The Difference Between a Sales Funnel and a Sales Pipeline

The sales funnel and the sales pipeline are two terms that can be confusing in the world of selling. At many times, they work together, but in reality, they are representative of different things within the process of making a sale. Ultimately, the difference between them can be important to the life of a business in order to optimize overall sales performance.

What’s a Sales Funnel?

The sales funnel is a schematization that merely represents, in very simplistic terms, what your prospect is going to go through from becoming aware of your product or service down to actually purchasing it. The term “funnel” is perhaps metaphorical, as physical funnels also narrow down as the prospect moves through the progression of the buying process—broader on top, quite narrow near the bottom.

The stages of the sales funnel typically involve:

• Awareness: Prospective customers are first exposed to your brand, which usually happens through one or more of your marketing efforts, including content marketing, social media, or advertising.
• Interest: Leads begin to show interest in your product or service. This could involve perusing your content, subscribing to a newsletter, or asking for more information.
• Consideration: Prospects are weighing your offering against their alternatives, considering features, benefits, and price.
• Intent: A clear intent of buying is usually expressed by asking for a demo, quote, or consultation.
• Purchase: The customer pays for the merchandise and the transaction is completed.
• Retention: Then it would be all about boosting customer satisfaction and long-term loyalty post-purchase.
• Advocacy: A satisfied customer can now turn into an advocate who refers other people and gives testimonies or reviews.

What Is a Sales Pipeline?

The sales pipeline proposes another way of looking at the customer journey compared to the sales funnel. Sales pipelines therefore give sales teams a way to devise a tool that organizes the numerous activities surrounding the closing of a deal in one place. This pipeline has the capability of visualizing the stages through which a deal passes from its beginning stage through to the successful completion of the sale and thereby making it possible for each and every sales team to trace and manage each opportunity available.

Some of the typically shared stages in a sales pipeline include:

• Prospecting: The act of finding leads that probably have a need for and probably want your product or service.
• Qualification: Assess leads by identifying their fit based on factors, including budget, authority, need, and time within which purchase would realistically take place.
• Needs Assessment: Interacting with the prospect in need of qualification to know much more about their unique needs and challenges.
• Demonstration: This means presenting your product or service as a solution to the need you have presented to the prospect. This is usually in the form of a customized pitch/demo.
• Objection Handling: It involves sensitively addressing potential areas of concern or objections that could be raised by the prospect.
• Negotiation: The negotiating of terms, pricing, and other details in the process of arriving at conditions mutually agreeable to the parties.
• Close: This is actually the finalization of the deal and getting the commitment from the prospect.
• Follow-Up: Continuously building a relationship after the sale, offering solutions to fix anything that might make the customer unhappy, or exploring opportunities to upsell or cross-sell.

Differences Between Sales Funnel and Sales Pipeline

Both the sales funnel and the sales pipeline have significant relevance within the sales process, but they do relate to different things:

• Focus: A sales funnel focuses on the customer journey, while a sales pipeline focuses on internal control in relation to the deals.
• Structure: Though the sales funnel has a huge framework, where there is a stage from awareness all the way up to advocacy, the pipeline is much shorter, referring to a prospecting-to-deal process.
• Use Case: The sales funnel is primarily useful to marketing and sales teams in helping them understand and optimize the overall selling process. It is meant to be used by the sales team for tracking and managing individual deals, while the pipeline is supposed to be utilized by those teams.

Why It’s Important to Understand Both

Understanding the differences between a sales funnel and a sales pipeline allows businesses to optimize their sales and marketing strategies effectively. This is something that can be done effectively by aligning the two so that a company can maintain the way it nurtures leads moving through a funnel but at the same time manage every deal radically in a pipeline.

Businesspeople can therefore enable further the right action for the right stage in the funnel and pipeline for each prospect towards advancing prospects much closer to generating a sale by integrating CRM tools in their businesses. Tools like Pipedrive and Webdew are great examples of how sales funnels and pipelines can be managed within CRM systems to allow the sales team to zero in on those leads that carry a high potential and close deals quickly.

Conclusion

The sales funnel and the sales pipeline can be two of the most important elements of a sales strategy in a comprehensive rough. Knowledge of the unique companies’ strengths can help utilize one or both effectively to multiply the chances of converting leads into loyal customers, hence fostering business growth and profitability.