Wondering what the difference is between a sales pipeline and a sales funnel?
You're not alone! A lot of people are confused about the two and for a good reason. They both have to do with sales, after all. But there are some key differences that set them apart.
In this article, we'll break down everything you need to know about sales pipelines and sales funnels.
We'll also give you tips on how to improve your own pipeline/funnel conversion rates and discuss how to choose the right tool for you based on your needs. So read on!
Sales Pipeline vs. Sales Funnel
It's easy to get confused about sales pipelines and sales funnels. Both sales pipelines and sales funnels are used in marketing and sales, yet they both represent incredibly different concepts within these fields.
Let's take a look at the definition of each term before we dive into how they're used by businesses today.
What Is a Sales Pipeline?
A sales pipeline represents the series of stages that a prospect goes through as they transition from being a new lead to becoming a customer.
The sales pipeline represents the different stages that you move your leads through during the sales process. It can be thought of as the process or journey that takes place during each sale.
Pipelines are often represented visually in your CRM system, with each pipeline stage representing where someone is currently at in their buying journey. The premise of the sales pipeline gives sales leaders a visual of the different stages of the sales process. This can help them better understand when a prospect becomes a qualified lead, as well as whether or not they should follow up with said lead.
How You can Utilize Pulse to Build Visual Sales Pipelines
What Is a Sales Funnel?
A sales funnel is the entire journey that a person takes to buy your product or service and it moves them through the steps of becoming a loyal customer.
A sales funnel can be thought of as the whole customer journey that someone takes from being a prospect to becoming a customer. Unlike pipelines, which are concerned with the stages of the sale process, funnels are about the broad stages a person moves through during the sales process.
Funnels can be represented visually as well, but they often look different than pipelines. They usually have more steps and are narrower in scope, like a funnel, meaning it gets widest at the top and narrowest at the bottom.
This is because each stage of the funnel pushes your prospects into the next stage and drops those that are not a fit for what you offer.
How Are They Different?
There is one key difference between a sales funnel and a sales pipeline: sales funnels focus on the steps that take place during a sale, while sales pipelines focus on the stages of the process from start to finish, including all possible outcomes.
By observing this distinction, you can begin to recognize the strategic disposition of the sales pipeline, as well as how the tactical approach of the sales funnel feeds into it. Pipelines give you a bird's eye view of the detailed processes, whereas sales funnel reports show you what's happening at a broad scale.
Sales pipeline reports show lead activity during the sales process, which helps sales teams determine where to focus more resources for higher conversion rates.
Your business will need both.
Sales pipelines will help you track the progress of each of your leads and what needs to happen next in the sales process.
Sales funnels will help you track the results of your overall marketing and sales efforts.
What Are the Different Stages of Sales Funnel vs Pipeline?
The sales pipeline is made up of the different stages that a sale goes through, which can vary depending on your business. Typically, there are five stages in a sales pipeline:
Stages of a Sales Pipeline
1. Prospecting: Prospecting is the process of finding prospective buyers who need what you’re selling. This is the stage where you identify your sales target market and define who they are. It's important to know their needs so that you can tailor your offering accordingly. Your main goal in prospecting is to find potential customers who are interested in what you have to offer.
2. Qualification: The salesperson inquires about the prospect's needs, budget, and authority to buy by identifying decision-makers to see if they qualify. This is the stage where the sales reps determine if the prospect meets all of the criteria for your offering.
The process of qualifying leads is important because it helps you determine if the prospect is a good fit for your product or service. The qualification will also help you avoid wasting time and resources on prospects that are not qualified to buy from you at this time, which can be frustrating as well as costly.
3. Proposal: The proposal stage is where the sales reps present a sales proposal to a qualified lead, which includes details on how your product/service can help solve their problems. Sales representatives send the prospect a detailed quote laying out what will be provided, at what cost, and the length of the contract. The goal here is not only to get prospects excited about what you're offering, but also to convince them that what you’re offering is worth paying for.
4. Closing: The sales rep and prospect discuss the proposal and make a purchase decision – if this doesn't happen right away, then follow-up communication will be necessary until both parties agree on the terms of sale. A successfully closed sale’s negotiations have been completed with all contracts signed. Throughout this process, the prospect officially becomes a paying customer.
5. Fulfillment and Exceptional Service Delivery: This is the stage where you deliver your product or service and make sure everything is up to par with what was agreed upon. It's important to have a good system in place for tracking customer satisfaction so you can make any necessary adjustments along the way.
The goal here is customer retention, or to ensure that the customer is happy with their purchase and feels like they got what they paid for.
