For startups, a robust pipeline is key to predictable revenue and efficient scaling. Chris Sorensen, CEO of PhoneBurner says that “A tailored sales process is vital for SaaS companies because the subscription-based model emphasizes recurring revenue and long-term customer relationships.”
Building out a solid sales pipeline improves operational efficiency and drives sustainable growth According to Harvard Business Review, companies with a more formal sales process generate more revenue and have a 15% higher growth rate than companies with an ineffective process.
Here’s what you need to know to build a solid sales pipeline of your own.
Understanding the Sales Pipeline
Definition and Importance
A sales pipeline tracks the progression of a new lead through the sales process—from prospecting to renewal and upselling. In fact, “pipeline is the lifeblood of sales success,” according to Forbes.
A robust sales pipeline provides a clear picture of how the sales team is performing. It enables greater visibility into the sales process and equips sales leaders with data-driven insight into lead generation, conversion rates, and the effectiveness of their qualification process. This allows you to forecast revenue more accurately, reduce the length of sales cycles, and recognize revenue more quickly.
Key Stages of a Sales Pipeline

While the stages of the sales pipeline may differ based on a company’s business model or specific needs, they tend to follow these basic stages:
- Lead generation: During the lead generation stage, sales reps prospect for potential leads and/or marketing attracts ideal customers through a series of marketing campaigns and tactics, like webinars, downloadable guides, free events, etc.
- Qualification: Sales reps use this stage of the sales process to determine whether or not the lead is a good fit for the solution and if they’re ready to buy. Typically, if they aren’t ready to buy, they enter a nurture track that educates and engages them until they are.
- Discovery: The discovery phase occurs when a lead raises their hand to show interest in the SaaS solution. During this phase, the sales rep dives into the problem the lead is facing to understand their specific challenges and map out solutions. Reps should avoid selling during this phase and instead focus on grasping the problem as comprehensively as possible.
- Demo: With a better understanding of the lead’s pain points, the sales process then moves to the demo phase. During this phase, sales reps provide a demo of the SaaS product to show how their software solves the lead’s problem. Often, the demo stage involves multiple buyer-side stakeholders so that they can see whether the product addresses all relevant use cases.
- Proposal: After the buyer and sales rep reach a verbal agreement, the sales rep sends over a proposal that outlines the terms of the contract, the cost of the service (priced to ROI), and the length of the engagement.
- Negotiation: During the negotiation stage, the SaaS startup addresses and overcomes objections to the terms of the proposal, finalizes a price that both parties agree on, and fleshes out the terms of service to the satisfaction of both buyer and seller.
- Closing: Once the terms are to everyone’s liking, the lead signs the contract and sales hands off the client account to customer success.
- Renewal: This stage isn’t traditionally considered part of the sales process, but the unique nature of the SaaS business model means that regular renewals are essential to pipeline health and a high customer lifetime value. When your SaaS startup provides a top-notch customer experience, you encourage on-time referrals, boost upsell opportunities, and decrease the likelihood of customer churn.
Steps to Building an Effective Sales Pipeline
According to V. Frank Sondors, Founder of Salesforge.ai, “Building a startup pipeline takes a process that’s clear, scalable, and replicable.” Here are some tips for sales leaders trying to do it right.
Step 1: Define Your Sales Process
According to Harvard Business Review, there’s an 18% difference in revenue growth between companies with a well-defined process and companies without out. Defining your sales process provides clarity to your reps on how to engage with leads, when to move them further down the pipeline, how to handle objections, and what messages to use, setting the expectations for the customer journey.
In fact, a well-defined sales process is tightly aligned with the customer journey.
What SaaS CEOs (and entire revenue teams — product, marketing, and sales) need to understand is that the customer journey IS the sales process. You cannot force a customer to buy the way Salesforce defines a sales cycle (needs analysis, demo, custom demo, proposal, follow-up, etc).
Likewise, Sorensen agrees that aligning the customer journey with the sales process means meeting prospects where they are. “At PhoneBurner, we’ve defined our pipeline stages—like lead qualification, demo scheduling, free trial engagement, and contract negotiation—based on the SaaS buyer’s decision-making process.” This helps them understand, based on lead engagement, when to move them to another stage of the pipeline, rather than doing so at a pre-determined time.
Step 2: Identify Key Pipeline Stages
Given the unique nature of the SaaS business model, the sales pipeline may have slightly different stages than in other businesses. Perry believes that the sales pipeline doesn’t end at customer creation. He maps it back to the customer journey, which includes the following steps:
- Awareness
- Consideration
- Decision
- Retention
- Advocacy
Perry argues, “A SaaS company has to earn the business every year. Yes, it starts with new account sales, but it continues with existing account sales or customer success. Plus, you need your SaaS customers to be advocates for you.”
Likewise, Peter Lewis, CEO at Strategic Pete agrees that a well-structured SaaS sales process ensures that a team closes new deals as well as nurtures its own base account: “In one SaaS company I worked with, formalizing a "land-and-expand" strategy meant a 25% lift in average customer lifetime value over six months.”
Step 3: Implement a CRM System
A Customer Relationship Management (CRM) system is an essential tool for keeping the sales pipeline on track and the entire sales team on the same page. Without it, managing the sales pipeline becomes tricky and dependent on manual data-entry, which introduces unnecessary friction into the process.
