A sales pipeline, or sales process, is the series of events that transpires, from the identification of a potential customer to the maintenance of a customer account after a sale has closed. As the culminating event in a business transaction, a sale is the single most important process that defines the status of being in business. Theoreticians have tried to break down the sales pipeline into cognizable steps to turn the process into a discipline that can be measured, studied, and taught, rather than something that simply happens at the whim of a customer.
Most people who study the sales pipeline will break up the process into four phases that include multiple steps. The names of the phases and steps may change depending on the terminology of the person conducting the study, but the underlying theory is basically the same throughout the sales cycle. Opportunity development, need assessment, fulfillment, and maintenance comprise the four main categories of contacts that move a sale from identification to closing.
Opportunity development includes two steps. A salesperson must identify a new opportunity and initiate communications. This will often include the application of a set of fit criteria to a random group of sales leads. It is only when a lead is confirmed as a good fit or a likely customer that the sales pipeline process begins.
The need assessment category contains steps that determine the customer’s expressed and unexpressed needs. A salesperson might have the customer fill out an application or a survey. Common interactions might include developing a scope of work or looking at samples. The intended result is to have a qualified buyer with needs that have been identified and agreed upon.
Fulfillment includes the development and proposal of the solution that will meet the customer’s needs. The next steps include the evaluation of the sales proposal and the negotiation. Finally, this process culminates in a sales order and exchange of money. This is the typical end of the sales order process because the interaction has resulted in a tangible sale, but it is not the end of the sales pipeline.
Some studies of the sales pipeline identify a fourth category of interaction involved with maintenance of the account. Customers always have the potential of becoming repeat customers, and can be a source of referrals. The steps involved in maintenance include periodic follow-up and the development of a continuing relationship that can result in a reboot of the pipeline.