The Sales Pipeline Management Handbook

Managing a sales pipeline isn't easy.

There are many different (and constantly changing) roles, and each one has unique responsibilities.

In other words, if you want great salespeople, you can't just hire a few fast-talkers and call it a day.

But done right, it can give you more accurate forecasts and predictable revenue.

In this guide, you'll learn about:

  • How to define your pipeline stages
  • How to track—and improve—pipeline metrics
  • How to prioritize opportunities
  • And more!

Ready to take control of your pipeline? Download the free guide. 👉

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The Sales Pipeline Management Handbook

The Sales Pipeline Management Handbook

Learn about the most powerful tool that sales leaders are using to take a scientific approach to growing their businesses—and how you can use it too.


The birth of data-driven management...

In the 1960s, executives at American car companies like Ford and Chevrolet began to notice something startling: Toyota, long dismissed as an unworthy rival, began reducing their prices dramatically.

Chapter 01

From Toyota to Sales Teams Everywhere

At first, the executives dismissed the concern as a short-term anomaly. They had relationships with the best suppliers and at their scale, could negotiate cheaper prices than the Japanese manufacturers.

Yet quarter after quarter, Toyota lowered their prices and reported strong margins in their shareholder filings.

Everyone in the manufacturing industry wanted to know how a company that bought parts at the same or higher prices was able to produce a product at a dramatically lower price. Over the next few decades, the secret to Toyota’s success slowly leaked out of the company. The answer created a management philosophy—known today as ”lean manufacturing”—that helped Toyota become the largest car manufacturer in the world.

At the heart of lean manufacturing is a data-driven quality control process based on four principles:

  1. Detect the abnormality in the manufacturing process.
  2. Stop the process.
  3. Fix or correct the immediate condition.
  4. Investigate the root cause and install a countermeasure to keep the abnormality from happening again.

The process was originally developed by Toyota to manufacture cars faster, but other business functions quickly adopted the approach.

A new generation of sales managers began monitoring their sales processes with the same level of care as their counterparts in manufacturing, transforming the art of sales into a measured science.

Today, this process has become a valuable tool for sales managers, and goes by a different name: sales pipeline management.

With this powerful diagnostic tool at their fingertips, sales leaders are identifying inefficiencies in the selling process and implementing corrective measures to grow faster. This ebook will show you how you can, too.

Chapter 02

What is Sales Pipeline Management?

Sales pipeline management is a visual representation of where each deal is in your sales process.

More importantly, it’s the single most powerful tool that sales leaders have at their disposal to understand the buyer’s journey, diagnose what’s working (and what’s not), and accelerate the speed at which the organization closes deals.

By allowing sales leaders to measure the various stages of the sales process at a more granular level, pipelines reveal opportunities to improve conversion rates, grow revenue, and build longer-lasting relationships with customers:

pipeline stages as viewed in copper crm
A view of pipelines by stage in Copper
Chapter 03

Why You Need Defined Sales Pipeline Management Practices

If your organization is just getting started with formalized sales pipeline management, don’t sweat it—you should be able to catch up pretty quickly.

Research conducted by Jason Jordan and Robert Kelly for their article Companies With A Formal Sales Process Generate More Revenue revealed that 44% of executives think their organizations are ineffective at managing their sales pipelines.

After surveying 62 B2B companies, 76% of which had annual revenues greater than $250 million, their conclusion was clear:

“There is a direct correlation between effective pipeline management and strong revenue growth.”

Here are some of the key ways in which sales pipelines can help sales leaders.

1. Figure out what’s working—and what’s not.

Management thinker Peter Drucker, often referred to as the founder of modern business management, famously said, “If you can’t measure it, you can’t improve it.”

By breaking the sales process down into predefined pipeline stages, sales managers can more effectively measure a prospect’s progression through the sales funnel to identify and remove bottlenecks in the buying process.

For example, a sales manager might look at a pipeline and notice that deals for one of their sales reps, Ali, get stuck in the “Legal Review” stage of the pipeline for 30 days on average. Another sales rep, Tanya, typically moves deals the legal review stage in just seven days. This insight identifies an obvious coaching opportunity for the sales manager. Ali should be trained on the process Tanya is using to move deals though the legal review stage, thus shortening the length of his sales cycle.

2. Create accurate forecasts and predictable revenue.

Predicting revenue from quarter to quarter is one of the biggest challenges a sales manager faces. Without an accurate forecast, it's difficult to know how many people to hire or how much can be spent.