Sondors advocates for CRM software to keep the pipeline running smoothly. “HubSpot and Salesforce are great for managing SaaS pipelines, especially when paired with Marketing Automation Platforms (MAPs). The CRM helps track deals and stages, while the MAP keeps leads engaged, even if they’re not ready to buy yet.”
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Sorensen also argues that CRM software — as well as MAPs — is critical to pipeline creation. “They help centralize data and integrate well with marketing automation platforms (MAPs), like Marketo or Pardot, to nurture leads at scale. A CRM ensures no opportunity slips through the cracks while enabling real-time insights into pipeline health.”
When evaluating CRMs to manage your pipeline and improve scalability, prioritize tools with these features:
- Third party integrations
- Lead management
- Lead interaction tracking
- Data analytics
- Marketing automation.
Step 4: Train Your Sales Team
Building pipeline is as much about your software as it is about your people. According to Lewis, “Sales teams need training on qualifying leads effectively, nurturing prospects without overloading them, and using CRM systems efficiently.” To train his team, he’s conducted role-playing discovery calls, where reps practice handling objections tied to SaaS-specific challenges, like budget constraints or IT skepticism.
Sorensen also provides his team with ongoing enablement on prospecting techniques, CRM best practices, and pipeline management. “I find that by doing this we help ensure consistency and address challenges like lead leakage or misalignment between sales and marketing. For example, we conduct regular joint meetings to review lead handoffs, which has reduced friction and improved conversion rates by at least 15%.”
Sales leaders recommend Sales Hacker webinars and Sandler Sales training programs as some examples of highly valuable resources that exist to further SaaS-specific skills. Some other examples include:
- Monthly pipeline check-ins
- Group CRM training
- Standardized sales playbooks and guides
As Lewis says, “Empowered sales teams simply build stronger pipelines.”
Step 5: Monitor and Optimize Pipeline
Periodic, in-depth reviews of your sales pipeline is crucial to long-term pipeline health. Lewis believes that monitoring pipeline helps teams quickly notice bottlenecks — “For example, too many deals stalled at proposal, over-reliance on a single lead source. Once, for instance, implementing biweekly pipeline reviews with one SaaS startup, it uncovered how our sales representatives overloaded the demo stage without much qualification. Changing SQL criteria increased close-to-demo ratios by 20% percent.”
Sorensen agrees, implementing similar tactics at PhoneBurner. “We run weekly reviews to analyze metrics like time-in-stage and deal velocity, which allows us to adjust tactics proactively. This habit has helped prevent stagnant deals and keeps our pipeline flowing smoothly.”
By monitoring your pipeline, you ensure that you always have the most up-to-date information available to make informed decisions. Knowing what metrics to track also helps you keep a finger on the pulse of what’s going on in your pipeline. Some metrics and key performance indicators to track can include:
- Time to close: How long does it take to close a deal after creating a new lead
- MQL:SQL ratio: How many marketing qualified leads enter the sales pipeline
- Pipeline value: The total value of opportunities within your pipeline
- Deal win rate: Of the deals in your pipeline, how many do you win.
Common Challenges and Solutions in Pipeline Development
Even startups with a well-defined sales process and well-trained sales reps can face challenges when trying to develop sales pipeline. Here are some common challenges to building pipeline and how to overcome them.
Lead Leakage
This happens as leads fall through the cracks of your pipeline, whether from churn, poor qualification, or lack of follow up. According to Clari’s Revenue Leak report, lack of deal visibility (49%) and deal progression (49%) are the top reasons pipeline isn't converting.
At one startup, Lewis addressed this problem by integrating their CRM and MAP.
Integrating Pardot into Salesforce reduced our lead leakage by 30% because leads moved seamlessly between marketing and sales without manual intervention.
Sales and Marketing Misalignment
Misalignment between sales and marketing is a common cause of low/slow pipeline build. This is often because each function has their own goals, works from their funnel, and tracks separate metrics in disparate tools. This lack of alignment can exacerbate lead leakage and negatively impact the bottom line.
How to Address Sales and Marketing Misalignment
To address this, Sondors’ team implements a shared dashboard between marketing and sales. “We have a shared dashboard to keep communication clear. It lets the marketing team see which leads are converting so they can adjust their campaigns to better support sales. It’s about being able to work together towards a unified goal.”
Pipeline Overload
Pipeline overload is a challenge that may seem counterintuitive at first. It means your team is focusing too much on quantity over quality, overloading their pipeline with leads that might not be a good fit for the solution the company offers.
How to Address Pipeline Overload
Developing and standardizing a lead qualification process can help reps focus more on the quality of their opportunities than quantity. Lewis recommends using “AI-driven scoring to prioritize the highest-potential leads and pass fewer, better-qualified opportunities to reps.”
Fuel your Sales Pipeline
As Perry points out, “A SaaS business model is a continuous sales model.” This means that the sales pipeline doesn’t end once a lead becomes a customer, but continues into upsell and renewal. This means that maintaining a pipeline is essential to meeting your business’ revenue goals.
A combination of well-trained reps, comprehensive tooling, and standardized processes can help your team to build and maintain a robust sales pipeline. Also, addressing challenges (like lead leakage, pipeline overload, and sales and marketing misalignment) can help you maintain a strong pipeline with minimal interruption, helping your SaaS startup to achieve sustainable growth.