Funnel

What is a Sales Funnel?

A sales funnel is a visual representation of the customer journey from initial awareness to final purchase. Named because prospects "enter" at the top and "exit" at the bottom, with some dropping out at each stage, the funnel helps teams visualize, measure, and optimize their sales process.

The classic funnel consists of three sections:

• TOFU (Top of Funnel): Awareness, traffic, leads
• MOFU (Middle of Funnel): Consideration, qualification, opportunities
• BOFU (Bottom of Funnel): Decision, negotiation, close

Why the Funnel Matters

Strategic Value:

• Provides a framework for measuring sales effectiveness
• Identifies where prospects drop out
• Guides resource allocation across stages
• Creates shared language between sales and marketing

Diagnostic Power:
By tracking funnel metrics, you identify bottlenecks. Too many leads but few opportunities? Problem is in lead quality or initial qualification. Plenty of opportunities but few closes? Problem is in closing skills or product fit.

The funnel is your dashboard for sales health. In 2026, with increased emphasis on efficiency, understanding your funnel is non-negotiable.

Typical Funnel Stages

1. Awareness: Prospect discovers your company (marketing, outbound, referral)
2. Interest: Prospect engages, learns more (website visit, content download)
3. Consideration: Prospect evaluates options (demo, proposal)
4. Intent: Prospect shows buying signals (trial, pricing discussion)
5. Evaluation: Final decision process (stakeholder buy-in, contract review)
6. Purchase: Deal closes

Your specific stages may vary, but the progression from many to few remains constant.

Benchmarks

Typical Conversion Rates:

• Lead to Opportunity: 10-25%
• Opportunity to Close: 20-40%
• Overall Funnel Conversion: 2-5% (B2B), 3-10% (B2C)

By Stage:

• 1000 visitors → 100 leads (10%)
• 100 leads → 30 opportunities (30%)
• 30 opportunities → 10 customers (33%)
• 1% overall conversion

Best Practices

1. Define Your Stages Clearly: Every team member must agree on what qualifies a prospect to move between stages. Ambiguity kills forecasting.

2. Measure Stage Duration: How long do prospects sit in each stage? Long durations indicate friction or lack of urgency.

3. Identify Drop-off Points: Where do prospects exit? Focus improvement efforts on leaky stages.

4. Align Marketing and Sales: Marketing owns TOFU, sales owns BOFU. Both own MOFU. Shared goals prevent finger-pointing.

5. Track Micro-Conversions: Between major stages, track smaller actions—email opens, demo attendance, proposal acceptance. These are leading indicators.

Common Mistakes

• Funnel stages that are too vague or subjective
• Not tracking time in stage (stalled deals rot your funnel)
• Focusing only on top of funnel or bottom of funnel
• Blaming marketing for "bad leads" without qualification criteria
• Ignoring funnel metrics until quarterly disaster strikes

Key Takeaways

• The funnel visualizes the customer journey from awareness to purchase
• Track conversion rates between all stages
• Identify bottlenecks by measuring where prospects drop out
• Clear stage definitions are essential for accurate forecasting
• Optimize the entire funnel, not just individual stages