Sales

What Are the Stages of a Construction Sales Pipeline?

July 8, 2022
Erick Vargas

The stages of a construction sales pipeline reflect each step a prospective customer takes as they move through your sales process from becoming a lead to becoming a customer.

These stages also relate to the actions sales reps should take in their interactions with potential customers as they track and manage their leads in the sales journey.

There are a variety of ways to segment your sales pipeline stages and plan corresponding actions. To determine the best stages for your construction company sales pipeline, look at the sales process your typical customers go through on their way to a sale.

Break the sales process into activities, steps you encourage the lead to take plus activities the sales rep should engage in, to move the lead to the next point. You can always tweak or change the stages in the future to better fit your specific needs.

Sales Pipeline Stages for Construction

Below are the typical stages of a construction company sales pipeline that sells to the residential market, but these stages can also work for a commercial construction firm or other contractor with minor adjustments.

Keep in mind that hot, warm, and cold leads will move through the pipeline differently. A hot lead may move from lead generation to the proposal and negotiation stage without spending time in the lead qualification or lead nurturing stages. A cold or warm lead will move through the sales pipeline slower and will probably need to spend time in the nurturing stage.

Prospecting and Lead Generation

This stage includes all of the actions a company takes to deliver their message to potential customers and includes advertising, social media posts, online blogs or newsletters that your company publishes, promotional activities like seminars and builder expos, and public relations.

Initial Contact

This is the stage where you make the first contact with a lead. It might be returning their phone call. If they have requested information by filling out a form on your website, you will send them an email thanking them for their contact and answering their request.

Your initial contact should be as soon as possible, at least the same day, if not within minutes, of the lead’s request or call.

Lead Qualification

The lead qualification stage entails making sure the lead is actually interested and willing to take the next step in the sales journey. At this stage you can offer to meet with them.

Lead Nurturing

A sales prospect enters the lead nurturing stage when they seem to have interest in your company but aren’t ready to move ahead, for instance, by scheduling an appointment.

In the lead nurturing stage you keep in touch with the lead, typically through email, continue to build a relationship, and develop their trust in your construction company. You can also offer incentives and specials or bonuses to help move them to the appointment stage.

Follow-Up

The follow-up stage will occur after the lead has been in the nurturing stage for a specified time and can repeat occasionally as the relationship continues to be cultivated. The follow-up stage involves reaching out to the lead with an incentive to encourage them to make an appointment.

Man on a sales call in an office

Appointment Set

Meeting with the prospect will allow you to gather all of the information needed to prepare a proposal or to quote the job. At this stage remember to discuss your competitive advantage with the lead to help differentiate your company or proposal from your competitors.

Your company’s advantages can include price, credentials, experience, quality materials and material upgrades, satisfied customers, and closing bonuses like a free service agreement.

Proposal Presented/Negotiation

If you don’t provide a quote at the time of the appointment you will need to prepare and present a proposal at this stage in the sales process. Once the quote or proposal has been presented, the lead may wish to negotiate on either total cost or on some aspect of the work.

Here you can discuss the job, adjust pricing, manage the lead’s expectations, come to a mutually beneficial agreement, and win the job.

Sale Qualified

This stage is typically only necessary if the lead needs to make arrangements for financing the job or there are any questions regarding the customer’s ability to pay for the work your company will do.

Opportunity Won

This is the stage where the sale has closed, you celebrate, and you make the arrangements to fulfill the contract.

Construction worker on site checking updates on his phone

Lead Lost or Removed from Pipeline

You won’t win every job, of course, and evaluation of your process can lead to productive changes that help you capture more business. In the lost lead stage, you review a lead’s status in the pipeline. Are they moving along or are they at a stand-still? Have they stopped responding? You can take action to encourage them to take the next step or you may decide to remove the lead from your sales pipeline.

Keeping you pipeline uncluttered and free of poor or lost leads with save you time and energy and keep you focused on high-quality leads.

After the Sale – Preparing for Future Success through Repeat Business and Referrals

The sale is technically closed when the contract is signed, but the post-sale stage should actually include a variety of activities. The progress of the job should be regularly monitored, and exceptional customer service should be delivered. The sales rep can explore whether the customer is interested in further or future work.

After the work is complete, the sales rep should connect with them again to make sure the customer is satisfied. This is a good time to ask the customer if there is anything the company could have done better, or what it was they especially liked about the company. This will let the customer know you care, and it is great information to make your company better in the future. This is also the time to make the customer aware of your referral program.

And if you have an automated email program, move the happy customer into a category where they will receive regular “keep in touch” emails that can be anything from wishing them happy birthday or happy holidays to sharing discount opportunities for additional work.

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