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Sales pipeline vs Sales funnel: What’s the difference?

Sales pipeline vs. sales funnel: What’s the difference?

Sales pipeline and sales funnel are two terms that are often interchanged. In fact, many people mistake them as synonyms of each other, as the main process is the same.

However, sales pipeline and sales funnel are completely different terms and can be customized based on the company’s requirements. 

So, if you want to implement a sales process in your business, you need to understand the meaning of these terms first and the difference between sales pipeline vs. sales funnel.

Let’s start with the definitions of the sales pipeline and sales funnel.

What is a sales pipeline? 

A sales pipeline is a visual representation of the different stages of the sales process. It reflects at which stage your buyer is in the purchasing process.

It is a systematic approach for prospecting, qualifying leads, selling products or services, and retaining customers. 

In short, it is a summary of all available and upcoming sales opportunities for any company.

What is a sales funnel? 

A sales funnel is a visual representation of all the leads you pull, including your website visitors and other channels till they turn into your paying customers

Sales funnel, true to its name, serves as a funnel. It initially allows you to enter all your leads, and, moving ahead, keeps on narrowing on the basis of lead conversions. 

Unlike sales pipeline, it has a customer-centric approach.  It is important to study sales funnels in order to improve your sales process.

Here’s the table differentiating between sales pipeline and funnel: 

Sales pipeline vs. sales funnel: 4 Main differences

Now, after learning the difference between a sales pipeline and sales funnel. Let’s have a detailed insight into each of these for better understanding.

 Sales pipeline Sales funnel 
Visualization Sales pipeline gives an insight of quality and quantity and detects the stage of the lead. The sales funnel helps to know the number of leads at various stages of sales funnel at a given period of time. 
Tracking Sales pipeline helps you track the stage of your lead at different stages of your Sales pipeline process. The sales funnel tracks the stage of your lead, from discovering the product to turning into a buying customer. 
Reporting Sales pipeline report gives an understanding of all the possible future customers. It helps to strategize the next steps and turn the maximum prospects into customers. Sales funnel reports help to know the change in the volume of customers from the initial stage of the funnel till they turn into customers. This way, you can change and take the necessary steps to enhance each stage. 
Measurement Sales pipeline measures the stages of your sales process. Sales funnel measures the conversion rate through your entire sales process. 

Stages of sales Pipeline

In order to efficiently practice sales pipelines, you need to have a detailed understanding of each stage of the sales pipeline. So, here’s all you need to know about it:  

1. Prospecting

Prospecting is the initial stage of the sales pipeline. It is all about targeting and approaching the right audience. You can use various communication channels and create personalized content to engage with your audience.  

Here, you need to be cautious while targeting the leads as they’ll turn into your future customers.

2. Lead qualification

Qualifying lead is about churning the potential lead among all the leads in your bucket. It is a very important stage as you’ll be categorizing the potential lead.

These leads will then proceed in further stages of the sales pipeline to turn into your buying customer.

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3. Scheduling appointment

At this stage, you persuade the prospect to schedule a meeting by sharing your value proposition. However, it is a difficult task, but proper communication and follow-up will help you set up the meeting. 

Here, you can schedule an in-person, telephone, or video call meeting to present your company’s capabilities. 

4. Sales demo

Once your appointment is successful, you can provide a product demo to your lead. The sales demo can be customized based on your lead’s pain points so they can connect with your product.

It is suggested to set an agenda, explain the product and services in detail, and make sure the session has a Q&A round at the end so you can clear out all the queries.

5. Negotiation

This stage needs to be handled smartly and wisely. When negotiation is done with mutual respect and understanding, the deal will prove to be fruitful for both the client and the company.

Negotiation is considered the make-or-break moment of the sales process.  

Hence, it is important to master the art of negotiation. 

6. Closing

The final stage of the sales pipeline process is closing the prospect. This is the concluding stage where you’ll either win or lose the deal. 

If you fail to win the deal, don’t lose hope; instead, you can go back to the negotiation stage and give your best to turn the prospect into a customer. 

Even when the deal is closed, you need to keep nurturing your leads to grab upselling and cross-selling opportunities in the future.

To gain an in-depth understanding of the sales pipeline, you can read this blog.

Why is sales pipeline important?

A sales pipeline is an unavoidable part of the sales process. And it has its own benefits. 

Here are a few points showing the significance of the sales pipeline. 

1. Forecasting revenue targets and growth

Sales pipeline is all about managing your prospects and determining the probability of lead conversion through each step of your process.

With every moving stage of the sales pipeline, your sales rep can track the prospects’ actions and predict the next steps. You can also leverage the data to make accurate sales forecast.   

Team members can analyze pipelines and deals in real-time throughout the year’s sales cycle.  

According to Harvard Business Review, companies with sorted sales pipeline management saw 28% growth

Hence, effective sales pipeline management is of utmost importance to make the maximum profits with your existing prospects and not miss any of them

2. Review team performance

Sales pipeline helps you keep an account of your prospect list. At the same time, it helps you keep track of your team’s performance.

