How Many Sales Pipeline Stages Should you Have?

6 minutes read
What may be less clear is what a sales pipeline is, how it might benefit your business and how best to go about redefining your sales processes.


Here we consider what sales pipeline is and how effective pipeline management can result in improved outcomes for your organization.

Also, we will look at how to build a pipeline. In addition, we consider the number of stages needed to optimize the number of deals you manage to complete.

At its most basic, a sales pipeline is a model that identifies the stages a customer will go through before they purchase your product.

There are many pipeline models out there. Classic sales pipeline template options include the AIDA model and the Marketing RaDaR model.

What is a Sales Pipeline

A Sales Pipeline is way of tracking prospects during the sales process. The Pipeline Stages bring deals to the next phase, and make customers ready to buy.

The Sales Pipeline model

The AIDA model, for example, lists the sales pipeline stages as firstly Attention (or Awareness), followed by Interest, Desire, and Action. Additional sales pipeline stages that may replace or augment the AIDA model might include:

  • Prospecting (the mechanism to obtain new sales prospects of leads)
  • Lead qualification (checking that the leads you’re getting are from individuals or companies that are most likely to want what you’ve got to offer).
  • Developing a suitable invitation or proposal.
  • Raising interest (perhaps by inviting prospective customers to enjoy a FREE trial or provide a suitable demonstration).
  • Overcoming objections to purchase
  • Negotiating in order to obtain a favorable outcome.
  • Putting in place appropriate post-sales support.

For your company, a customized pipeline, that takes into account individual circumstances, might be the best way.

What are the Advantages of a Sales Pipeline?

There are a number of benefits that having a carefully thought-through process for your sales of a product or service can bring. Some of these are detailed below.

Clear Objectives and Outcomes

The pipeline provides clarity of purpose and directly links action to outcomes. As such, it offers direction and provides a useful tool for accountability.

In other words, attempting to sell without a clear sales process means there’s no quantifiable way of identifying why a sale goes ahead or falls by the wayside.

A Tool for Learning

If you can identify where your mistakes are, it’s possible to learn from them with a view to improvement. If crafted correctly, the sales pipeline enables every member of the team to see the stages where things need to be done differently.

A Tool for Improvement

Once the process for sales has been determined, it’s possible to look at it in depth to consider where the omissions and weak points are in your current operation. 

If you’re not getting the results you need, there’s a need to do things differently! Therefore, a sales pipeline gives you the information needed to determine where the weak points are, enabling focused, effective action to be taken.

Creates Cohesion and Teamwork

A framework for selling removes the focus on individual worker performance as the key determinant of success. Historically, emphasis has been put on the ability of sales reps to sell, without considering the wider context of the sales process. 

Therefore, this may result in team members being unfairly blamed for poor sales when the reality is that the weakness lies in other areas of the process (such as poor-quality leads or weak after-sales care that generates negative customer reviews).

In conclusion, a written framework that defines the sales ensures every team member is working to the schedule that’s most appropriate for your organization. 

Having clear guidelines empowers and motivates employees, which is exactly what’s needed in the working environment.

Facilitates Accurate Forecasting

Accurate forecasting of future profit is critical to successful financial management. 

Having a good understanding of how many times the sales team is likely to close a deal in the next week, month or year is vital to effectively plan resource allocation, future expansion, and other aspects of organizational change.

Part of the pipeline process involves the production of a regular pipeline report in your Sales CRM. 

Pipeline software provides real-time information on every aspect of your sales activity. Displayed in an accessible format, pipeline intelligence provides the data your business needs for high-caliber planning and sales management.

Increases Profits

Ultimately, research shows that companies that have a well-thought-through sales pipeline in place are more likely to enjoy high sales, which translates into greater profit.

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How to Build a Sales Pipeline

There are several different methods of building an effective sales pipeline. As most companies will have some sort of sales pipeline in place, it may be that only modest tweaking is required to improve its caliber. 

In other cases, the pipeline will need to be created from scratch.

In the first instance, it’s helpful to have information on your customer base. The more information you have, the easier it is to determine what type of sales funnel is going to work best for your organization.

Establish Your Sales Stages

A good starting point is to take an established model which contains basic stages in a logical format, then consider how it relates to your operation.

Decide on Your Outcomes

Once you’ve identified the stages in your sales cycle, it’s helpful to consider what outcomes you’re trying to achieve. 

As well as overall sales targets (which need to be set within the context of what’s needed for the company to meet its revenue targets), outcomes such as increased engagement from potential customers, raising awareness, or increasing the size of each sale (rather than the volume of sales) may also be identified.

Get the Right Data

The best pipelines are those that are informed by high-grade data! The more you can find out about your target audience and their response to your marketing approach, the easier it is to work out how to improve what you do to deliver better results.

Get Input From the Sales Team

The sales team are the individuals who are most likely responsible for delivering key stages of the pipeline. 

Their insight into what works well and where weaknesses lie might be is critical to ensuring your pipeline is optimal for your operation.

Engaging the sales team at an early stage will also help to build motivation and commitment to operating the pipeline effectively – key ingredients needed to achieve the outcome you’re looking for.

Monitor, Evaluate and Review Your Pipeline

A sales pipeline will evolve continuously as further insight is gained into what works well and where improvements are needed. 

Accessible, accurate, and relevant data drives effective monitoring and evaluation. Ensuring the pipeline is supported by effective data gathering is critical to success.

The success or otherwise of a sale can alter quickly. Real-time data on how far down the pipeline has progressed can help sales teams quickly adapt their approach to optimize the chances of achieving the desired outcome.

What is the Optimal Number of Sales Pipeline Stages?

The short answer to this question is that it depends on the nature of your business. Too many, and you’ll end up so immersed in the minutiae of the process that the end goal ceases to be the main focus. Too few, and you may lack the detail needed to evaluate what’s working well and what needs improving.

For most companies, a sales pipeline (or sales funnel) will have somewhere between five and seven discreet stages. Within these stages, there may be multiple elements that need to be considered, which is where a checklist format can come in handy.

Like any other operational tool, it’s important that the sales pipeline remains a living document that’s regularly monitored, reviewed, and evaluated. 

Obtaining quantitative (from analytics, conversion rates, performance reports, and financial monitoring) alongside qualitative (feedback from customers, the sales team, or your sales rep, for example) helps to determine whether you need to add or remove a pipeline stage.

Depending on your setup, it may be more beneficial to set up multiple pipelines, with each being customized to suit the needs of a specific product or service.

Building a sales pipeline can be a challenge, which is why many companies seek outside expertise to ensure their pipeline is as good as it can be.

Onpipeline offers a complete CRM software for businesses seeking to implement a high-grade sales pipeline that delivers the outcomes they’re looking for. 

The package is easy to use and contains features that facilitate an easily accessible, responsive pipeline, Onpipeline’s package is available for FREE trial.

Get in touch to find out more about the benefits Onpipeline can bring to your sales and marketing processes.


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