Sales Funnel

Definition

A sales funnel illustrates the structured journey prospects take from initial awareness to making a purchase. Businesses use this model to understand, track, and optimise how leads move through distinct stages of engagement. It helps clarify where prospects may drop off and where marketing or sales efforts should focus to increase conversions.

Why Use

• Predict sales outcomes and allocate resources efficiently.
• Identify points where leads lose interest or leave.
• Optimise marketing strategies for better lead nurturing.
• Improve conversion rates at each funnel stage.

Core Concepts

• Stages: awareness, interest, decision, action.
• Lead qualification: assessing prospect readiness.
• Conversion rate: tracking movement between stages.
• Lead nurturing: building relationships with prospects.

Examples

Scenario 1: A software company uses a sales funnel to guide website visitors, offering free trials to convert them into paying users.

Scenario 2: An agency identifies higher drop-off at the interest stage, so it provides targeted demos to increase progression to the decision phase.

Common Pitfalls

• Focusing only on the final sale, neglecting earlier stages.
• Ignoring follow-up with leads who hesitate or leave.
• Failing to adapt strategies as customer behaviour changes.

See Also

Related terms worth exploring include customer journey, lead qualification, conversion rate, and lead nurturing.