The Sales Funnel

Keeping control of your sales pipeline.

With the idea of the Sales Funnel, one uses the metaphor of a funnel (wide at the top, narrow at the bottom) to monitor the sales process.

At the top of the funnel are the "unqualified prospects" - the very many people who might need your product or service, but to whom you've never spoken. At the bottom of the funnel, many sales and delivery steps later, you have people who have received delivery of your product or service and have paid for it.

The metaphor of the funnel is used because people drop away at each stage of a long sales process: For example, many of your unqualified prospects may have existing suppliers with whom they're very satisfied. Others may have needs which other competitors are better-placed to satisfy. Still others may love your products, but not have the budget to buy them.

The sales funnel is not a new tool for the management of the sales process. Most sales managers use it to understand the sales pipeline and its status. However, the sales funnel can be an important tool in improving performance. It can help us identify areas for improvement and understand what actions can help the sales and marketing process to both increase deal flow and lower the cost of sales. Different sales executives define the sales funnel in different ways.

Sales and marketing management can be more of a science and using the sales funnel can help us understand what is happening, and why and how we can improve the processes. The results can increase revenue while lowering the cost of sales.
(Image source: Seanseo.com)