Guide to a killer sales funnel

The sales process is not a straight line. This is why converting a lead to customer often takes its own course, and varies with business. Whether B2B or B2C sales, it’s important for sales reps to understand and visualize a lead’s journey; otherwise, they’re shooting in the dark. This is done by a series of steps which develops into what’s called the sales funnel—a concept that finds its way back to the 1890s.

Here you’ll find the answers to all your sales funnel questions—including why you need one, and how the right sales funnel management software improves the efficiency of your sales process to convert more leads to customers.

What is the sales funnel?

Sales funnel is an illustration of the stages that a prospect goes through before becoming a customer. It describes the part of the sales process where prospects who enter the funnel are nurtured through each stage before making the ultimate purchase decision.

The number and name of each stage may vary based on business type and sales process. But what the sales funnel represents is straightforward. You start with a lot of prospects who know your business. Sales reps qualify those prospects, and out of those, only some will proceed to the next stage to have a conversation with you. As sales reps continue to nurture leads towards the close, they trickle down the funnel until you’re left with actual customers.


Sales funnel vs. Sales pipeline

Sales funnel and sales pipeline are often misunderstood to be the same thing. Like, two sides of the same coin carrying the same value but different design. Except not. Sales funnel and sales pipeline are discrete, both in data and the representation of the data. Sales funnel is about leads. Sales pipeline is about deals.

Sales funnel is the stages in the sales process your leads go through before becoming customers. Whereas, sales pipeline comprises of every stage in your sales process a sales rep takes to move a deal from start to close. Ideally, your sales process should align with the buyer’s journey.


Then, what’s the buyer’s journey?

Sales funnel and buyer’s journey are the two sides to the buying process. The buyer’s journey is the process buyers go through before purchase. This journey is from the point of view of the buyer, not the seller as in the sales funnel. It’s typically broken down into three stages:

  • Awareness: Buyer becomes aware of their problem or issue. They look for solutions, discover products or services, and pursue opportunities.
  • Consideration: Buyer evaluates different products to address challenges, and engages with sellers.
  • Decision: Buyer decides on the solution for his needs.

Although sales funnel and buyer’s journey have distinct differences, the two concepts overlap when the buyer enters the consideration stage and is ready to convert. It’s at this stage that the buyer enters the sales funnel of the seller.

Breaking down the sales funnel

A lead looking to buy your product enters the sales funnel but may or may not pass through each stage. Let’s look into how sales teams approach leads in each stage of a well-defined sales funnel, and why conversion rates matter at each stage.

1. Qualify

Sales teams are almost always urged to qualify leads before fully pursuing them. Qualifying leads accurately in this stage establishes an effective sales process. Reps use the BANT technique to determine if leads have the budget, need, authority and timeline to purchase. Only leads that meet the qualification criteria become potential opportunities and trickle down. Pushing leads without proper qualification into the sales funnel will clog your sales cycle, and won’t necessarily lead to revenue.

2. Meet

Sales reps further qualify leads for sales opportunity by setting up a call, meeting or demo. It is this stage that’s crucial for sales teams to impress a lead to convert. Here the lead discovers more about the your services and the benefits of working with you. If they determine you’re right for their needs, they proceed to the next stage, and considered an opportunity.

3. Propose

The penultimate stage of the sales process is working out the fine details and establishing a commitment to the deal. Once the lead is ready to make a purchase, sales reps present proposal, terms of contract, and other agreements to successfully win their business. The outcome of the opportunity may sway either way— win or loss—depending on the prospect’s interests at this stage. Although sales reps set the table for success, when it comes to closing—win rates are quite unpredictable.

4. Close

The final stage is closing the opportunity in your pipeline. Your prospect either turns into a customer or simply leaves the pipeline as a lost opportunity. If the deal is won, you move the deal to the won stage in the pipeline and begin onboarding your new customer. Some deals may slip through the cracks for reasons that are beyond the control of your sales techniques, like budget constraints. It is important to keep a record of your lost deals too so you can track the reasons why you lost them, and nurture those prospects in the future to win back their business and relationship.

How to manage the sales funnel?

The sales funnel simply depicts how leads traverse through your sales process from start to close. It’s only a visual representation of the numbers game in the form of a funnel; there’s more than meets the eye. If you analyse the number of leads who enter your funnel and the number who convert to customers, more than likely you’ll find there’s a huge dip. Sometimes prospects drop out of the sides of your funnel when their needs don’t match your services. While it’s nearly impossible to retain every prospect who enters your funnel, it’s however important for your sales team to make efforts to retain the ones who are ready to buy.

