Sales Pipeline vs Sales Funnel: what’s the difference? In any firm, the importance of sales and marketing cannot be underestimated. As a result, many phrases may be thrown around with the expectation that they will be simply defined. This is not the case for most sales and marketing phrases, such as sales funnel and sales pipeline.
It’s vital to note that these terms refer to two distinct processes when discussing two core sales strategy techniques. You risk miscommunicating vital messages to your team and other departments if you start to confuse them. Learn the true meaning of the terms sales pipeline and sales funnel, as well as what they can accomplish for your department’s success…
What is Sales Pipeline?
A sales pipeline is a clear picture of where prospects are in their buyer’s journey that everyone can comprehend. It consists of five stages that represent the buyer’s journey from the standpoint of a sales representative.
Typically, you can manage a sales pipeline with a CRM like Salesforce or any other Salesforce Alternative CRM platform, which can help any sales rep organize their prospects and guide them through the buyer’s journey.
Your sales pipeline specifies the steps that your sales staff must complete in order to convert prospects into customers. Potential buyers go on to the next stage of your sales funnel once one stage is finished. A sales pipeline report will show your team how many leads are at each stage of the buyer’s journey right now.
This insight tries to better comprehend the present status of each opportunity and to inquire whether the distribution of these opportunities between pipeline stages is sufficient to create a consistently profitable outcome.
These buyer journey pillars will undoubtedly be represented in your pipeline stages if you offer a free demonstration or trial time. The sales pipeline is solely concerned with these process milestones and the number of opportunities in each stage at any one time.
What is a Sales funnel?
This is the process that a prospect goes through from the awareness stage to the point where a transaction is concluded, and it’s referred to as the sales funnel because of the funnel-like structure of the process. The sales funnel is all about figures, which are utilized to define departmental goals.
The sales funnel, like a pipeline, is divided into stages, but the objective of this model is fundamentally different. Your sales funnel is a visual representation of your conversion rate as it progresses through each important sales cycle.
It’s wide top and narrow bottom represent the disparity in numbers—you’ll undoubtedly create a large number of leads, but not all of them will be qualified, and certainly, not all of them will become customers. With each step of the buyer journey, the number of potential customers going on to the next stage decreases, and the sales funnel reflects this trend.
The stages potential customers go through, like the pipeline, are completely unique to your business procedures, though many will include the popular, common stages outlined above. Your sales funnel is focused on the figures, while your sales pipeline is focused on establishing clarity about the current lead status and optimizing processes.
A well-tuned sales staff will have advanced conversion expertise, knowing what proportion of leads will become customers.
Understanding differences between Pipeline and Funnel.
A sales pipeline examines the many stages of the sales process, from lead generation to closing the deal. It is brand-focused in that it examines the steps that your sales and marketing teams must take to convert a prospect into a client and keep them as a customer.
A sales funnel considers the entire customer experience. From the moment you become aware of a brand through the moment you make a purchase. It is customer-centric in that it considers the many stages that a customer will go through on their way to making a purchase.
Stages of the Sales pipeline
Lead Generation
This is the beginning of your sales pipeline, whether you name it the prospecting stage, lead generation stage, or even the new opportunities stage. You’re looking for new leads or opportunities at this point.
This is a stage in which leads learn about your company through marketing. You can increase your company’s visibility by using social media, advertising, and other forms of communication. You can also use targeted factors to find the ideal fit for your business.
Qualifying Lead
This is the stage in the sales process where your sales representative and prospects get to know one another. Here, the sales professional can determine whether the prospect is a good fit for your company and provide product materials such as ebooks, articles, and webinars to help the prospect better understand your products and services.
Meeting
The sales representative and the prospect debate the best solution for the prospect’s demands. In fact, this stage could include a number of contacts. Clearly a critical stage, the quantity, and quality of leads that have passed through the pipeline’s previous phases will have a direct impact on the success of sales meetings.
Proposal
You can create a case study on how your products can suit the needs of prospects once the decision-makers have been identified. You can also explain how your quote will satisfy the needs of the prospect and go above and beyond. You could also explain how this will benefit them in the long run.
