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How to build a 4-phase sales pipeline in 5 steps

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13 min read

On the surface, selling seems pretty straightforward. 

You fill your potential buyer in on what you have to offer, and they pick the solution that best meets their needs—it’s just one simple decision that takes someone from “prospect” to “buyer.” 

But when you start to dig deeper, you’ll find the sales process is actually much, much more involved. Although it seems like a relatively simple process, deciding whether or not to buy (and what to buy) involves a lot of education and decision making. Potential buyers need the right information at the right time—and the right amount of nudging to eventually cross the threshold into becoming a buyer. 

If you have just one prospect, knowing what information your prospect has already absorbed or what their needs are can be pretty easy to keep an eye on. But you’ll (hopefully) never have just one potential customer. If you’re trying to manage the needs, questions, and expectations of dozens (or even hundreds or thousands) of customers, doing this manually will be  challenging—and you’ll likely end up missing a few important touchpoints. 

To effectively manage all potential customers’ sales processes, you need a “sales pipeline.” But what is a sales pipeline and why is it important? Keep reading to find out: 

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What is a “sales pipeline”? Why is it important? 

Your sales pipeline tells you where all your prospects are on their individual sales journeys, either on a company-wide level or individually for each salesperson. It presents an organized way of looking at how every prospect is moving through the different stages of the sales process

On the most basic level, a sales pipeline lets you get a quick glimpse at who might purchase from you and how close they are to actually buying. But sales pipelines also give sales managers the data they need to improve their sales processes. 

Here are just a few of the ways an organized sales pipeline can help you improve sales: 

  • Discover holes in your sales process. Are prospects consistently disappearing from the sales process around the same stage? This might be a sign that you have a hole in your process. Identifying these patterns can let you figure out what you’re doing wrong so you can implement the right changes to keep prospects in your funnel.
  • Identify sales team members who might be struggling. Because you can break down sales pipelines to an individual level, you can compare the performance of different members on your sales team. Finding members who might be underperforming can help you get them the training, coaching, or assistance they need to excel at their job.
  • Forecast future business results. Meet sales goals by measuring and analyzing the number of prospects in your pipeline and the potential value of each deal. You can use historical data and analytics to project how many prospects you’ll need at each phase of the sales process to eventually meet your sales goals.
  • Test new sales strategies. Comparing your sales pipeline while switching up sales strategies can allow you to see what is working and what isn’t. Your sales pipeline gives you the data you need to determine which sales strategies work best for your business and resonate most with potential buyers. 

What are the stages of a sales pipeline? 

Stages of sales pipelines can look different from company to company. Some find that their customers go through more steps, while others like to keep their pipelines short and simple. 

The length that is right for you depends on what you’re selling. If a lot of communication and contact is involved, your pipeline will probably need a few more stages. The size and commitment of the purchase will also influence how a customer makes the decision to buy. After all, you wouldn’t put the same thought into buying a candy bar as you would purchasing a home. 

But regardless of your offering, there are a few key stages of the sales pipeline you’ll want to include: 

  1. Prospecting 
  2. Qualification 
  3. Proposal 
  4. Closing

sales pipeline stages

1. Prospecting 

It doesn’t matter how great your sales process is if you don’t have any prospects. That’s why the first stage of any sales pipeline is to fill it up. 

At the prospecting phase, you need to figure out who you should be connecting with and how you can find them and bring them into your pipeline. 

Create your customer persona 

Before you can find any prospects, you need to know who you’re targeting. Who would benefit from what you have to offer? What type of clients do you want to work with? 

Creating a customer or user persona helps you break down your target audience to identify key demographics including where they’re located and what their budget is. If you’re in B2B sales, it might include things like a job title and company size. In B2C, your customer persona might have detailed information about their household income/budget or family life, such as if they have kids. 

To create your customer persona, take a look at the demographics of your current audience. Who are your best customers and what key factors do they have in common? 

Get your prospects’ attention

Now that you know who you want to target, you need to get in touch with them. You need to attract their attention and get them to give you their contact information so you can add them to your sales funnel. 

This is where your traditional lead generation tactics will need to come in. Using different lead generation strategies can help you collect a large group of prospects, so don’t limit yourself—but you still need to be strategic. Using information from your customer persona, think about where your prospects are most likely to spend their time online. 

What social platforms do they use? What premium content might they sign up for? What kind of questions might they ask? 

