“Sales funnel” and “sales pipeline” are two terms used frequently in the world of B2B lead generation. While they’ve often been used interchangeably, it’s important to remember that these two phrases in lead gen are NOT the same.
In this blog, we’ll cover the definitions of both sales funnel and pipeline, the stages and steps involved in each, and how they can be aligned with one another for greater value and better results.
Definition of a Sales Funnel
A sales funnel, often referred to as a purchasing funnel or conversion funnel, is a conceptual model that illustrates the various stages a potential customer goes through while moving from initial awareness of a product or service to making a purchase decision.
The term “funnel” is used because the number of potential customers gradually narrows down as they progress through each stage, similar to the narrowing shape of a funnel. The main purpose of a sales funnel is to visualize and understand the customer journey and to optimize the process for maximum conversion rates.
Stages of a Sales Funnel
Awareness
The awareness stage of the sales funnel is the initial phase where potential customers become aware of a product or service’s existence through lead generation marketing efforts. It aims to capture attention, generate interest, and introduce the brand, creating a foundation for further engagement and progression through the funnel’s subsequent stages.
Interest
During the interest stage of the sales funnel, intrigued potential customers who are aware of a product or service delve deeper. They engage with content, explore features, and seek more information. This phase nurtures their curiosity, encouraging them to move forward by considering the offering more seriously in the subsequent stages.
Consideration
In the consideration stage of the sales funnel, potential customers actively evaluate the product’s value proposition. They compare it with alternatives, read reviews, and seek comprehensive details. This phase aids decision-making by helping prospects understand how the product meets their specific needs and why it’s advantageous over other options.
The first three stages of the sales funnel above also serve as each stage of the B2B lead generation and marketing funnel. For more insight into the lead generation and marketing funnel, read our blog here.
Purchase
The purchasing stage of the sales funnel marks the conversion of interested prospects into customers. After thorough evaluation, they commit to buying the product or service. This pivotal stage is where the transaction occurs, sealing the deal and initiating the transition from prospect to a paying customer.
Loyalty
The loyalty stage of the sales funnel comes after a successful purchase. Businesses focus on building strong post-purchase relationships, providing excellent customer support, and maintaining engagement. This stage aims to foster customer loyalty, encourage repeat purchases, and inspire positive word-of-mouth referrals, contributing to the brand’s long-term success.
Definition of a Sales Pipeline
A sales pipeline is a visual representation of the various stages that prospects and leads move through during the sales process, from initial contact to final purchase. It provides a structured overview of prospects’ progression, helping sales teams track and manage leads, forecast revenue, and identify areas for improvement. The pipeline aids in prioritizing efforts, optimizing conversions, and effectively managing customer interactions.
Steps to Building a Sales Pipeline
Step 1. Establish Your Lead Generation Strategy
The initial step of building a sales pipeline is establishing what lead generation strategy you want to follow, whether it’s outbound sales development, inbound marketing, or a combination of both. Furthermore, it’s examining how you want to approach these strategies. For example:
- Do you want sales development representatives (SDRs) to make cold calls? Or reach out via cold sales email?
- Do you want your inbound marketing team to prioritize an SEM-focused approach to lead generation? Or use social media as the driver to generate leads?
Whichever solution you choose, it’s important to align the selected lead generation strategy with what your ideal customer profile (ICP) looks like. You can develop your ICP by looking at your current book of business and analyzing your target market, along with exploring the different buyer personas that go into that target market.
If you select an outbound lead gen or B2B appointment setting strategy, the first step is building out a list of prospects that meet the qualifications of your ICP. This can include their job title, industry serviced, number of full-time employees, product or service interests, amount of revenue generated on an annual basis, and more. This makes sure that whatever prospect your SDR connects with through their outreach efforts aligns with the type of business you want.
On the other hand, if you select an inbound digital marketing approach, this is the time that your marketing specialists explore what potential buyers in your target market are searching for online. From here, they can create content that aligns with the wants and needs of potential buyers. If users see the impact your company has to provide for them, they can fill out a contact submission form to receive more information or schedule a sales meeting.
Step 2. Reach Out to Prospects and Inbound Leads
Now that your sales development and marketing teams have sorted out all the practical steps to starting a lead gen strategy, it’s time to start reaching out to potential buyers.