Closing/Conversion
Contracts are signed after final talks. The prospect has now been converted into a paying customer. The prospect has progressed through the pipeline to become a customer at this point.
Retain
Customer retention and loyalty should be regarded as part of the sales process, despite the fact that it is frequently overlooked. While the responsibility for minimizing churn and boosting customer lifetime value will shift away from the sales team and toward client services and marketing, it is a crucial element of the journey and critical for company success.
Stages of Sales Funnel
Sales funnel phases, like sales pipeline stages, play an important role in increasing conversion rates. The sales funnels assist in measuring the conversion rate, while the sales pipelines assist in observing the actions made by the sellers.
Awareness
Prospects learn about your company or business during this stage. They are introduced to your goods or service for the first time here. This happens as a result of Google searches, social media posts, campaigns, commercials, and other forms of communication. Specifically, they may be looking for a solution or come across your offering here.
Discovery
The prospect learns more about your firm, including your products and services, during the Discovery phase. They’ve acquired an interest in your company and want to learn more about it. You can make this task easier for prospects, reach out to them more effectively, and increase brand visibility by employing educational materials.
Intent
Prospects declare their intention to make a purchase at this point. They will also assess whether or not your product or service is capable of meeting your needs. They also look to see if it fits inside their budget. A final plan is drawn up after adequate negotiation and management of objections.
Evaluation
Prospects learn about your products and look for competitors at this stage. Prospects narrow down their preferred options after careful consideration and comparison with competitors. As a next step, the researchers review sites and consult with their peers to select the best product or service.
Purchase
At this point, the goal has been met, and the prospect has moved forward with the purchase. However, this can be improved by providing a thorough onboarding process and ensuring a smooth transition.
Loyalty
It is just as important to convert a prospect into a customer as it is to turn them into loyal customers. To accomplish this, your sales and support teams must continue to provide exceptional service as well as follow-ups on a regular basis.
Why should you focus on a sales pipeline?
As a business, you must have an effective Sales pipeline tool that allows you to forecast your potential revenue on a monthly, quarterly, semi-annual, or annual basis.
A good sales pipeline will enable you to do this by highlighting areas in your sales that may be approaching quota or are weak points causing leaks in your pipeline.
Everything we do in sales revolves around sales pipeline management. Every day, your sales reps are staring at their funnels. Because it allows sales reps to stay organized and focused on selling, mastering the sales pipeline is an extremely effective way to increase revenue. This is an undeniably important part of the sales process.
Why should you optimize the sales funnel?
Understanding the concept of sales funnels is critical because it is a useful model for visualizing the customer journey from initial awareness to conversion. The sales funnel provides a useful framework for analyzing your business and identifying areas for improvement.
Using this data, the company can form a hypothesis as to why this is the case and test ideas for improving conversion rate, such as reducing form fields, establishing trust with sales, making CTAs more visible, or offering limited-time offers.
The company can work to reduce shopping cart abandonment and increase the percentage of visitors who make it through the funnel by testing these ideas through controlled A/B tests.
Conclusion
In marketing, a sales funnel is the path that a potential customer takes to make a purchase. A sales pipeline, on the other hand, is a graphical representation of how potential buyers progress through the purchasing process.
A sales pipeline is useful because it allows you to visually track potential buyers as they progress through the buying process. The historical data in these reports can also help you see how the pipeline evolves over time.
In addition, when the report is running, a sales pipeline report displays the value and quantity of all deals in each stage of the pipeline.
To outperform your competitors and increase your conversion rate, optimize your sales pipeline by knowing your audience, creating informative content, collecting email addresses, and using engaging media.
Every business must be able to optimize a sales funnel and sales pipeline. It is critical to understand the key parameters that will help your company stand out from the crowd.
By incorporating sales funnels and sales pipelines into your sales strategy, you can gain a comprehensive view of your sales process and optimize your sales strategy to meet business objectives. You can identify gaps in your business and improve team efficiency by focusing on the theoretical perspective of the sales cycle.
