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Sales Funnel vs Sales Pipeline: Key Differences

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Sales funnel and sales pipeline are two of the most used and confused marketing terms and sales. But what occurs when you confuse this one term with the other? First, it will create confusion both among your team and customers. Second, it will result in missed opportunities. When you aren’t sure about a prospect’s position in the funnel, you’ll miss chances to look after or close them. Lastly, it will affect your revenue because when your sales funnel is not well-aligned with your sales pipeline, you’ll be losing your potential revenue. To avoid this situation read my blog-” Sales Funnel vs Sales Pipeline: Key Differences”.

What is a Sales Funnel?

A sales funnel is the path that your prospects take to finally become your customers. It is known as a funnel because visually it will look similar to a funnel. The widest at the top with a larger number of prospects, then gradually decreasing the number to each phase, and the narrowest at the bottom with a small number of paying customers.

Generally, a sales funnel has four stages:

  • Awareness
  • Interest
  • Consideration and Evaluation
  • Decision

Similar to the pipeline, salespeople also use it to recognize and rate prospects and guide them accordingly through each step. The organizations with the best revenues utilize this information to develop their actions at every stage to take more potential customers through this funnel and increase the customer journey.

  • Awareness: This is the stage where potential customers become aware of your product or service. At this stage, the customer may have a problem or need that they are looking to solve, and they become aware of your product as a potential solution.
  • Interest: Once a potential customer is aware of your product or service, they may become interested in learning more about it. At this stage, the customer is evaluating your product and deciding if it’s a good fit for their needs.
  • Action: The final stage of the sales funnel is when the potential customer takes action and makes a purchase. At this point, the customer has made the decision to buy and is ready to complete the transaction.
  • Decision: This is the stage where the potential customer is ready to make a decision about whether or not to purchase your product or service. At this stage, the customer has likely done their research and is weighing the pros and cons of making a purchase

What is a Sales Pipeline?

If you want to get a brief idea of the sales funnel and a complete idea of the sales pipeline and the importance of the sales pipeline in digital marketing, please read this blog,” Why is Sales Pipeline Important in Digital Marketing?”

  • Lead Generation: This is the stage where you identify potential customers who may be interested in your product or service. This could be through advertising, content marketing, cold calling, or any other method of outreach.

Here are some popular methods marketers and sales team use to qualified leads:

  • Questionnaires.
  • Surveys.
  • Opt-in forms.

Qualifying leads will help boost your average conversion rates as it’ll save you time and effort from pursuing poor-fit leads.

  • Prospecting: Once you’ve generated a lead, the next stage is to determine if they are a good fit for your product or service. This involves researching the lead and understanding their needs, pain points, and budget.
  • Qualification: If the lead is a good fit, the next qualification stage is to qualify them. This involves determining if they have the authority to make a purchase decision, if they have a need for your product or service, and if they have the budget to afford it.
  • Proposal: Once the lead has been qualified, you’ll need to create a proposal that outlines your product or service and how it can benefit the customer. This proposal should address the customer’s pain points and show how your solution can solve their problems.
  • Closing: The final stage of the sales pipeline is closing the deal. This involves negotiating the terms of the sale, addressing any objections the customer may have, and finalizing the sale.

Distinction Between Sales Funnel and Sales Pipeline

Now, let’s get into our main topic. The sales funnel generally has four stages but these stages can be divided into further parts as the following image shows. Suppose, your customer will become aware of your product/service, they will become interested in your product/service, it will create an intent in them, and they will evaluate that intent and make a purchasing decision. If they like your product/service, they will become your loyal customers. 

Similarly, the sales pipeline has six stages according to this image. These steps can also be divided into further stages such as before contact, you’ll generate leads, then contact them, qualify the leads, meet them, propose them, close the deals, and then you’ll try to retain your existing customers. Thus, you can say that the sales pipeline management has seven stages.

What are sales funnel and pipeline stages?