Remember earlier when we talked about creating a list of prospects? Well, this is where that list becomes relevant. When you’re starting an outbound lead gen strategy, SDRs begin by either making phone calls or sending emails to decision-makers that might be interested. The idea here is to introduce your company to decision-makers and explain what you may have to offer them. The goal here is to get them interested and move them along in the B2B sales process.
On the other hand, when it comes to inbound lead gen, SDRs can reach out to those who’ve shown an interest in the content you’ve had to offer them through your website or social media platforms. SDRs can use this time to reach out to leads and explore what they’re looking for in regards to your company’s products or services.
Step 3. Ensure Prospects and Leads Meet Your Sales Criteria
After briefly introducing your company to prospects and/or leads, it’s time to qualify them to ensure they meet your sales criteria. SDRs can do this by asking lead qualifying questions, allowing them to understand a prospect’s (or lead’s) needs, their role in the decision-making process, and the timeline in which they’re looking to make a purchasing decision.
If the prospect or lead meets your company’s sales qualifiers and is ready to make a change as soon as possible, you can skip the next step and shoot for the sales meeting. However, this is a rare happenstance; more often than not, prospects and leads need some nurturing to build trust before agreeing to schedule a meeting or make a purchase.
Step 4. Continue to Nurture Relationships With Qualified Prospects and Leads Until They’re Ready to Buy
For the qualified prospects and leads who aren’t ready to take the next step in their buyer’s journey yet, it’s important to persistently (yet professionally) follow up with decision-makers to help them make a purchasing decision. This can be done via warm phone calls or through lead nurturing campaigns.
When implementing prospects and leads into nurturing campaigns, it’s important to differentiate them into lead segments, ensuring they get the best content possible for their wants, needs, and interests. With a lead segmentation strategy in place, your SDRs have the opportunity to further engage decision-makers and give them the ability to trust what you have to offer. This is because each piece of content feels personal and crafted specifically for them, rather than a mass email sent to everyone existing in the pipeline.
Step 5. Schedule Sales Meetings Between Decision-Makers and a Sales Exec
Once a prospect or lead is ready to take that next step in the sales journey, it’s time for an SDR to schedule a meeting between a decision-maker and an internal sales exec who is well-versed in closing deals. From here, it’s up to the sales (or account) exec to present them with a personalized sales pitch that empowers them to envision themselves as your customer.
How Is a Sales Funnel Different From a Sales Pipeline?
A sales funnel and a sales pipeline are closely related but represent different aspects of the sales process.
When it comes down to it, a sales funnel illustrates the customer’s journey from awareness to loyalty, showcasing stages like awareness, interest, consideration, purchase, and loyalty. When distributing content to prospects and leads in the B2B sales funnel, it’s essential that lead generation and marketing teams present them with information that aligns with where they’re at in the buyer’s journey.
For example if a prospect is in the awareness stage of the sales funnel, sending them to a top-of-funnel blog on your website that aligns with what they’re looking for would be a good approach because it allows them to think of solutions to their pain points. On the other hand, if a prospect or lead is in the consideration phase, sending them relevant case studies would be a solid approach because it encourages them to think of themselves in the shoes of your customer.
On the other hand, a sales pipeline focuses on the sales team’s practical management of leads at different stages from the prospective and process from a business’s operations, offering a visual representation of where each lead stands in the sales process. The pipeline aids in tracking, prioritizing, and managing leads, ensuring a systematic approach to nurturing prospects through the funnel’s stages, ultimately contributing to successful conversions and revenue generation.
In short, a sales funnel represents the customer’s journey through the decision-making process, and a sales pipeline represents a sales team’s strategically crafted approach to converting a company from a prospect to a customer.
Reasons to Align Your Sales Funnel and Sales Pipeline
Aligning your sales funnel and sales pipelines is crucial for streamlining your sales process and maximizing efficiency and effectiveness. While the sales funnel represents the customer’s journey, the sales pipeline focuses on managing and advancing leads through that journey.
When these two components are aligned, several benefits emerge:
- Having a clear understanding of a lead’s journey in the buying process: Alignment ensures that all team members have a shared understanding of the stages a lead goes through and the corresponding actions required at each step. This clarity reduces confusion and enhances collaboration.
