Before our digital age, marketing contributed to the sales pipeline with lead generation and by creating general assets for sales teams to use throughout the sales process, such as general overview brochures, charts with feature descriptions and benefits, PowerPoint presentations, and case studies. Nurturing and moving customers through the sales pipeline was primarily left to the sales team, with marketing remaining focused on their own set of goals, metrics, and key performance indicators (KPIs).
Today, modern marketers are empowered with more data and marketing tools than ever before. One way they’re using them is to make data-driven decisions while working closely with the sales team, which nurtures potential customers through the entire sales pipeline. It’s a shift from filling the top of the funnel with as many leads as possible to revenue generation and a cost-per-opportunity KPI.
Our guide below explains what pipeline marketing is, how it works, its various stages, how it differs from lead generation, and the steps to take to build a sales and marketing pipeline.
What is pipeline marketing?
Pipeline marketing combines marketing and sales data to better qualify leads and improve and enhance prospect engagement along the entire sales journey. The goal is to increase conversions and generate more revenue. It promotes teamwork with sales, aligns common goals between sales and marketing, and enables marketers to demonstrate their role in revenue generation more clearly. Ultimately, pipeline marketing can boost marketing investment (MROI) and help marketers justify future spending and budget allocation.
Let’s say, for example, sales and marketing data indicates there’s an issue with a lead qualification in the sales pipeline. Instead of spending time and money on generating more leads, a pipeline marketing approach uses those resources to create ways to help qualify leads and move potential customers to the next stage of the sales pipeline. For instance, it could be changing the lead magnets used to gather contact details and data from potential customers that reveal interest and intent.
How does pipeline marketing work, and why is it important?
Like marketing and sales funnels, sales pipelines are wider at the top and narrower at the bottom, where prospects make a purchase decision and become customers. Pipeline marketing aims to widen the middle and lower sections of the sales and marketing pipeline, ultimately leading to a higher conversion rate. This is accomplished by viewing the sales pipeline as a whole and uniting sales and marketing efforts to create an integrated, engaging, customer-centric approach that better qualifies leads and closes more sales.
Pipeline marketing is also a solution that helps companies overcome the “numbers game” concept, placing more attention on generating a large volume of leads than in the middle and bottom pipeline stages. The idea is that if the conversion rate is, for example, 5%, a greater amount of revenue will be generated with a larger quantity of leads. This creates a huge funnel at the top that’s very narrow at the bottom and generally has a high cost per opportunity (CPO).
An effective pipeline marketing strategy not only creates a broader and more efficient, and effective sales pipeline but it should also lower CPO. A low CPO means sales and marketing are achieving their goals. By bridging marketing and sales efforts, departmental goals become better aligned, and cost per opportunity can be used as a key performance indicator (KPI) for both teams.
What are the stages of a sales pipeline?
Let’s start by defining what a sales pipeline is. Simply put, it’s a summary of available and upcoming sales opportunities salespeople use to determine the set of actions they will take to move potential customers through the pipeline, identify bottlenecks in the sales funnel, and project revenue.
The seven stages in a sale pipeline, outlined below, should be tracked and monitored. Keep in mind that sales pipelines can vary from company to company due to several factors. If your sales team doesn’t have the bandwidth or the expert knowledge needed to create a sales pipeline and tracking metrics, consider staff augmentation with Upwork for the project.
1. Prospecting
The goal of prospecting is to create a pipeline of potential buyers most likely to purchase. At this stage, marketing may use various inbound and outbound marketing efforts designed to appeal to a defined target audience. Prospecting campaigns should also focus on buyer personas that best reflect the profile of an ideal customer and your current customer base.
2. Lead qualification
Leads are businesses or people that may eventually become a customer. Qualified leads are those you determine could become customers based on the criteria and information they have freely provided. For instance, you may elect to offer an booklet to decide if a person or business is interested in learning more about your product or service line. If they follow through and provide information to download or open the material, they move from being a lead to a qualified lead.
3. Demo or meeting
At this point, a qualified lead has signaled interest in learning more. Now is the time to schedule a virtual or in-person appointment or demo to personalize the buyer’s journey, build trust, provide more information about how your product or service line can meet the buyer’s individual needs, and answer questions. The goal is to determine if you can proceed with a proposal and move the prospect to the next pipeline stage.
4. Proposal
Review how your product or service will best address the prospect’s pain points, needs, and desires, and why your solution is ideal. Highlight your competitive advantages and overall value in addition to providing pricing. Now may be the time to reveal a special incentive. This depends on many factors, such as whether you have sensed a potential upfront price point objection. If you decide to include some kind of motivating incentive in the proposal, remember you may need to offer a deal sweetener during the negotiation phase.
5. Negotiation and commitment
The potential customer has signaled they are ready to buy and it’s time to negotiate. You may need to manage expectations, handle objections, fine-tune a scope of work, and further clarify your brand’s value and your product or service advantages and benefits.
6. Opportunity won
Congratulations! You’ve made the sale and are ready to fulfill the order. Keep in mind the commitments you’ve made to the customer along the pipeline stages and take steps to ensure your promises will be fulfilled.
7. Post-purchase
Follow-up and account management are essential components of the sales process and to developing and maintaining a meaningful customer relationship. Keep in mind, almost every customer can become a loyal, repeat customer in the future. Plus, a satisfied customer can help you “sell” your service or product through referrals.
Pipeline marketing versus lead generation: What’s the difference?
Remember the “numbers game” we mentioned earlier? Lead generation is typically about volume. The assumption is the more leads you generate, loading up the pipeline at the top of the funnel, the greater the number of sales you’ll eventually close. Instead of striving to produce as many leads as possible and using lead generation as a key metric, pipeline marketing tracks leads but focuses on viewing the pipeline as a whole with attention to quality, efficiency, and buyer readiness versus sheer volume. And, as previously mentioned, cost per opportunity is used as a KPI instead of top-of-funnel metrics.
That’s not to say lead generation doesn’t play an essential role, but a leader doesn’t have real value unless it results in a sale. Using an analogy, what good is spending money and time to round up as many horses as possible if you can’t lead them to water, or if they won’t drink once they get to it? It’s a wasted effort. But, what if, based on data you’ve collected, you could apply more resources to developing better ways to identify the thirsty horses in the roundup and not only lead them to the water but convince them to drink? In essence, this is pipeline marketing.