Inaccurate forecasts also hurt salespeople’s morale: a missed quota or forgone bonus can be disheartening and lead to employee churn. But with proper pipeline management, these mistakes—and many others—can be avoided.

When a sales process is broken into multiple stages, sales managers accumulate data based on historical performance that informs how likely a deal is to close. Close rates can be accurately forecasted based on criteria like the pipeline stage the deal is currently in, the size of the deal, and the age of the deal.

Yohanse Manzanaez, EVP of Sales at Epic Freight, implemented a CRM and created new pipeline stages to help his team put together more accurate forecasts. As a company that coordinates the logistics of moving large shipping containers from point A to point B, Epic Freight relies on developing and tracking relationships that are ongoing and expanding.

“We have a distinct sales cycle that we follow. Our pipeline helps us keep track of the probability of closing each deal.”
Yohanse Manzanaez, EVP of Sales, Epic Freight

Leveraging this knowledge allows Yohanse to create more accurate sales forecasts, and in turn allows the business to reap the benefits of predictable revenue.

Benefits of predictable revenue:

  1. Accurate pipeline forecasts help sales managers decide when to hire new reps. If hiring occurs too late, the business doesn’t have the sales capacity that it needs to hit its revenue targets. If hiring occurs too early, new reps don’t have enough pipeline to reach their quota.
  2. Predictable revenue helps businesses with budget allocation. It tells companies how much money is coming in the door and how much can be budgeted for expenses like marketing and payroll.
  3. Predictable revenue helps sales managers set appropriate sales quotas and performance plans. Quotas that are unattainable hurt morale and quotas that are too easy to hit come at a significant expense to the business when too many reps are hitting performance bonuses that were intended to be accessible to only true top performers. The more predictable your revenue, the more successful you’ll be in building your performance plans.

3. Grow revenue and customer lifetime value.

According to CSO Insights, a formalized sales process results in:

  • 53% increase in forecasted deals won
  • 65% increase in reps hitting their quota
  • 88% increase in companies hitting their booking targets

That’s huge. And sales pipeline management, facilitated by the use of a CRM, is at the center of any formalized sales process. Even beyond the initial sale, a CRM can help everyone in your organization better understand each customer’s unique experience with your company, which surfaces opportunities to expand and upsell existing accounts.

The result?

Revenue growth and increased customer lifetime value.

Chapter 04

How to Implement Your Sales Pipeline

Now that you have an understanding of what a sales pipeline is and how it can benefit your business, it’s time to start building your own sales pipeline.

First, define your sales pipeline management stages.

Your sales pipeline management stages should mirror your customer acquisition process and any sales funnel metrics that your company is already tracking. There’s no “correct” number of stages; every sales process in unique. You may need to track more than one sales pipeline if you have different business lines or sell multiple types of products or services. Likewise, if you sell products directly as well as through a reseller, you’ll likely want to track these sales through different pipelines with different pipeline stages to reflect the unique attributes of each sales process.

The complexity of your products also impacts your pipelines—generally speaking, complex products require longer sales cycles and more pipeline stages. If you need multiple pipelines and are defining pipeline stages for the first time, start by defining the pipeline stages for the product and channel you sell through most often.

Getting these stage definitions right is the first step in implementing effective sales pipeline management practices. Jordan and Kelly’s survey published in Harvard Business Review found that “there was an 18% difference in revenue growth between companies that defined a formal sales process and those that didn’t.” Defining that process begins with closely considering the activities that occur at each stage of the buyer’s journey.

Awareness > Interest > Decision

A typical buyer’s journey can be broken into three stages:

  1. Awareness - The buyer is familiar with your product or service.
  2. Interest - The buyer is actively considering your product or service.
  3. Decision - The buyer has all the information they need and is ready to make a buying decision.
  4. Action - The buyer pays for the product or service.
sales funnel stages

Consider these phases of the buying process as you look to define you sales pipeline stages. Look for clear, non-negotiable events that you can use to define entry and exit criteria for each stage of your pipeline. Also, be sure to define exactly what information sales reps are expected to capture at each stage of your pipeline.

Here are some common sales pipeline stage definitions to get you started.

