What is Your Sales Pipeline?

This is a very common sales terminology. As a business development person, or even an entire team, begin building up a quantity of leads and prospects during the sales process, these opportunities are often referred to as a pipeline.

Similar to oil production and transportation, they are in the process and on the way. Unlike this metaphor though is the reality that not all of these sales will actually happen. With an oil pipeline, the amount you put in at one end is the amount you get at the other end. Sales pipelines do not work this way. So the idea is that you want to fill your pipe as much as possible so that you have maximum production at the other end.

This is not to mean only counting the ones that are about to close, but opportunities no matter what stage they are in within the sales funnel so long as they have been qualified.

This is where sales managers spend a great deal of time. It is their responsibility to confirm that each rep has lots of opportunities in progress and that these are being managed well. If a team’s closing percentage stays consistent, then a forecast can be created to reasonably project how much business will be closed based on what is coming down the pipe.

As a sales person, you want yours to be full. In the event that your closing ratio may be lower for a given quarter, this helps to offset these numbers so you hit your quota. If on the other hand, you close at a steady rate or even higher, then this just means you bring in more commission. Either way, you can never have a big enough pipeline.