot any negative trends early.
4. Conduct consistent follow-ups: Regular follow-ups ensure that leads don’t get neglected, especially in the middle stages of the pipeline. 

Sales pipeline vs sales funnel: what's the difference? 

Although the terms "sales pipeline" and "sales funnel" are often used interchangeably, they represent different concepts: 

• Sales pipeline: Focuses on the steps and stages a sales team goes through to convert a lead into a paying customer. It’s a tool for managing sales activities and forecasting revenue.
• Sales funnel: Represents the buyer’s journey from their perspective, highlighting the various stages of engagement and interest. It’s useful for understanding how prospects move from awareness to decision. 

In essence, the sales pipeline is a seller’s view of the process, while the sales funnel is a buyer-centric model. Both are valuable, but they serve different purposes. 

Want to work with Unbiased? 

For financial advisers, mortgage brokers and accountants, a well-defined sales pipeline is critical to managing client relationships and growing your practice.

It helps you track prospects, measure engagement, and ensure that no potential client slips through the cracks. By using a structured approach, you can provide a consistent and professional experience, ultimately building trust and securing long-term business. 

A strong sales pipeline also allows you to identify which services resonate most with different client segments, enabling you to tailor your offering more effectively. In a highly regulated and trust-driven industry like financial advice, this clarity and structure can set you apart from competitors. 

Unbiased Pro offers you the tools needed to effectively manage your sales pipeline and client database.