Sales pipeline management: what, how, & why

What is sales pipeline management?

A sales pipeline is a visual representation of a company’s sales process, showing each stage prospects move through before becoming paying customers. Very simply, sales pipelines help teams measure their progress, prioritize leads more effectively, and forecast revenue more accurately by monitoring how many prospects are in each stage of the process and how likely they are to convert into paying customers.

Digging in deeper, sales pipeline management is the process of tracking and optimizing each stage of the sales pipeline to ensure leads move smoothly toward a successful close. 

This is super important for businesses because it enables them to better predict revenue, ensure reps are focused on high-value leads, and identify areas of improvement — all of which accelerate growth and improve sales performance.

By prioritizing sales pipeline management, sales leaders and teams can:

• Identify and eliminate bottlenecks in the sales process 
• Gain deeper insights into why certain deals fall through while others succeed
• Anticipate and plan for potential sales downturns and growth opportunities
• Discover high-value and high-converting prospects — and new pipeline opportunities

In order to manage a pipeline, however, you first have to understand it. 

While we’ve talked about how to build a sales pipeline and how to build a sales forecast using your pipeline, this piece will cover how to manage a sales pipeline as a sales leader so you can identify issues and opportunities moving forward. 

Pipeline management metrics to track

If you don’t measure something, you can’t improve it. This is why it’s crucial to have a foundational understanding of how your sales pipeline is performing at any given time and how prospects are moving through each stage of the process. 

That said, just because you can measure something doesn’t mean you should. With that in mind, let’s examine six key sales pipeline management metrics you need to keep tabs on.

1. Numbers of deals in pipeline

This metric measures the total count of active opportunities in your pipeline at a given time. To calculate it, simply count all open deals in your pipeline at each stage. By keeping your tabs on total numbers of deals in the pipeline, you can quickly gauge lead flow and determine whether you have enough leads to meet your revenue goals and whether you should focus your efforts more at the top or bottom of the funnel.

2. Average deal size

Average deal size refers to the revenue you get per closed deal. To determine this number, divide the total revenue generated by the number of deals closed within a specific period. This metric helps forecast revenue potential and identify trends in deal value over time. If your average deal size is decreasing, you’ll probably want to figure out why.

3. Pipeline velocity

Pipeline velocity measures the speed at which deals move through the sales pipeline. To calculate this metric, multiply the number of qualified opportunities by the win rate and average deal size, and divide that number by the length of the average sales cycle. Tracking pipeline velocity helps you estimate the revenue that could be generated during a specific timeframe, which can help you with goal-setting and allocating resources more effectively.

4. Win rate

Win rate refers to the percentage of deals that close successfully. You calculate it by dividing the number of closed-won deals by the total number of opportunities and multiplying that number by 100. When you know your win rate, you can tell how effective your team is at closing deals and adjust your sales strategy accordingly.

5. Sales cycle length

The sales cycle length measures the average time it takes from the first contact to when a contract is signed. To find it, divide the total number of days to close deals by the number of closed deals within a certain period. While a shorter sales cycle is a sign your team is working efficiently, a longer one may indicate there are areas where your processes need some attention.

6. Customer lifetime value (CLV)

Customer lifetime value measures the total revenue a customer is expected to bring in over the length of their relationship with your business. To calculate it, multiply the average purchase value, purchase frequency rate, and customer lifespan. This figure helps you understand long-term customer profitability and decide how to invest in customer acquisition and retention most effectively. 

By having consistent visibility into all of these metrics, you can start to see when things are slipping and intervene immediately. For example, if your average deal size starts to dramatically decrease, it may be due to the fact your reps are discounting too much in order to close more deals. If you see the pipeline velocity start to speed up, it could indicate that your team isn’t accurately labeling the stages of potential deals in the pipeline.

Sales pipeline management is all about having an accurate view into your potential revenue. By tracking pipeline management metrics, you can take actionable steps to address any issues or bottlenecks whenever the numbers don’t look as good as they should. At the same time, you can also identify trends and opportunities that you can double down on to win more business. 

Best practices for sales pipeline management (aka sales pipeline management tips)

Effective sales pipeline management is key to driving growth and keeping deals flowing smoothly through each stage. In this section, we share some best practices you can use to refine your pipeline, helping your team prioritize opportunities, stay organized, and close more deals.

Ensure sales team knows how to qualify prospects 

Effective sales pipeline management is only possible when every team member knows how to correctly qualify prospects. This involves asking the right questions to understand a prospect’s budget, timeline, and decision-making authority.

By consistently qualifying leads, teams can focus on prospects who are most likely to convert. As a result, they can save time and resources while improving pipeline efficiency and optimizing win rates. 

Ensure team is updating sales pipeline regularly

Even though updating the CRM and sales pipeline are among some of the less exciting tasks reps are responsible for, keeping the CRM updated needs to be a top priority for every team member. By maintaining up-to-date records, you can ensure accurate forecasting and prioritize leads more effectively. There are many sales automation tools that can make this task easier!