  1. New prospect or lead - At a minimum, this is typically a person’s (or business’) name and some form of contact information. The person or business has not yet been contacted.
  2. Contacting - A prospect or lead you are actively trying to reach.
  3. Engaged - A sales rep has actually talked to the prospect or lead. The goal at this stage is typically further qualification of the lead.
  4. Meeting/Trial/Demo - At this point, pipeline stages tend to look different depending on your business. Maybe your prospect has signed up for a free trial of your product. Maybe you’ve conducted a product demo with them, or you’ve had some other sales-related meeting. In longer sales cycles, there may also be additional stages beyond this one to consider (like legal or compliance reviews).
  5. Proposal - A proposal has been sent to the buyer; the ball is now in their court to make a buying decision.
  6. Negotiations - They buyer has received the initial proposal and is in the process of negotiating the final terms of the deal.
  7. Closed won - You’ve made a successful sale!
  8. Closed lost - The buyer has chosen not to buy your product.
  9. Check back later - Often, buyers are genuinely interested in your product or service but the timing isn’t quite right for them. Make sure to have a stage for these opportunities, but don’t include them in your sales forecasts.

Here’s a look at the sales pipeline stages that Yohanse Manzanarez implemented for his team at Epic Freight. You’ll notice that the pipeline doesn’t end when the deal closes—the final stage is a celebration!

epic freight sales pipeline
Chapter 05

How to Grow and Create Predictable Revenue Using a Sales Pipeline

Ultimately, a sales pipeline is a tool that can help you sell more, grow customer lifetime value, and reap the benefits of predictable revenue. Let’s take a look at how you can best leverage your sales pipeline to grow.

1/ Track pipeline metrics for each individual salesperson.

While your business has a pipeline, each of your sales reps has a pipeline of their own as well. Pipelines at the rep level can be leveraged to help you better understand the performance of each of your salespeople.

Time spent on pipeline management at the rep level is shown to yield strong results—Jordan and Kelly’s survey found that “companies that spent at least three hours per month managing each rep’s sales pipeline saw 11% greater revenue growth than those that spent fewer than three hours per month.”

Here are three important criteria to consider as you assess the health of individual sales pipelines.

1. Make sure reps have enough pipeline to hit their quota.

Track average deal size and average win rates for each of your reps; doing so allows you to work backwards to figure out if your reps have enough pipeline to hit their quota. Check out this example:

Sales Rep Carla Martinez

  • Average deal size: $1,000
  • Average opportunity close rate: 25%
  • Monthly quota: $10,000

In order for Carla to hit her quota, she’ll need to make 10 sales ($1,000 average deal size X 10 = $10,000 quota). If you know that Carla closes 25% of the deals that reach the opportunity stage of her pipeline, she’ll need enough pipeline to ensure that 40 deals reach the opportunity stage (40 X 25% = 10 closed deals).

Pro-tip: According to InsideSales.com, top-performing sales organizations close 47% of sales qualified opportunities. Win rates tend to vary significantly based on industry and competition—we encourage you to look for benchmarking data specific to your industry.

2. Check to see if your reps’ pipelines are balanced.

If your reps have too many early-stage deals in their pipeline, it’ll likely be difficult for them to progress enough of their deals to hit their quota for a given period. In this case, encourage reps to prioritize their best deals and spend their time working those deals into the later stages of their pipeline.

On the other hand, if your rep has too many late-stage deals in their pipeline, they might be well positioned to hit their quota for the upcoming period, but are likely to have their pipeline dry up when those deals close. In this case, encourage your reps to double down on prospecting or other efforts to generate more early-stage opportunities—they’ll need that pipeline to hit their quota in subsequent months or quarters.

3. Consider how fast deals move through each of your reps’ pipelines.

By closely analyzing how deals move through each of your reps’ individual pipelines, you’ll quickly learn the sales skills that each of your reps are good at. Maybe one rep is great at making contact with prospects and setting up introductory calls, but their deals always get stuck in the legal review stage of the pipeline.

By measuring time spent in each pipeline stage, you can easily share data with the rep highlighting how their deals typically spend longer in the legal review stage than similar deals owned by other reps.

“It can be very instructive to compare what top performers know and do at each stage of the process, and what their relative success rates are,” says Bob Apollo, founder of Inflexion-Point Strategy Partners. “Armed with these insights into behavioral gaps, managers can coach underperforming reps with the goal of progressively narrowing the gap between the best and the rest.”

2/ Hold separate meetings for pipeline reviews and forecasting.