You can use an outbound service like RingCentral’s Outbound Contact Center to get in touch with leads and determine if they might make good prospects:

Cast your net for leads wide. The next phase of the funnel is where you’ll start to identify which leads to move forward with. 

2. Qualification

In the prospecting phase, you’re just trying to get some leads into your funnel. But even with a customer persona and strategic lead generation, some of those leads aren’t going to be the right fit for your company. 

At the qualification phase, you need to identify which leads have the most potential to become customers and which you can toss out. 

Get to know your leads

Chances are, you haven’t collected enough information about your leads yet to know if they’re solid prospects. However, you can use the information you have to get to know more about them. 

Try researching your leads online, looking at their social profiles, company pages, or even review profiles to determine if they’re right for your business. If you can’t find much about them, you can always reach out to set up a qualification call. 

A quick conversation about the leads’ challenges, needs, and even preparedness to buy can help you determine if they might be a fit for your company. 

Give prospects what they need 

The qualification phase is more than just identifying which leads can become prospects. You also need to educate them to be ready to make a purchase. 

Depending on your business, this might involve multiple calls, demos, and meetings. Each time you talk to a prospect, you should be moving them closer and closer to finding a solution that solves their challenges. 

Prospects might stay in this phase for a while—and that’s okay. Keep checking in with them, providing them with high-quality content and trying to move them to the next phase. 

3. Proposal 

When a prospect is ready to buy, it’s time to present your proposal. This is a formal agreement about the exchange of products or goods and the amount the customer is going to pay. 

We often think of proposals as a B2B thing, but proposals are just as important in B2C—regardless of what you’re selling. 

Think for a moment about the big-ticket items someone might buy, like a house or a car. Before they buy, they’re going to want to see their paperwork. What are they paying for? What is the agreed-upon price? It’s common practice to lay everything out in writing before the deal is done. 

But proposals are important even for smaller transactions. Take, for example, the exchange you have when buying items at the grocery store. You present your groceries to the cashier, who rings them up and tells you what you owe. This is the proposal. 

Depending on your industry and the size of the purchase, the proposal process might take a few days (or even weeks). After all, buying software for your business isn’t quite the same as picking up a rotisserie chicken for dinner—but the basic structure of each transaction is the same. 

During this phase of the sales pipeline, it’s time to come to an agreement. You might need to negotiate, change your proposal around a bit, or you might even find that you’re not going to be able to make a deal. When you do finally agree (or decide to walk away), your customer will move to the last phase of the sales pipeline. 

4. Closing

This is the bottom phase of your sales pipeline. You’ve attracted your prospect, given them the information they need to qualify them as prospects, and agreed on a proposal. All that’s left to do is sign the deal. 

But the closing phase should be more than just getting a signature and running off to the next client. When the deal is done, this is your opportunity to find areas of improvement for your sales process and pipeline. 

  • Follow up. See how well the new purchase is working for your customer. Did it solve their challenges? Are they still struggling? Do they need any additional help? Check in to see if there is anything else you can do.
  • Offer onboarding or training. Is your customer using their new product or service to its maximum potential? Can you help them make the most of what they bought? Offering onboarding or training services can help customers remain happy with their purchase.
  • Ask for feedback. What support do customers wish they had during the purchasing process? What could you do better? Talking to customers who have been there before can give you insights you can’t get anywhere else. 


How to build a sales pipeline 

Now that you know why a sales pipeline is important and what the phases look like, how do you actually build one? 

Your sales pipeline will be unique to your sales process, your company, and what you’re selling. But here are a few steps to get the structure down. From there, you can refine and adjust your pipeline to meet your unique needs. 

1. Define your sales pipeline stages 

We just went through the four basic steps of a sales pipeline, but you might feel like they just don’t work for you. Maybe your qualification process is a bit longer, so you want to break it into a few different phases.

That’s okay. 

Now is the time to figure out what pipeline stages you think you’ll need. Combine phases, add new ones, or even toss one out completely—whatever works best for you. 

Don’t worry too much about getting these phases right. You can change them later on. 

2. Use the right tools 

Once your business has grown to a certain point, you just can’t manage your sales pipeline manually anymore. Without at least a little automated help, keeping a pulse on all of your leads and prospects is just too much to handle. 

Before you get started building your pipeline, identify the sales apps you’re going to use to make managing it possible. 

Most people would recommend a CRM, and while a CRM gets the job done, it’s just one piece of the puzzle. A CRM is a great way to keep tabs on all your leads and prospects and where they’re at in the buying journey, but properly managing your full sales pipeline requires a bit more power. 

