How to Define Sales Cycle Stages

sales stages pipeline

Early on in my sales career, I realized a couple of fundamental truths about sales: You can’t control results but have complete control over your activities, and when you put effort into activities, results will improve.

This is straightforward when you work on your own, but when you work in a team, some ground rules are needed. Otherwise, you may have people doing more activities, but without results improving, because they are not doing the right activities. A team needs a shared understanding of the optimal sales process and speak the same language, if you will.

For example, if the best practice is to make initial contact, identify needs as the next step and then send a quote, you don’t want some of your salespeople sending out lots of quotes without asking customers about their needs first.

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Setting the right sales pipeline stages gives you more control over sales results

Working with the sales pipeline model helps you define the best process for sales and measure what gets done. You can then start managing sales activities at key stages within your sales process, and ensure that the whole team focuses on things that give the best result.

A typical sales pipeline might look like this:

  • Target (early days, not yet contacted)
  • Contacted (you’ve called or emailed)
  • Meeting Agreed (you’ve agreed an agenda and a date for the diary)
  • Proposal Sent (you’ve submitted a formal proposal with a $ figure)
  • Close (time to get the signature on the bottom line)

If leads go through the sales cycle in this order, and you increase the quantity of leads in these key stages, you’re guaranteed to sell more.

Sales pipeline stages will differ in each business based upon the sales approach, the product/service sold, decision-making process of prospects, and other factors. No one sales pipeline design fits all.

How to define sales pipeline stages that suit your business

  1. Think through your customer’s buying process and the main decision points from the customer’s point of view. Then write down the matching sales stages for your team. It should take no longer than 10 minutes.
  2. Discuss the stages with your team. Get input and initial understanding.
  3. Spend some time checking that your stages match all your typical sales scenarios. This is best done in a smaller group.
  4. Review the stages with your team. Make sure everyone understands the aim of defining sales stages and agree on measuring activities at each stage.
  5. Revise the sales stages in a month or two.  If a stage seems to be confusing then rename, delete or add new ones to reflect what’s really happening with your sales pipeline.

I’ve defined sales cycle stages. What next?

The power of sales cycle management is the ability to establish activity expectations and put measurements in place to identify and fix leaks in the sales pipeline. Defining sales stages gives you a good baseline and common understanding. Once this is done, there are numerous ways to improve and optimize the sales process.

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Urmas Purde

Co-Founder of Pipedrive. 10+ years of sales and sales training experience. These days makes sure feedback from our customers gets built into product.

  • A pipeline can organize your leads. It is important that every sales department should have one so that it would be easier to trace those leads.

  • rakesh

    as of my knowledge a sales pipeline is a visual framework that illustrates the amount of business your company tries to win over a period of time.

  • Erik Poster

    Interesting post.

    I like this bit:

    A typical sales pipeline might look like this:

    • Target (very early days, not yet contacted)

    • Contacted (you’ve called or emailed)

    Yet in pipe drive I can’t email more than one person at a time.

    So if I want to “Target” 30 of my customers in Philadelphia and “contact them” to invite them to our booth at a trade show I CAN”T with pipe drive.

    So Pipedrive won’t help me target or contact them?

    Pipedrive can’t facilitate what even pipedrive sees as the critical first steps in making a sale.

    You’ve got a problem there…

  • I was designing my own sales pipeline in the CRM system, and was thinking, let me find what other people are saying about that. Among 1-2 other links, I found you. What you say makes sense. I did not attempt to sign up at your site, as I think, CRM is so much important aspect of a company, that such information cannot be given to third providers for management. But you call your website and you have a strong point.

    There are some other links that I found, among your website, such as:
    And I was searching for “sales stages” on Duck Duck Go.

    In general, sales stages are very similar to each other. That is why many CRM providers and software makers, have put it in the system, to mark leads, contacts as “Prospects” or “Need negotiation” or “Meeting objections” or something like that. While that is certainly alright, to use such stages in the sales process, when one have different products, different services, and especially different companies, those sales stages differentiate a bit from each other.

    That is why I am designing in my database, sales flows (pipes in your terms), connected to accounts and lists where people sign up or are listed in, and sales stages belonging to specific sales flows or pipes. It is not just a flow until sale, there are after sale stages. We have to deliver product. Customer need to fly all over the world, we have sales stage to help him with booking, customer is saving money by our advices. That is just an example.

    In that manner I can assign different sales stages to people starting in gold mining, and much different

    to those starting a website and shopping cart with payment processor. Delivery stages are as well important for further reach out to clients, as if one does not deliver well, new clients will stop coming. So, the actual sale is somewhere in the middle of those stages.