Marketers and salespeople feel guilty about using jargon and these words mutually. It happens, but to be the best in your industry and ensure you know your stuff, you must clearly understand your processes and what they mean for your business.
For example, take your sales pipeline and your sales funnel. They sound similar and serve similar purposes, but they are very different. Let’s explore each of them and what they do and discover the differences to ensure we know exactly what we are discussing to secure the best results.
What is a Sales Funnel?
A sales funnel is the process of turning a cold prospect into a hot lead. It visually represents your prospect’s journey from the first contact until the purchase is completed.
The sales funnel’s structure is widest at the top, which shows low awareness, and narrower at the bottom, where awareness is high. As prospects progress through the funnel, unqualified leads who are not a good fit for your offer drop out, and qualified leads move to the next stage.
Stages of Sales Funnel
- Awareness – At this stage, the prospect seeks resources to understand the problem better.
- Consideration or researching solutions – They’ve defined the problem and are looking for possible solutions.
- Decision – The prospect has defined the problem, knows the existing solutions and is ready to make decisions.
Also Read: A Complete Guide to Understanding Stages of Sales Pipeline
What is a Sales Pipeline?
A sales pipeline offers a holistic picture of your sales process. It enables your sales team to organize and manage the entire sales process. With a pipeline, marketing teams and sales reps can guess revenue by identifying the stages where opportunities lie and predict how many prospects will become customers during a defined timeframe.
When prospects complete a pipeline stage, they move to the next step until they become customers. Sometimes, a prospect may skip several stages in your pipeline and move from initial contact to interacting with a decision-maker in your company. As the sales cycle and process differ across companies, your sales pipeline should be unique and represent the buyer’s journey.
Stages of a Sales Pipeline
- Prospecting: Use lead-generation techniques to fill the pipeline with opportunities.
- Qualifying Leads: Ask questions to ensure the lead has the need, budget, and authority to buy soon; if they do, they become prospects.
- Sales Qualified Meeting: Schedule a telephone or in-person meeting to begin the conversation.
- Make an Offer: Send the prospect a detailed quote outlining what will be provided, at what cost, and the timeframe.
- Finalize Proposal: Negotiate with the prospect of the sale.
- Closing the Deal: Agree on and sign the final contract with the now-customer.
- Deliver the Product: The customer receives the items for their promo need.
Why Do You Need a Sales Pipeline?
The Harvard Business Review states that companies with effective sales pipeline management have an average growth rate of 15% increase.
1. Targeted resource allocations
When you know which pipeline stage the prospect is at, allocating resources becomes very easy and efficient. Sales managers make decisions about new goals, opportunities, and individual targets that require more resources to close or that need more oversight.
2. Improved tracking
With a sales pipeline, team members can track pipeline deals in real-time throughout the year’s sales cycle. The data helps managers understand the volume of new and duplicate business the team generates. It also decides if you need to hire additional sales reps to meet demand and if you’ll meet your sales goals for the year.
3. Accurate sales
The company needs a tool to determine revenue monthly, quarterly and annually. A sales pipeline shows areas of your sales close to the portion and weak points far behind. The data helps you determine holes in your pipeline to adjust your sales strategy and reach your financial goals.
Let’s understand this concept more by an example:-
When a sales rep says a ‘lead’ is stuck in the pipeline, they understand that a prospect needs a little force to move them to the next stage. It could be a proposal or initiating contact. However, a prospect doesn’t “get stuck” in the sales funnel because the funnel stages represent how successful or unsuccessful a prospect converts from the point of initial contact to decision-making. If you want to identify drop-off points through year-to-year, the sales funnel shows where deals fail and helps your sales team brainstorm solutions.
Also Read: 8 Effective Tips for Managing Your Sales Pipeline Tracking
Sales Pipeline VS Sales Funnel
Knowing whether your sales strategy will benefit from one option or integrating both is important. The choice you make depends on what your sales process needs. For brands with a high-value product that requires a complex sales process, a pipeline streamlines your efforts. A pipeline helps new sales reps quickly understand your sales strategy and track opportunities that may take longer to progress.
However, a funnel could better fit your team if your company focuses on B2C or you have a shorter sales cycle. Focusing on conversion rate helps team members identify and reduce problems while establishing a success metric for each funnel stage. For instance, if you notice lower conversion from the lead qualification stage to the proposal stage, you’ll want to review your lead qualification process.
Conversely, if you have trouble booking meetings with qualified leads, you may need to adjust your sales qualifiers. Increase your efforts through activities like content marketing to drive more qualified leads into your sales pipeline rather than general prospecting. So, now you have to understand whether the Sales pipeline or Sales Funnel will benefit your business.
But can you use the sales pipeline and sales funnel together? You can integrate the sales pipeline and sales funnel for sustainable business success. Putting the sales pipeline and funnel together will offer valuable insight into how your sales strategies can evolve for higher conversion and close rates. Using both sales visualizations enables the sales team to identify if your sales process needs more steps or less. Sales reps can squeeze the sales process into multiple stages, such as product demos, reviewing proposals, identifying decision-makers, and having more sales meetings with leads.
This leads us to another big question. How do you combine both a sales pipeline and a sales funnel?
On the other hand, a B2B sales pipeline focuses on the internal actions leading up to the sale, such as the activities of the Sales Development Representatives (SDR) that aid lead conversion.
In a nutshell, they both play a part in making a sale, albeit via different routes.
- Sales Funnel Flow: Awareness -> Interest -> Evaluation-> Engagement -> Purchase -> Loyalty
- Sales Pipeline Flow: Prospecting -> Lead Generation -> Lead Qualification -> Lead Nurturing -> Pitching -> Negotiation -> Closing Deals -> Client Onboarding
A sales CRM simplifies the process for you. The built-in lead gen tracker automates the movement of leads through the pipeline. You can also track performance at each pipeline stage, monitor growth, and adjust the sales process when needed.
FunnL is among the best and fastest-growing B2B sales qualified meeting generation firms. It transforms sales funnels and supports businesses at every stage of the pipeline.
Schedule your sales qualified meetings today to transform your B2B lead generation, maximize your presence, and modify your sales process!
