A visual representation of where sales prospects are positioned in the sales process, a sales pipeline shows the estimated deals to be closed by business salespeople and the expected timeframe for reaching this quota. Managing sales pipelines involves tracking sales opportunities until they move through the sales process and analyzing potential problems in every stage of the pipeline.
Following effective pipeline management practices, such as clearly identifying a sales process, leads to increased revenue. Moreover, a sales pipeline is important for the success of a business due to the following reasons:
Targeted Deals. Through a pipeline, sales people can check what stage they are in for a specific customer or opportunity. Understanding this data allows them to only take steps targeted at closing deals. Sales managers also can focus on critical areas, such as oversight and time allocation, that need immediate decisions.
Streamlined Team Management. When a sales pipeline is clearly defined, the steps that need to be taken for every stage are also identified. Thus, a sales manager can track if the tasks for every stage have been completed, that the opportunities are moving through the pipeline as expected, and whether or not each sales representative is coping well with the challenges of the sales process.