Difference between these two terms:

Point of DifferenceSales FunnelSales Pipeline
1. DefinitionA sales funnel is the path that your prospects take to finally become your customers.A sales pipeline indicates a metric or strategy or way to keep track of your prospects along with their movement through the different phases of the buyer’s journey.
2. ExhibitionIt exhibits valuable information about the size of open deals at a certain period.It exhibits the number, value, and phases of different open deals.
3. InterestIts interest is in the numbers.Its interest is in the process.
4. MeasurementIt measures your lead generation efforts’ efficiency.It measures your lead’s quality that you attract to the pipeline.
5. TrackingIt tracks lead conversions based on stages.It tracks your active leads at various phases of the pipeline.
6. FocusQuota and performance-oriented.Value and activity-oriented.
7. ReportingSales funnel report depicts conversion rates in the sales procedure. The sales team utilizes the information to develop each stage of the sales process and avoid leakage in the sales funnel.Sales pipeline report depicts lead activity throughout the sales process to let sales team decide where they should focus on increased resources to get improved conversion rates.
8. Representation of the Buyer JourneyFrom the customer’s point of view.From the sales representative’s point of view.
9. ProcessIt involves the companies’ classification into groups, records the last contact’s details, and uses tags to decide the forthcoming actions.It involves using the processes, plans, milestones, and actions fixed by the management of the sales pipeline for forthcoming actions.
10. AppearanceIt looks like a funnel.It looks like a pipeline.
11. CustomizationStages can’t be modified.Stages can be customized to match the customer base or sales representative’s needs.
12. Non-Linear vs. LinearNon-linear. Potential customers can move back or forward based on their decisions.Linear. Potential customers can just be moved forth.

So, this is how the sales funnel is different from the sales pipeline.

Do I Need Sales Pipeline or Sales Funnel?

Both a sales pipeline and a sales funnel are important tools for managing and optimizing your sales process. A sales pipeline helps you track the progress of each deal through stages like “prospecting,” “qualifying,” “meeting,” “proposal,” and “closed-won.” A sales funnel, on the other hand, helps you understand how many leads you need to generate at the top of the funnel in order to convert a certain number of customers at the bottom of the funnel. By using both tools together, you can optimize your sales strategy at both the micro and macro levels.

Final Words:

Now, you must have understood that sales funnel and sales pipelines are not the same things from my blog -” Sales Funnel vs Sales Pipeline: Key Differences”. Still, If you have any queries, please check out the FAQ section, and for any digital marketing services, please contact digiSocial.

Frequently Asked Questions

Yes, they have a similarity. Both show the prospects’ flow through a sale.

If you divide the levels of the sales pipeline into smaller divisions, it will have seven stages in total as I have discussed while explaining the image. If you want to know details about the stages, please read the blog-” Why is Sales Pipeline Important in Digital Marketing?”

The following are some sales funnel examples:

  • Content funnel: It arranges leads created from content such as blog posts, videos, and podcasts.
  • Sales call funnel: It lets you understand how leads are created from sales calls.
  • Lead generation funnel: It shows leads and potential customers generated from each lead generation campaign.

The following are some sales pipeline examples:

  • Revenue pipeline: It exhibits the total amount of dollars of potential deals in the pipeline. 
  • Marketing and sales pipeline: It will involve marketing phases that overlap sales such as lead creation or lead qualification. 
  • Lead pipeline: It exhibits the leads still require to get qualified. 
  • Sales pipeline report examples: These reports show the sales representatives’ performance and other metrics about the sales pipeline at different stages. 
  • Post-sale pipeline: It depicts the phases after a sale such as training, delivering service, or requesting referrals.

The pipeline is the place where the leads transform into customers, and from where your chief revenue comes. Your sales and marketing pipeline means the phases that your sales representatives go through to convert leads into customers. It is different from the sales funnel because the sales pipeline summarizes all client sales funnels.

The sales funnel manages the leads from your marketing funnel attracting them to purchase, not once but every now and then. Where as the marketing funnel advertises a service or product to show leads a reason to purchase. Both your sales and marketing people need to have the best strategies and techniques to be as effective as possible.

The sales pipeline is the tool that companies utilize to take a detailed look at the actions or steps within their process of sales. This process of sales or sales process refers to the steps a sales representative follows in the sales process to convert a lead into a sale.

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