Sales Funnel vs Sales Pipeline: Which One To Use In Order To Increase Conversions?

By William Aug 17, 2023

Both sales pipeline and sales funnels refer to the process of transforming a prospect into a buyer. However, the way they do it is a bit different.

Sales funnels consist of different stages your leads go through before becoming paying customers. On the other hand, a sales pipeline consists of the steps your salesmen need to take in order to convert a lead.

So, before we go into the nitty gritty of it, let’s take a look at the definition of each process.(1)

A sales pipeline is an organized way of stages in which a prospect goes through as they become a customer.(2)

As soon as the prospect finishes a stage, they immediately move to the next one. Even though every company is different, here are the typical stages of a sales pipeline:

The first stage of the sales pipeline is meant to assess whether or not your prospect are suitable for your offer. In order to do so, you need to make sure they are actually kind of interested in your product, as well as finding out if they have enough money to pay for it.

Basically, you will need to filter out all the freebie seekers so that you don’t waste money. This is a mistake many beginners make when starting their online business.

It makes no sense to advertise to people that are just looking for free stuff. You will need to make it clear early on that you’re selling products, and not giving free value.(3)

This might seem a bit controversial, but it is a necessary step you need to take in order to keep your expenses down.

The second step of your sales pipeline is to meet your prospect face to face or over the phone. This is absolutely necessary, as it allows you to build more trust and discuss further details.

The point of this meeting is to find out what the prospect is looking for and whether or not you can offer it to them. It will be a good idea to present the advantages of working with you, as well as the quality of your products.(4)

The third stage refers to the proposal which you will send to your prospect. This is basically a “deal” that you offer where you include all the things the prospect will receive for a price that you set.

Also, if it’s a service that you’re offering, don’t forget to outline the time period in which the prospect will be able to use the service.(5)

After you send the proposal, the prospect will most likely send a counter offer and you will need to negotiate further. After you reach an agreement, you just need to sign the contract and that’s it.(6)

There are a couple of advantages when using a sales pipeline.

First of all, you will be able to effectively track your progress and filter out unwilling prospects along the way. This enables you to keep your expenses down.

Also, it allows you to focus on the leads that are actually serious and that you have a chance closing.(7)

With a sales pipeline, a manager can also track the performance of his sales team, allowing him to better understand what needs to be improved. Lastly, it allows you to set yearly goals and objectives.

While the sales pipeline focuses more on a multitude of actions that a sales team needs to take in order to close a deal, a sales funnel is an automated process that represents the average conversion rates as the leads go through a series of pages.

The name, “funnel” comes from the object you have in your kitchen that helps you pour water into a smaller recipient. That’s because the sales funnel works exactly like this.

All your prospects go through the wide end at the top and they slowly make their way down. The best part about it is that you can automate everything with a software like Kartra, so that you can focus on getting more leads.

It might not seem like much, but 10-15 years ago this was a huge challenge for entrepreneurs. You had to hire a ton of people in order to make it work. Luckily, that’s not the case anymore.(8)

We are incredibly lucky to be able to build sales funnels by ourselves because not too long ago, we has to pay thousands of dollars in order to do so.
A sales pipeline is mostly used by big companies with sales teams. It allows them to track the performance of their sales team and set goals and objectives.

On the other hand, sales funnel is more for small entrepreneurs who want to automate the sales process and make passive income. Funnels are great because you just need to put leads into the funnel and optimize it accordingly.

Basically, a sales pipeline helps you manage your sales team while the sales funnels helps you track conversions.(9)

If you don’t own a company with many employees, sales funnels are definitely better. That’s because you can do everything by yourself.

You don’t need to pay employees, make phone calls, meet with clients or close the deal. The sales funnel basically takes care of everything.

So, if you want to learn how to build a profitable sales funnel and automate your business, I highly suggest taking the OFA challenge. It’s great value for money and it has taught me more about marketing than all my college professors.

By William

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