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The Sales Pipeline Revealed
Blog / Sales Management / Jun 22, 2014 / Posted by Nikolaus Kimla / 105242

The Sales Pipeline Revealed


What is the sales pipeline? A sales pipeline describes an approach to selling, founded on the underlying principles of the sales process. It describes the individual steps salespeople take from initial contact with a potential customer, or prospect, to qualifying that prospect into a lead, and further validating that lead into a sales opportunity followed through the different stages until closed. All sales opportunities arranged along each of the sales steps that make up your sales process is what the sales pipeline represents. Here is a simple definition of a sales pipeline as found on Wikipedia. It is difficult to encounter a sales professional these days the has not heard of pipeline management. As common as the term may be, many sales organizations today are not making use of this powerful sales management methodology. Why is this?

In many cases, you could say, that those companies that are not using sales pipeline management either fail to recognize the benefits it provides or simply don’t know how to shape their sales pipeline to produce a strong sales outlook for their company. To give you an idea of how powerful the concepts behind the sales pipeline can be I will share with you my experiences with pipeline management using Pipeliner sales CRM.

If you are in the business of selling either products or services, chances are you are already using a sales process to guide your sales activities through to the sale. In many cases not clearly documented, the sales process defines the steps to take and best practices to pay attention to when selling to customers or clients. Each sales step describes the tasks and deliverables that need to be accomplished in order to take the deal to the next stage in the sale.

How Many Sales Stages Should my Sales Pipeline Contain?

If you are not sure about the number of sales steps in your sales process, I recommend you to write all of the steps within your sales cycle on paper, and focus on the most important tasks that lead your customer to purchase your product or service. However, do not create too many steps, because

“Having too many stages in the sales pipeline is counter-productive. Six or seven steps is the optimum number of stages in the pipeline.” – Donal Daly

Managing a sales pipeline with more than 7 stages could turn out to be too time consuming. Now, this entirely depends on the length of the sales cycle, in many cases such as government contracts, it might be entirely normal to have well over 7 stages that are necessary to walk the prospect from lead to closing the deal many years down the line. You can quickly get lost inside a flood of data, if you don’t keep a lean sales pipeline involving fewer steps. We have analyzed many sales processes across a number of industries, and have found that on average companies will limit their sales process to five steps with stages that can look as follow:

  • Initial contact
  • Qualification
  • Meeting
  • Proposal
  • Close

You should also know that each sales step has different weighted value within your sales process. The weighted value, or probability of closure, describes the likelihood of winning that potential customer as a paying one.

How do I Define the Closing Probability for each Sales Step?

There are many different ways of setting the probability of closure for your sales steps. For example, let’s say you will need to call 10 prospects i.e. make 10 initial contacts, in order to qualify 1 prospect to the next step of your sales pipeline. It means that only 10% of your initial contacts make it to the second sales step.

“Commonly, the probability of closure is measured in percent and shows you the likelihood of winning the opportunity for that particular sales step.”

You can freely define your sales step’s probability of closure for your sales pipeline according to your experience. Our research shows that the most commonly used closing probabilities for each of the example sales steps are as follows:

  • Initial contact – 0 %
  • Qualification – 10 %
  • Meeting – 30 %
  • Proposal – 60 %
  • Close – 100 %

Once your customer enters your sales pipeline, they become a sales opportunity. Each sales opportunity in your pipeline has its own value. By using the information about the opportunity values and probability of closure for each sales step, you can immediately “weigh” your pipeline using the weighted target within Pipeliner.

How Do I Measure a Weighted Sales Pipeline?

It’s reasonable to have 3-4 times the value of your weighted target to make quota i.e. in percentage 300%. In other words, you should have 3 times more active opportunities in your pipeline than your actual sales goal.

“The weighted target is equal to the sum of the total opportunity values in each sales step multiplied by the probability of closure for that step.” – David Brock

Let’s make a calculation (1 opportunity is valued for $1,000):

  • Initial contact – 0 % x 35 opportunities = $0
  • Qualification – 10 % x 20 opportunities = $2,000
  • Meeting – 30 % x 10 opportunities = $3,000
  • Proposal – 60 % x 5 opportunities = $3,000
  • Close – 100 % x 2 opportunities = $2,000

From these figures, I can immediately see that my weighted value for my sales pipeline is $10,000. Based on the recommendation, I should have about 3 times more value of opportunities than what my quota is. If my quota is $5,000, it’s only 2 times more than recommended. It means I need to do a lot more prospecting…

So, again, what is a sales pipeline?

Below you can find my definition of a sales pipeline:

“A sales pipeline is as a visual representation of your sales process where all your potential customers are displayed and neatly arranged according to their phase in your sales cycle.”

A sales pipeline technique is a great sales tool. A sales pipeline helps you understand you sales process, increase your sales and make you confident about your data. We are happy that we build Pipeliner around this concept.

Sales pipeline Management - Pipeliner CRM

I hope you can now quickly find the answer to the question “what is a sales pipeline“? For a more detailed look into pipeline management software take a look at Pipeliner CRM or simply try it out for free.

About Author

CEO and partner of and the uptime ITechnologies, which I founded in 1994 and has since played a significant role in the development of the IT-environment. pipeliner is the most innovative sales CRM management solution on the market. Pipeliner was designed by sales professionals for sales professionals and helps close the gap between the requirements of C-level executives for transparency and the day-to-day operational needs of field and inside sales. I am also the founder and Initiator of the independent economic platform GO-AHEAD!, which orientates itself on the principles of a free marketplace in terms of liberal and social responsibility. Connecting people, the trust of business leadership in terms of values such as freedom, self-responsibility, and entrepreneurial spirit, and strengthening their awareness in order to create a dynamic boost within the economy triggered through spontaneity, all stand for the initial ideas surrounding GO-AHEAD! I studied in Los Angeles and Vienna and received my Masters's Degree in 1994. I am married and have 3 children My Specialties are in: Sales Management, Sales CRM Software, CRM Cloud Solutions, SAAS, Business Strategy, Software Development, "Pipeline Management", Social responsibility, outbound sales, b2b sales, inside sales, sales strategy, lead generation, sales process, entrepreneurship, coaching, mentoring, speaker, opportunity management, lead management, Austrian School of Economics

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Comments (18)


Steven commented...

Excellent explanation! I’ve been analyzing different CRM options and couldn’t understand what the pipeline was, now I completely do, thanks.


Radoslav commented...

You’re welcome, and we’are glad to help you understand the pipeline methodology Steven!


matt commented...

Great information. Do you generally see a sales force list a stage while they are in it or once they have completed it?

Hi Matt and Al,

The main thing is that you have consistency in your approach – then everyone can be measured in the same way.

I find the best analogy for this is to imagine your customer is on a journey down a winding footpath. Each stage that they go into is the same as opening a gate and going through. So each stage entrance represents the customer doing something to progress – agreeing to a demonstration, providing information that helps you qualify (compelling events, critical issues that need resolving), etc.

In this way you’ll get into a stage for completing something, it’s not what is currently happening. In the example above, you move into meeting once the customer has agreed to a meeting and a date has been set.

Hope that helps.

Kind regards,


Hi Clemens,
Thanks a lot for the article, it really helped me to understand the concept better.
Could you please explain the recommendation to have weighted target 3-4 times larger than your quota? Where does it come from?

Thanks in advance,


Nkem Ukandu commented...

Thank you Nikolaus for this exposition


Jeff Oduor commented...

Timely article as I am a sales manager and I have been trying to come up with a customized sales pipeline for a while now. Good stuff.

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