When team members understand how important updating their leads is, they’ll see it as more than a box they have to check. Ultimately, it’s all about making the sales pipeline a reliable source of truth for the whole team.

Review your sales pipeline regularly with the team

Scheduling regular pipeline review meetings is a great way to keep the sales team motivated and accountable. These meetings give everyone a chance to align on goals, share updates, and discuss any potential roadblocks before they grow into serious issues. 

Additionally, regular meetings also encourage team members to stay on top of their leads. After all, no one wants to be singled out for having outdated or incomplete information when everyone else is on the level.

Bottom line? Consistent reviews strengthen teamwork and keep your sales process moving efficiently. Make sure you meet frequently enough so the data always stays current.

Standardize your sales processes 

A standard sales process is critical for ensuring your team operates efficiently with consistency. Standardized processes provide clear steps for handling leads and closing deals, making it easier for team members to understand expectations and stick to best practices.

If you’re new to this or are launching a new product, building a standard process can seem challenging from the outset. By defining key actions for each sales stage, you can ensure smooth execution while measuring progress more precisely, setting a solid foundation for sustainable growth.

Use all sales CRM features

Every sales team member knows the traditional CRM features. But in the age of automation and artificial intelligence, your team might be working harder and not smarter — which is why it’s so important to make sure you’re leveraging your CRM to its fullest potential.

Many CRMs now integrate directly with email systems, enabling your team to track conversations automatically. Automation can also streamline repetitive tasks — like generating reports and sending out real-time alerts. When you keep tabs on new features released by your CRM provider, you can ensure your team stays a couple steps ahead.

Tell your sales team what’s working & what isn’t

To boost sales effectiveness, you need to keep your team informed about what’s working and what isn’t. In addition to regular pipeline management meetings, encourage open discussions about successful strategies — like a new marketing one-pager that’s resonating with prospects. 

If one team member finds it effective, sharing that insight can inspire other reps to adopt similar practices. By operating transparently and keeping everyone in the loop, you can help every rep continuously improve their approach — which leads to better business outcomes.

Set up systems & automations to save time

Setting up systems properly and incorporating automation into day-to-day workflows can save your team a ton of time — enabling them to focus more on the highest-value activities.

By leveraging tools that can automate outbound sequences and CRM workflows, you can eliminate repetitive tasks that take up too much time. For example, automating lead tracking and follow-up reminders allows your team to focus on building relationships instead of getting bogged down by administrative duties. 

And the best part? Investing in these systems not only increases team productivity, it also enhances overall sales performance by ensuring opportunities don’t slip through the cracks.

Talk to closed customers about your sales process

After you close a deal, the journey’s just beginning. Engage with your new customers to gather feedback about their experience with your sales process. This conversation can reveal valuable insights about bottlenecks or challenges they faced, giving you the data you need to identify areas for improvement.

By understanding what worked well and what didn’t, you can refine your approach to close deals more efficiently in the future. This, in turn, enhances the customer experience — which leads to stronger relationships and repeat business.

Talk to lost deals to find out what went wrong

You can gain a wealth of knowledge from your new customers, and you can also learn a ton from prospects that ultimately decided to go in a different direction. Understanding their reasons for choosing another vendor over you can help you identify gaps in your offerings, pricing, and customer engagement strategies.

Such feedback is crucial for improving your approach and may help you uncover patterns that can be addressed in future pitches — increasing your chances of winning more deals down the line. Simply put, it tells you where you’ve made missteps — which reduces the likelihood you make them over and over again.

Do you need sales pipeline management software?

That’s a great question! While there are tons of solutions out there that offer great benefits — like Gong, Salesloft, and Clari — will they actually help your team?

On the plus side, sales pipeline management software can deliver several benefits to your organization, including increased visibility into your sales processes, improved forecasting, and streamlined communication. These tools can also help reps stay organized and focused on their targets, making it easier to manage leads and close deals.

But it’s not all gravy. There are downsides to consider, too. Some sales pipeline management tools can be expensive and may be too overwhelming for certain users, potentially leading to information overload. At the same time, while vendors are quick to sing their own praises, it’s not uncommon for them to overstate just how effective their tool is. 

Either way, if your organization lacks a solid sales strategy, pipeline, and defined sales processes, even the best software in the world might struggle to deliver the results you’re hoping for. That’s why you’re best off making sure your foundational strategies are in place before deploying any sales pipeline management tools. Once you’ve got all your ducks in a row, it’ll be that much easier to maximize the potential of any tools you decide to adopt.

Looking to bake more efficiency into your sales processes and uplevel your sales strategy? LeadIQ can help. Take our platform for a free test drive today to learn more about how you can lay the groundwork for creating a world-class sales org.

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