The relationship between sales pipeline management and sales forecasting is often confusing. “Many sales [teams] believe they are spending a lot of time managing their pipelines when in reality they’re spending a lot of time creating forecasts,” write Jordan and Kelly. “If your pipeline management discussions revolve around close dates, probabilities, and deal sizes, then you are forecasting. Period.”

Understanding the distinction between these two practices is important; your sales pipeline is key to ensuring accurate sales forecasts.

  • Pipeline management is more focused on earlier-stage, top-of-the-funnel opportunities
  • Forecasting is more focused on later-stage, bottom-of-the-funnel opportunities

The single best way to ensure more accurate sales forecasts is to be more stringent and rigorous about the opportunities that enter your pipeline and what’s required to move each opportunity to the next pipeline stage. For teams like Yohanse’s team at Epic Freight, the use of pipeline management tools significantly sped up the forecasting process.

“Because we were using our CRM to manage new prospects, new opportunities, and upcoming projects the team was already recording all of the key components in a forecast,” says Yohanse. “For example we’re recording the probability of closing, the expected date of closing, and the associated revenue value of each deal.”

While pipeline management allows for more accurate forecasting, the two topics are deserving of their own meetings. The process of reviewing the health of your sales pipeline should be separate from the process used to forecast sales—these activities should be tackled in separate, regularly scheduled meetings.

The Sales Pipeline Review Meeting

  • Attendees - All sales managers and sales reps.
  • Cadence - Typically, every two weeks at the beginning and middle of the month.
  • Meeting focus - These meetings should focus on both the quality and quantity of early stage opportunities in your pipeline. Sales managers should ask individual reps to summarize each deal and clearly define the actions or next steps they’ll take with each. This presents a great opportunity for sales managers to coach individual reps on sales qualification practices.

“The primary focus of a pipeline meeting should be to help reps develop a game plan to move deals forward.” - Jordan & Kelly, Harvard Business Review

The Sales Forecasting Meeting

  • Attendees - VP of Sales, sales managers, and sales reps.
  • Cadence - With faster-moving sales cycles, weekly meetings are recommended. For slower sales cycles, bi-weekly meetings are appropriate.
  • Meeting focus - Forecasts are time-bound, so forecasting meetings should focus on opportunities expected to close in a given month or quarter. These meetings should be group sessions and represent an opportunity to create friendly competition amongst your team. Save time at the end of each meeting to review deals that were previously forecasted to close but did not.

3/ Prioritize the best and worst opportunities in your pipeline.

While success in sales is closely correlated to sales activities and outreach, there are only 24 hours in each day. Learning which opportunities to invest your time in and which to cut loose can mean the difference between hitting or missing quota.

Evaluate deals in your sales pipeline using these criteria.

  1. Opportunity size - Big opportunities are glamorous and have the potential to deliver big revenue gains. While that’s the case, larger deals often move through the sales process more slowly than their smaller counterparts. Any deals that are 2x or 3x larger than your average deal size are often anomalies—inspect them carefully.
  2. Opportunity age - Old deals are less likely to close. Look for any deal that’s been stuck in its current stage for longer than your average sales cycle. Flag these deals or remove them from your pipeline altogether. Likewise, if the close date for a deal keeps slipping, flag it.
  3. Lead source - Look at win rates for deals based on the lead source. It’s common that deals from different sources close at very different rates, so work closely with your marketing team to invest in programs and channels that yield the highest close rates.
  4. Positive momentum - Look at your frequency of engagement with each of your deals; engaged prospects are much more likely to close. If you’ve reached out to a prospect but have only gotten radio silence, flag the deal.

4/ Use your sales pipeline to create accurate sales forecasts.

Your sales pipeline is the most powerful tool you have in your arsenal when it comes to creating sales forecasts. Accurate sales forecasts provide enormous benefits to businesses, allowing them to more reliably plan for hiring, budgeting, and setting appropriate performance plans.

It’s important to consider the following three criteria when forecasting:

  1. Average close rate for each stage of your sales pipeline
  2. Average close rate based on opportunity size
  3. Average close rate based on opportunity age

Forecasting requires that you first predict the probability (typically based on historical performance) of deals closing at each stage of your sales pipeline. For example, if you know you close 25% of deals that you conduct a product demo for, you can forecast that you’ll close 25% of the deal value in your “Demo” pipeline stage.