- Having efficient progression from lead to customer: A synchronized approach enables seamless movement of leads through stages. The sales pipeline guides sales reps in systematically engaging leads, preventing them from getting stuck or lost in the process.
- Ability to present accurate sales forecasting: A well-aligned pipeline provides accurate data for forecasting revenue. When you know the percentage of leads at each stage and their conversion rates, you can predict future sales more reliably.
- Better lead prioritization: With a clear view of each lead’s status, sales teams can prioritize efforts based on lead quality and stage. This ensures that efforts are focused on leads most likely to convert, improving efficiency.
- More optimized conversion rates: Alignment allows for better monitoring of conversion rates at each stage. If a stage consistently underperforms, you can identify bottlenecks and take corrective action to improve conversion rates.
- More customer-centric approach: Alignment helps you deliver a consistent and tailored experience to leads, enhancing customer satisfaction. By understanding where leads are in their journey, you can provide relevant information and personalized interactions.
- Boost effective communication between departments: When the sales funnel and pipeline align, communication among sales, marketing, and customer service improves. This facilitates a holistic approach, preventing silos and ensuring a seamless customer experience.
Aligning your sales funnel and sales pipelines creates a structured, data-driven, and customer-focused approach to sales, driving higher conversion rates, improved customer relationships, and increased revenue.
How to Integrate Your Sales Funnel With Your Sales Pipeline
Effective integration of sales funnels and pipelines improves lead management, boosts conversion rates, and enhances customer experiences. It requires collaboration, technology, and a commitment to optimizing the entire sales process.
However, it requires a strategic approach that involves coordination between sales, marketing, sales development, and other relevant teams. Here’s how businesses can effectively achieve this integration:
Define Clear Stages
Establish a consistent set of stages that align with both the sales funnel and the sales pipeline. Ensure that each stage represents a specific customer journey milestone and that everyone understands the definitions.
Share Terminology
Use consistent terminology across departments to avoid confusion and miscommunication. Ensure that marketing, sales, and other teams use the same language to describe lead progression.
Use Sales Technology and Tools
Implement a customer relationship management (CRM) system and other relevant B2B lead generation tools that supports both the sales funnel and pipeline management. This can help centralize data, automate workflows, and enable seamless tracking of leads’ progress.
Have a Streamlined Lead Scoring Process
Implement lead scoring to prioritize leads based on their engagement level, behavior, and fit with your ideal customer profile. This guides sales reps in focusing efforts on high-potential leads.
Share Relevant Data Across Teams
Enable data sharing between marketing and sales teams. Marketing should provide valuable insights about lead interactions, enabling sales to tailor their approach effectively.
Additionally, it’s important that you establish key performance indicators (KPIs) to measure the effectiveness of the integration. Monitor conversion rates, lead velocity, and other relevant metrics to identify areas for improvement.
Have Continuous Communication
Establish regular communication between sales and marketing teams. Hold meetings to discuss lead performance, adjustments to the funnel or pipeline, and any challenges faced.
Routinely Train and Reinforce Roles
Train both marketing and sales teams on the integrated process. Ensure that everyone understands the roles and responsibilities at each stage and how their efforts contribute to the overall sales success.
Automate Workflows
Automate repetitive tasks and notifications using your CRM or marketing automation tools. This ensures that the right actions are taken at the right time, preventing leads from falling through the cracks.
Create a Feedback Loop
Create a feedback loop where sales can provide insights to marketing about the quality of leads and their needs. This helps marketing refine their strategies and messaging.
Regularly Review Your Processes
Regularly review and refine your integrated approach. As your business evolves and customer behavior changes, adjust your sales funnel and pipeline accordingly.
Key Takeaways
While “sales pipeline” and “sales funnel” are commonly used interchangeably, they have significant differences that must be acknowledged in order to have a lead generation strategy that yields results. Understanding the difference and knowing how to align the two are essential for marrying the customer’s experience along with the sales processes of your business.
Abstrakt Marketing Group is well-equipped to know how sales pipelines and funnels work differently from each other, while also understanding the impact that can be achieved by coordinating the two. We collaborate with growing B2B companies around the nation to help them create and implement a lead generation strategy that yields long-term results.
When you’re ready to maximize the way your company approaches B2B lead generation, contact the business growth experts at Abstrakt!
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