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Glossary Attract more customers 2 min read

What is a sales funnel?

Sarah Impey Marketing Director and Consultant

Short answer

A sales funnel is the path people take from first hearing about your business to becoming a customer. It's called a funnel because lots of people start at the top and fewer make it to the bottom. Looking at your funnel shows you where potential customers drop out, so you know what to fix.

Also known as: Lead generation, Customer journey, Marketing qualified lead (MQL)

Contents

Why it matters

If sales are slow, the instinct is usually to get more people in at the top. More ads, more LinkedIn posts, more emails, discounts, etc etc. Sometimes that's the right call. But often the real problem is further down, and you're pouring people into a funnel with a hole in it.

Breaking the journey into stages helps you see where it's going wrong. Maybe plenty of people visit your website but hardly anyone gets in touch. Or you get lots of enquiries, but few turn into sales. Each of those points to a different fix.

It also helps you plan your marketing. People at the top need something different from people who are nearly ready to buy. A funnel reminds you to have something for both.

The usual stages

Most funnels use some version of these:

  1. Awareness. Someone finds out you exist, maybe through a Google search or a friend's recommendation.
  2. Interest. They want to know more. They read your website or follow you on your social channels.
  3. Consideration. They're weighing you up against other options. Case studies and reviews matter a lot here.
  4. Decision. They get in touch or buy something. (Hurrah!)

Some businesses add a fifth stage, often called loyalty or advocacy, for what happens after the sale.

Common mistakes

  • Only working on the top.

    More visitors won't help if they all leave at the same point. Fix the leak first.

  • Treating everyone the same.

    Someone who's just found you doesn't want a hard sell. Someone ready to buy doesn't want another blog post.

  • Not measuring anything.

    You don't need fancy software. But you do need a rough idea of how many people reach each stage.

  • Forgetting that people aren't that tidy.

    Real customers skip stages and wander back and forth. So use the funnel as a rough guide and don't worry when people go off-piste.

How to get started

  • Write down your stages. Use the ones above or adapt them to how people actually buy from you.
  • Put a rough number against each. How many website visitors, enquiries, proposals, and new customers did you get last quarter? Estimates are fine to begin with.
  • Work out the drop-off between stages. Look for the biggest gap. That's your leak.
  • Ask why people leave at that point. Talk to people who got in touch but didn't buy, if you can.
  • Try one change. It might be a clearer next step on your website, or a faster reply to enquiries. Then measure again.

FAQs

What's the difference between a sales funnel and a customer journey?

A sales funnel is mostly a numbers tool. It tracks how many people move from one stage to the next. A customer journey looks at the same path from the customer's side, including how they feel and what happens after they buy.

What's a conversion rate?

It's the percentage of people who move from one stage to the next. For example, if 1,000 people visit your website and 20 get in touch, your website's conversion rate is 2%.

Do B2B businesses have sales funnels?

Yes. In B2B (selling to other businesses), the funnel is often longer, because more people are involved in the decision. It's still the same basic idea.

Is the sales funnel outdated?

Some marketers prefer other models, like a loop or a flywheel, to show how happy customers bring in new ones. They're useful ideas. But the funnel's still a simple, handy way to spot where you're losing people.

Related terms