Sales Pipeline Stages: From Prospect to Customer

The typical sales pipeline stages, what has to be true for a deal to move from one to the next, and how to define stages your whole team (and your partners) use the same way.

May 21, 2024 · By Joseph Lamoureux

Sales Pipeline Stages: From Prospect to Customer

Pipeline stages are the steps a deal moves through between “might buy” and “bought.” They’re the backbone of every pipeline report: forecasts weight deals by stage, reviews sort by stage, and conversion rates are measured from stage to stage. Get the stages wrong and every number built on them is wrong too.

This guide covers a typical set of stages, what each one means, and the part most teams skip: the exit criteria that decide when a deal has really moved.

A typical set of pipeline stages

Every business adapts its stages to how its customers buy, but most B2B pipelines look something like this.

1. Prospect

A company or person who fits your target customer profile and might have the problem you solve. You haven’t confirmed interest yet.

Exit criteria: you’ve had a real conversation and the prospect agrees there’s a problem worth exploring.

2. Qualified

The prospect has a real need, and the deal is worth pursuing. A common checklist: is there a problem you can solve, someone with budget authority, a reason to act in a reasonable timeframe, and a fit with what you sell?

Exit criteria: you know who decides, roughly what it’s worth, and why now. A meeting booked is not qualification; a confirmed need is.

3. Discovery and solution

You’re learning the details of the customer’s situation and shaping what you’ll propose: requirements, stakeholders, technical fit, and how they’ll evaluate options.

Exit criteria: the customer agrees your proposed approach fits their needs, and you know how they’ll make the decision.

4. Proposal

You’ve put a specific offer in front of the customer: scope, price and terms.

Exit criteria: the customer has reviewed it and engaged with it. Questions, pushback and redlines are good signs. Silence is not.

5. Negotiation and commit

You’re working through final terms, procurement, legal and security review, and the customer has signaled they intend to buy.

Exit criteria: a signed agreement (Closed Won) or a clear no (Closed Lost).

6. Closed Won or Closed Lost

The deal is done, one way or the other. Closing lost deals promptly is as important as closing won ones. A pipeline full of zombies inflates every total and hides how you’re really doing.

Exit criteria matter more than stage names

Stage names are easy to agree on. What breaks pipelines is that each person moves deals for different reasons. One rep moves a deal to Proposal when the proposal is drafted; another when it’s sent; a third when the customer has read it. The forecast treats all three the same.

Exit criteria fix that. For each stage, write down what must be true from the customer’s side for the deal to move on. Base them on buyer commitments, not your own activity. “We sent a proposal” is an activity. “The customer reviewed the proposal and asked for changes” is a commitment.

Write the criteria in one place, review them every quarter, and use them in your weekly pipeline review: when someone moves a deal, the question is “which criterion did we meet?”

How many stages should you have?

Five to seven open stages works for most teams. Fewer, and early and late deals blur together. More, and people stop agreeing on where a deal belongs, and the stage data gets noisy. If your team routinely debates whether a deal is in stage 3 or 4, the stages are too close together or the criteria too vague.

Some teams also keep a separate bucket for unqualified opportunities: interest you’ve noted but haven’t qualified yet. Keeping them visible, but out of the forecast, stops early conversations from getting lost without inflating your numbers.

Stages and probability

Many teams attach a default probability to each stage (say 10% at Qualified, 50% at Proposal, 80% at Commit) and weight the forecast accordingly. Others ask the rep for a confidence percentage on each deal. Either works if it’s consistent. The danger is a confidence number that’s really optimism: if every deal is “80%,” the forecast is fiction.

In Recordbook, each product or service line on a deal has a stage and a confidence percentage. Stages 1 to 5 count as Qualified, Closed-Won counts as Closed, and the Forecast weights each qualified deal by its confidence. The pipeline guide shows the calculation with an example.

Stages when you sell with a partner

A deal you co-sell with another company moves through two sets of stages: yours and theirs. A consulting partner might call it “scoping” while you call it “discovery.” A cloud provider’s co-sell program has its own statuses; AWS ACE, for example, moves opportunities through validation, approval and launch before they close (see the AWS ACE guide).

Two things keep that manageable:

Map the stages once. Write down how your stages line up with your partner’s, so “they’re in scoping” translates to a stage you both recognize.
Keep one record per shared deal. When each company tracks the deal in its own system, the stages drift apart within days. Recordbook connects your CRM and your partner’s to a shared workspace so a co-sell deal has one stage that both teams see.

A quick audit of your stages

Can every person on the team say what each stage means without looking it up?
Does every stage have written exit criteria based on what the customer has done?
Do deals spend a reasonable, predictable amount of time in each stage?
Are lost deals closed as lost, promptly?
If you sell with partners, is there a written mapping between your stages and theirs?

Five yeses and your stages are doing their job. Each no is a place your forecast is quietly wrong.

Common questions

What’s the difference between a lead and an opportunity?

A lead is a person or company that might be interested in what you sell. An opportunity is a specific potential deal you’ve qualified, with a value, a close date and a next step. A lead becomes an opportunity when it passes qualification.

Does every deal have to go through every stage?

Ideally, yes. Small deals sometimes move through two stages in one meeting, but record each move anyway. Skipped stages make conversion rates and cycle times hard to read.

How long should a deal stay in each stage?

It depends on your sales cycle. Measure how long won deals typically spend in each stage, and treat any deal sitting much longer than that as stalled rather than slow.

Try it on your own pipeline

Recordbook is free to start. Every feature is on every plan, and adding your team or your partners costs nothing extra. Create your free workspace.