But, given the volume of leads that fill your funnel, sales teams have a hard time converting leads into customers because they cannot discern the hot from the cold. This results in unqualified hot leads in the top of the funnel that either drop out due to slow response times, or remain stuck in the middle of the funnel eventually becoming cold leads. For a business this means missing out on golden ($) opportunities. And, that’s just one leak. There are more ways you lose leads in the sales funnel.

How can you spot and stop the leaks to take advantage of all the potential revenue in your funnel? Make use of a sales funnel software. You can qualify leads, track their activity at every stage of the buyer journey, and follow-up automatically at the right time.

What’s a sales funnel management software?

The goal of a sales funnel software is to help you convert leads into paying customers. You’re probably thinking, "where will I find a software to manage my sales funnel?"

Well, this is a software you most likely are already aware of, but may not have viewed it as a software to also manage your sales funnel. We’re talking about the Customer Relationship Management (CRM) software.

Adopting a CRM positively impacts sales teams’ performance. But, what most users miss to realize is that CRM software is not just a customer database; it’s also the most beneficial tool for managing the sales funnel and pipeline. CRM helps you define your sales process, identify leaks in the sales funnel, and streamline the conversion process to bring leads down to the bottom of the funnel.

How to manage and measure the sales funnel using CRM software?

From defining your funnel stages to automating emails, you can setup your CRM to help your salespeople advance their leads and stop them from leaking out of the sales funnel.

Organize leads entering the funnel

One of the ways CRM will speed up the sales process is by helping you organize data. A good CRM is broken down into modules for managing leads, customers and opportunities.

Capturing leads is the first step to the sales process. Some CRMs have the capability to capture leads who visit your website, submit a form, email your company, etc. So it’s easier for sales reps to start working with leads instead of wasting time on data entry. CRM can also segment leads based on predefined criteria and assign them to the right sales reps.


When a lead enters the CRM, it’s marked “new”. Every lead in this stage is in the top of the funnel. As sales reps interact with leads, they’re subsequently moved to the next stages. Filters and views in the CRM reveals the number of leads at every stage in the sales funnel to help you analyze their progress—how many new leads are in the funnel, how many have engaged with sales reps, how many are in the bottom of the funnel and ready to close, and how many need to be nurtured. This knowledge about your sales funnel becomes an actionable tool allowing you to plan your sales strategies.

Qualify leads in the funnel

We can’t stress this enough—the biggest challenge for a sales rep is to be able to identify qualified sales leads. Experienced sales reps probably know how to qualify their leads over time, and therefore effectively work on the right opportunities. But for the rest of them, this is still a burning issue. The struggle to pick out qualified leads in the funnel forces sales reps to chase them all. The result—getting nowhere.

CRMs these days are smart. Thanks to AI, they can qualify the leads for you based on the lead’s property, interest and behavior; saving you time and energy from scrambling inside the funnel. AI-powered CRM software helps sales reps identify hot, warm and cold leads by creating an effective lead scoring system.


You can configure the lead scoring rules to match your ideal buyer persona by simply adding or subtracting points for the lead property. For example, if your business is purely local, then for a lead to become your customer the minimum criteria is to be within your service area. Add 20 points. If the lead doesn’t belong to an industry you serve, subtract 10 points. In addition to that, you can also customize scores for email, application and web activity. Bring everything together, and you have a list of hot, warm and cold leads in the sales funnel for your sales reps to focus and close more deals faster.

Track leads through the funnel

Now that leads can be organized and scored in your CRM, the next step for sales reps will be to reach out to the priority leads over phone or email. Tracking conversations—when was the last email or phone conversation, what did you speak, did they read your email—is an advantageous feature to know how to strategically plan your next course of action.

But if you still use separate tools to email and call your leads, then visibility into their different touchpoints at different stages in the funnel can be difficult to figure out. Use a CRM software with built-in email and phone instead. You can create email templates in your CRM to quickly reach out to leads. Even better, you can automate sending out the first welcome email to new leads using workflows. Modern CRMs also track your emails and notify you when the lead opens your email. This is a nifty feature to know when to take action and move your lead to the next stage. You know, strike while the iron is hot? So now you’ll know if your email is getting read or not. You can also use email metrics to test your email performance, and craft better ones to increase open rates.