A communications platform—particularly one that integrates with your CRM (like RingCentral)—allows you to not only organize your customer information, but also get in touch with them when the time is right. Having an easy way to follow up with leads and prospects through video conferencing, traditional phone calls, or even messaging can go a long way in helping you keep your pipeline healthy. 

For example, if you’re using Zoho as a CRM, you’re probably already used to logging meetings and conversations. But without a communication tool for support, you’re switching between your computer and phone or a video conferencing software. This back and forth is not only annoying and time consuming, but it puts you at risk of forgetting something important. 

When you integrate Zoho with RingCentral, you can schedule and start online meetings without leaving the Zoho app. When you no longer need to fumble to find the right tab, try to remember the password to another account, or remember where you even hosted the meeting in the first place, you’ll be more prepared and confident for customer conversations:

sales pipeline tool - zoho and ringcentral integration

3. Identify your trigger actions 

You’ve established your different phases of the pipeline—now it’s time to make sure they all connect. To make sure leads and prospects are actually moving through the pipeline, establish clear actions that take an individual to the next phase. 

For example, to move a lead from “prospecting” to “qualifying,” you’ll need to gather information about the potential customer that tells you they’re ready to dive deeper into your offerings. Maybe this is signing up for a webinar or clicking an ad in an email. Performing this action (whatever it may be) lets you know they’re ready for the next phase. 

Identify what these different actions may be at each phase—and you’re likely to have a few different behaviors for each step. Think about how leads and prospects behave. What questions do they ask at each step? What information do they need to know before they’re ready to move forward? 

Lay out a loose process. Remember, you want to use these trigger actions as a guideline—not as an excuse to put your customers in boxes. Everyone will behave differently, but identifying some patterns will make your job easier. 

4. Find the right size of your pipeline 

Not every prospect that enters your pipeline will become a customer. It’s unrealistic to think they will. But in order for your pipeline to work, you need to find your estimated conversion rate for each phase. 

While we’d all love to have a 100% conversion rate all the way through the pipeline, constantly setting unrealistic goals will just demoralize your team—and it doesn’t necessarily give you insights to improve your performance next time either. Instead, look at historical data to see how many leads become prospects and how many prospects ultimately buy. How long does it normally take a lead to move through the entire funnel? 

From there, you can work backward to see how many leads you need to attract to reach your sales quota or goals. 

Identifying these estimated conversion rates can also make it easy to see what new sales strategies are working and what aren’t. If you’re used to a 70% conversion rate and you’re seeing only 30% after implementing a new technique, you’ll know pretty quickly it’s time to switch back to the old way of doing things. 

5. Create a cleaning routine 

Keeping your pipeline clean is just like your house—if you let it go too long, suddenly you’re looking at hours worth of work. Creating a cleaning routine from the beginning keeps your pipeline functional and accurate. 

When a lead or prospect makes it clear they’re not going to buy, or even if they say they’re going to and then ghost, keeping them in your funnel only hurts your projections and can make you lazy about attracting new prospects. 

For example, let’s say you know you need to attract 50 new leads to get one deal. When you look at your pipeline, you have 45 leads at the top of your funnel, so you assume you just need to find five more. 

But what you don’t see is that those leads have been in your pipeline for months and never moved to the qualification phase. They’re just not interested in what you have to offer (at least not right now). 

In order to get that one new customer, you don’t need just five new leads—you really need 50. Without cleaning out those old leads, you’re self-sabotaging your company’s growth. 

Set up a periodic routine to review and eliminate leads and prospects who don’t seem like they’re going to convert. Establish rules that define when a lead should stay and when they should go, such as how long it’s been since they’ve gotten in touch. But don’t delete the contact completely—you never know when they might be interested again.

Make your sales pipeline work for you 

A sales pipeline is a great tool for moving sales processes along, but it’s only as strong as the information you put in. If you’re not doing the work to find the right leads, nurture the relationships you have, and make the most of the data your pipeline gives you, the pipeline can only help you so much. 

Periodically take a step back and look at your pipeline as a whole, but also at each individual phase. How is each step working? What areas can you improve? Are your conversation rates appropriate, or are prospects unexpectedly disappearing? Do you have the right tools in place to make connections to prospects easy? 

When you’re consistently revisiting your pipeline and identifying areas of improvement, you’ll close more deals and bring in the revenue to prove it. 

Originally published Jul 03, 2020, updated Dec 30, 2022

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