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Stages of a Sales Funnel
The sales funnel is made up of these stages: Awareness, Interest, Desire, and Action.
1. Awareness: The awareness stage is where a prospect first becomes aware of your product or service. They may not even know that they need it yet, but they start to become interested in what you have to offer.
The goal here is to get their attention and make them aware of your product/service so they'll consider buying it in the future.
Here are some innovative marketing strategies that can help increase brand awareness:
- Social media posts
- Videos
- Research
- E-books
- Webinars
- Infographics
- Guest posting or guest podcasting
- In-person events
2. Interest: Once the prospect is aware of your product or service, they'll start to become interested in it. They may not be ready to buy yet, but they'll want to learn more about what you have to offer.
Prospects may comb through your social media feeds and websites to learn more on how you can benefit their lives. By creating the right content, you can help educate your prospects and move them further down the funnel.
The goal here is to generate interest and get them thinking about buying your product/service.
Here are some content formats that can pique your prospects’ interest:
- Blog posts
- Social media accounts
- Free trials
- Tutorials
- Email campaign
Creating highly relevant content will help them see how it can solve their problem, and they'll be more likely to buy your product or service.
3. Desire: The prospect is now ready to buy. They've had an opportunity to learn about your product or service and decided that it's worth investing in.
A potential customer at this stage has determined which options are most appealing to them and are now ready to make a decision. The prospect is now ready to buy, and he or she might be considering two or three options (including you).
Since they still have more than one solution in mind, you have to play your best card and lead them towards your product/service. You can easily entice these leads by offering them unique discounts, free shipping, or gifts.
This stage of the sales funnel is where you want to make sure everything is set up properly. This ensures that your prospects can move forward with their purchase decision without any issues from start to finish!
4. Action: This is the stage where a prospect finally buys your product or service and becomes a customer. The prospect has now taken action and has become a paying customer. Congratulations! You've successfully closed a sale.
Now it's important to follow through on your end of the deal and make sure they're happy with their purchase.
The sales funnel process is complete!
However, this doesn't mean the sales process is over. There may be some post-purchase communication that needs to take place in order to ensure customer satisfaction.
Customer retention is very important, so make sure you stay in touch and continue providing value.
Here are some common ways to keep customers satisfied:
- Regular communication (checking in, sending updates, etc.)
- Make it easy for them to contact you if there are any problems or concerns
- Offer a money-back guarantee
- Make sure the product or service is up to par with their expectations Provide excellent customer service
The sales funnel is a great way to visualize the buying process and understand what stages prospects go through before they become paying customers. It's also a helpful tool for improving your marketing strategy so you can generate more leads, convert them into customers, and keep them coming back for more!
Tips for Improving Your Sales Pipeline/Sales Funnel Conversion Rate
The sales pipeline and funnel are great ways to visualize the buying process. But what if you're not getting enough leads, or they aren't converting into customers?
How can you improve your sales strategy processes in order to get more sales?
Here are some tips that will help:
- Create content that will pique their interest in your product or service
- Run ads on social media channels like Facebook and Instagram
- Host webinars with relevant topics to generate qualified leads (and get them into your pipeline!)
- Use email marketing campaigns as part of a sales funnel strategy
- Generate qualified leads through content downloads
- Provide free trials or demos of your product/service
- Make it easy for your sales prospects to buy from you
- Offer unique discounts, free shipping, or gifts
- Make sure the customer is happy with their purchase and follow through on your end of the deal.
Customer retention is key!
The sales funnel is a great way to visualize the buying process and understand where prospects are in their journey towards becoming customers. It's also a helpful tool for improving your marketing strategy so you can generate more leads, convert them into customers, and keep them coming back for more!
The sales pipeline, on the other hand, is a sales process that includes all the steps you take to move prospects from one sales stage of your sales funnel (lead generation) to customer acquisition and retention.
The sales pipeline and funnel can be useful tools for your business, but you need to make sure they're properly optimized. Automation tools such as Pulse will help you optimize these processes so they're more efficient and effective.
When you use Pulse, we remove all of the technical headaches of setting this up. Pulse makes it easy to add UTM tracking to your CRM, and our team can assist you with the process.
Of course, you'll also get access to all other great features, such as CRM, email marketing, and much more. Give Pulse a try for free today.
Conclusion
Sales pipelines and funnels are essential for sales teams, and they will help you and your team close more sales. By understanding the different stages of the pipeline and funnel, as well as some tips for improving quantity and conversion rates, you can start seeing more success with your sales efforts.
If you’re looking for a tool that can help you manage your sales pipeline or funnel, we offer a variety of solutions to fit your needs. Request a demo today to see how our software can help increase your sales conversions.
