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I’ve built several sales pipelines from scratch over the years. They should be fairly straight forward to assemble, especially, for many SaaS companies today. But there are a few key elements that should be remembered when building a pipeline (“sales structure”) as well as refining a pipeline — the stages of a sale.

Purpose of the Pipeline

To start, a sales pipeline serves three primary purposes:

  • Provides a measurable means of all expected sales opportunities.
  • Enables a sales team to follow the appropriate activities to help guide buyers through a sales cycle.
  • Provides a repeatable process to understand the engagement and status of a sales opportunity.

Typical Sales Pipeline

  • Qualified. This first stage typically follows some prospecting activities (marketing, sales development outreach, other) where initial contact with a prospect signals a qualified opportunity. “Qualified” here includes the right signals for continued sales activity such as the right tech stack, target company size, etc.
  • Discovery. The second stage of a typical SaaS sales cycle includes a deeper dive into the pain points of the prospect and how the product or service being sold can meet the goals of the prospect.
  • Evaluation. This stage can vary a good bit depending on product/ service, size of the sale, etc. Here, a prospect may need to involve more stakeholders in the buying process. This stage may also include a demo, trial, or proof of concept period.
  • Proposal. For many companies, this stage represents an 80% chance of closing (win). Here, the buyer knows the cost(s) and terms of the solution. The buyer understands timing and implementation. It’s here where a seller may send a formal proposal or simply a payment link.
  • Close. The penultimate stage of the sales cycle which would include both Close Won and Close Lost deals. Some companies may mark this stage when there is first receipt of a signed proposal or payment.

What to Watch Out For

  • Building the sales stages in silo — without the input of the team.
  • Building the sales stages without considering the buying process of prospects. Bottom line: prospects determine a lot about the speed and constituents involved to make a purchase.
  • The sales stages should be activity driven on both the sales and buyer sides. The progression into a sales stage (and exit) should be based on the activities involved.
  • Sales stages should be not be overly complicated or sales members will not update the pipeline, and thus, will not yield the insights to assess performance. Of course, too simplistic and the pipeline fails to identify areas for improvement or insight.