The use of sales pipelines is to help team managers to monitor the progress of their sales reps at each stage.

sales leaderboard

With monthly or quarterly sales pipeline reports, you can easily measure the conversion rate and tenure of sales conversions.  And these numbers and sales pipeline reports will help you understand your team’s efficiency.

3. Analyze target gap

The basic function of the sales pipeline is to track your leads. Tracking leads will definitely give you your achieved number and help you measure the difference with your set target.

target gap

The target gap is the difference between your set target and the achieved target. This helps you analyze where your sales team is lacking when it comes to achieving the targets.

4. Increased sales figures

One of the benefits of a sales pipeline is that it helps to increase sales figures.

Imagine having a lead list of 200 and not following the stages and managing the pipelines. You are bound to miss some leads, not do timely follow-ups, and eventually lose some potential customers.

Now, imagine having a sales pipeline and keeping track of all your 200-lead list. You’ll have reports of all your lead details and their mode of communication so that you can make timely follow-ups, send emails, and make sales call. 

So, now that you have detailed knowledge of the sales pipeline. Let’s take a look at the stages of a sales funnel.

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5 Stages of sales funnel you need to consider

 The sales funnel measures the volume of all the leads from the initial stage till they turn into customers. This helps you calculate the conversion rate at each stage as you start filtering out your leads.

1. Awareness

This is the initial stage of the sales funnel. Here, the funnel measures all the prospective customers that visit your website or learn about your services.

Hence, this is the widest stage of the sales funnel.

The visitors may come across your page or product through any source like social media, blogs, advertisements, marketing campaigns, or even word of mouth. 

At this stage, you can even learn about the source that brings the maximum visitor to your website.

2. Interest 

This is where the prospective customer is interested to gain extra knowledge of your product or services to resolve his pain points.

Here, the visitor will evaluate the solution you provide for his problem. At the same time, they’ll compare your offerings with others in the competition.

So, it is suggested to offer a free trial or free demo to keep the visitor engaged with your product or service.

3. Evaluation

At this stage, your customers would compare you with your competitors. Here your customers will have an insight into your product and will now evaluate different products as per their requirements. 

After consideration and comparing with the competitors, your prospects will shortlist their preferred options. Moreover, prospects also look at the customer reviews, case studies, etc, when they have multiple options.

4. Decision

This is a stage where the prospective customer is armed with great knowledge of your services and offerings. So, it’s a deciding stage where the prospect will move down the funnel or exit it.

The best you can do is arrange calls or webinars to help them purchase your product.   

So, at this stage, the maximum action is taken from the prospect’s end.

5. Revenue

This is the last stage and the narrowest part of the sales funnel.

As this is the stage where you start getting your revenue generated. Here, you can see the volume of your paying customers.

sales report

Once they turn into a customer, it gets easier to keep nurturing them to build strong and lasting relationships. In fact, the probability of selling to an existing customer is 60% to 70%, and the probability of selling to a new prospect is only 5% to 20%.

In order to attract higher re-purchase, your sales and support team must offer exceptional service along with periodic follow-ups.

Why is sales funnel important? 

The sales funnel stages are beneficial for the successful operation of your business. Here are some points on why sales funnels are important.

1. Helps evaluate customer journey

A sales funnel helps you analyze the volume of all the prospective customers from the moment they discover your product till they turn into your paying customer.

And this allows you to detect which stage of the customer journey needs evaluation for better efficiency. And get better volume at the bottom of the funnel.

2. Selecting the correct marketing activity

The sales funnel lets you choose the correct marketing channel. It helps you understand which marketing tools or business models would be needed in order to yield maximum results. 

As it helps to discover which channel contributed most to bringing your prospective customer to your website. However, some marketers prefer to focus on clients who are already in the decision stage and choose the channel accordingly.

This will let you figure out the most suitable marketing platform or activity for your business.  

3. Find new customers

Sales funnel “feed-up” at the top with maximum numbers of visitors. 

This makes you measure the volume of new prospective customers. Not all of these will turn into your paying customers. However, you need to maintain contact with all of your prospects so that you can keep them updated about any new product launch or offer.

This brings the chance of some of them converting into your future customers.

Which one is right for me – Sales pipeline or funnel?

When you use a sales pipeline, it gives you the track record of the stage at which your leads lie in the sales process. So, with sales pipeline, you can identify where your deals are mainly getting stuck and find a way to resolve them.

Below is a visual representation of how a sales pipeline and sales funnel would look for any business. You can customize the stages based on your requirements.

Difference between sales funnel and sales pipeline

On the other hand, a sales funnel provides the number of overall prospective customers from the time they discover the website till they turn into your paying customer.

Sales pipeline and funnel help track, manage and maximize the sales for your organization and result in higher revenue generation. Remember to not only use one of them but both of them to reap maximum results.


Sales pipeline and sales funnel are both crucial parts of the sales process. Therefore, in order to grow exponentially, you need to pick the right sales strategy and implement it.

We hope that the difference between sales pipeline vs. sales funnel is clear and you can choose the ideal approach for your business.

Dhanashree Pal

Dhanashree has been into writing since her teens. She believes writing is the best way to express and explain everything happening in this world. Reading and imagining are something she can do for hours. Enthusiastic about exploring new places and food. Young and hopeful of becoming better with every passing day.

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