When putting together forecasts, try to identify your “strike zone”—the types of deals that you close most often. Identify the characteristics of these deals; you can be most confident applying your historical close rates to deals with similar attributes when creating your forecasts. Look at whatever historical data you have on hand and consider:

  • What percentage of deals that reached each pipeline stage closed?
  • What percentage of deals that reached any given pipeline stage eventually moved to the next stage?

Once you’ve answered these questions, you can use a simple formula to create your forecasts.

Forecast = opportunity size X pipeline-stage-specific close rate

Apply this formula to each of your deals and you’ll have a monetary value for each deal that you can comfortably forecast. For example, say the total value of all of the deals in the “Demo” stage of your sales pipeline adds up to $500,000. If you know that you typically close 25% of deals that reach the demo stage, then you can accurately forecast $125,000.

$500,000 X 25% = $125,000 forecasted

Be sure to consider the length of your average sales cycle, because forecasts are focused on how much deal value will close in the period you’re forecasting for. For example, if you know that deals in the “Demo” stage will remain in your pipeline for three more months before they close, you won’t want to include those deals if you are pulling together a forecast of deals expected to close this month. Only forecast deals that have an expected close date within the timeframe that your sales forecast addresses.

Finally, apply your knowledge and intuition based on your interactions with each of your opportunities. While sales pipelines offer a scientific approach to forecasting, sales is both an art and a science. You have intimate knowledge of the nuances of each of your deals; remember to account for the human element and consider your own intuition when putting together your sales forecasts.

5/ Track sales pipeline metrics and key performance indicators (KPIs).

Sales pipelines also allow you to track a series of metrics and KPIs related to your sales process, making it easy to see whether or not you’re on track to hit your performance targets.

Start with your monthly or quarterly revenue target, then divide it by your average deal size—this will tell you how many deals you’ll need to close in a given period. Next, work backwards applying your deal specific close rates to see how many deals you’ll need at each pipeline stage. Take a look at this example of a company with a simple three-stage pipeline:

Lead→Demo→Closed Won

Monthly revenue target: $20,000

Average deal size: $2,000

Deals required to hit revenue target: 10

Lead-to-demo rate: 50%

Demo-to-closed-won rate: 50%

Because you know that only 50% of demos become closed won, you’ll need to get $40,000 worth of pipeline (20 demos) to the demo stage. You also know that only 50% of leads make it to the demo stage, so you’ll need $80,000 worth of pipeline (40 leads) in order to hit your revenue goal of $20,000.

$80,000 of pipeline (40 leads) X 50% = $40,000 of pipeline (20 demos) X 50% = $20,000 revenue target (10 closed won deals)

Track these sales pipeline metrics.

  1. # of opportunities in each stage of your pipeline
  2. Value of opportunities in each stage of your pipeline
  3. Average # of days spent in each pipeline stage
  4. Average close rate by pipeline stage
  5. Sales velocity (average # of days required to close a deal)

Optimization levers are opportunities to grow revenue.

Once you start tracking sales pipeline metrics and KPIs, you’ll naturally start to look for opportunities to improve them. Improving any of the following measures should lead to more sales:

  1. Increase the number of deals entering your pipeline
  2. Increase your close rates
  3. Increase your average deal size
  4. Shorten your average sales cycle
Chapter 06

What's Next?

Now that you understand how and why you should take advantage of sales pipeline management, you’re off to define your pipeline stages, implement your CRM, and train your team.

Here’s a checklist of what to do to ensure your sales pipeline management practices are being executed successfully:

sales pipeline management checklist

For many sales leaders, pipelines are a missed opportunity.

If you make your living as a sales professional, chances are you’re not one to back away from a challenge. As you strive to hit your quota and your company gradually reaches its revenue targets, having that competitive edge becomes even more important. By taking a scientific approach to tracking the sales process with pipelines, you have a powerful tool at your disposal that can be used to consistently identify opportunities to increase sales.

While taking the time to clearly define entry and exit criteria for each stage of your pipeline might not deliver the same rush as landing a huge deal, closely monitoring sales pipeline metrics and KPIs directly correlates to your ability to remove obstacles in the buying process and hit your revenue goals. And as you hit quota after quota and move into sales leadership roles, you’ll notice that you’re able to deliver more accurate sales forecasts.

Lean in to your pipeline and start knocking down those quotas. (It’s up to you to decide how you want to spend that bonus.)