Phone is still an effective tool for sales reps to sell. And, a phone in your CRM means your sales team can capitalize on this feature to call leads without any hassle. A productive CRM allows you to make calls in a single click, auto-logs and records calls, and transfer calls to other agents without the need for wires or third-party tools.

Automatically move leads down the funnel

A good practice when managing your sales funnel in a CRM is to be consistent in updating the lead stage. As leads progress down the funnel, you must be able to analyze the number of leads by stage in order to ensure your funnel is always full to the brim with leads. It’s also important to know what stage each lead is at to know what to do next. So once the lead has been contacted, move the lead from new to contacted stage. Actually, the CRM can move it down the funnel automatically.

Let’s be clear—leads won’t automatically move down the funnel. Sales reps have to continue to do their part of selling and allow the CRM to update the lead’s stage in the funnel by completing certain actions. You can setup workflow automations in the CRM to change lead stages. For example, after you’ve contacted a lead, the CRM will automatically update the lead’s stage based on the last activity.

Remembering to update the sales stage can be dicey. So make use of the CRM software to fill the gaps with automations rather than relying on mental ability. You can also set up task reminders to actively follow-up with a lead.

Add opportunities to the pipeline

After you’ve met or spoken to the lead, and if they’re committed to buy, you’ll have to quantify the value of the opportunity. This is where the sales pipeline in CRM helps; you can track each opportunity with maximum visibility. Visual sales pipeline provides an overview of your deals by stage, allowing you to see how leads are moving down the sales funnel. It also gives sales reps a quick estimate of their targets, and urges them to close more leads in the funnel.

Nurture leads in the funnel

You must know by now that the sales funnel defies gravity. Not every lead who enters your funnel finds their way to the bottom. Sometimes, even all the qualified leads don’t reach the bottom of the funnel. This can be due to the negligence of sales reps to engage with the lead, or simply because the lead is not ready to take the next step. It’s important for sales reps not to perceive a qualified lead leaving the funnel at any point as a lost opportunity. CRM helps you win back lost opportunities through lead nurturing.

Lead nurturing is the process of actively engaging with leads via email campaigns. By interacting with leads, whether top, middle or bottom, with relevant nurturing campaigns you keep them interested and groom them into paying customers. With CRM software, you can utilize tools like sales campaigns to be in contact with leads from the time they enter your funnel to when they make a purchase. Send out scheduled emails based on lead’s behavior, use templates, and track the performance of every campaign in the CRM to turn your prospects into customers.

Sales funnel metrics to track in your CRM

Tracking KPIs and conversion rate at every stage is important for sales teams to get a clear picture of the sales funnel. With a holistic sales management software like CRM, you can easily track sales funnel metrics.

Here are some of the key metrics that you can track in a good sales CRM.

Ultimately, the sales funnel is comprised of leads. So tracking the number of leads you receive in a period of time is essential to know the health of your sales funnel. Additionally, know the volume of leads generated by source to see where your best leads are coming from so you can steer your marketing efforts accordingly.

Converted Leads

Measuring how well your sales team is converting leads is imperative to determine the quality of leads and individual sales rep’s performance. With a CRM, you can create reports to know how your leads are converting through different stages by sales reps, and by campaign too. Analyzing which leads are moving down the funnel and converting allows you to plan better conversion strategies.


As your sales reps qualify leads and identify opportunities, they’ll create an opportunity, aka deal in the CRM. Sales managers want to know the value of each deal and total deals by stage to prioritize the team’s efforts on high-value deals. In addition to this data being available in the CRM’s visual sales pipeline, you can also create detailed reports to further analyze deals, and add them to a dashboard to actively monitor their progress.

Sales cycle length

This metric denotes the time it takes to convert a lead from the first contact to purchase. In other words, it tells you how long a sales rep spends to close an opportunity. Drilling into this critical metric reveals the effectiveness of your sales team, and helps you identify any barriers in your sales process. After all, the shorter the sales cycle length, the faster your revenue stream.

Convert leads into sales. Use Freshsales CRM for your sales funnel management.

Freshsales is a full-fledged CRM software designed for sales teams to manage leads from start to close. It handles every step of the sales funnel allowing you to focus on the right leads at the right time. You get complete visibility into your funnel—from real-time insights on lead behavior to how quickly your team converts leads to sales. Freshsales comes with built-in phone, email and reporting. This means all of your customer data is accessible in one place. To add to that, you can automate tasks, create your sales pipeline, and schedule sales campaigns. Every tool you need to advance leads in your sales funnel is already in Freshsales! Get your free 30-day trial, and discover new ways to convert more leads into customers.

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