A sales funnel and a sales pipeline describe how leads move in the sales process. But they’re completely different terms that often get confused.
In this article, we explain all the key differences and similarities between a sales pipeline and a funnel, as well as when to use which one. We also compared sales funnel vs sales pipeline in the table below.
What’s the difference between a sales funnel and a sales pipeline?
A sales funnel represents the customer’s journey from becoming aware of a product to purchasing. It focuses on the customer’s actions and decisions.
A sales pipeline outlines the sales team’s process of converting leads into customers. It emphasizes the sales rep’s activities and steps to close deals.
| Sales Funnel | Sales Pipeline | |
| Perspective | Customer’s | Sales rep’s |
| Stages | Awareness, interest, evaluation, intent, purchase, loyalty | Prospecting, lead qualification, meeting setup, proposal sent, negotiation, deal closing |
| Goal | Enhance the customer’s buying experience | Optimize the sales team’s activities |
| Tracking | Conversion rates between stages, retention, satisfaction, CLV | Revenue forecast, deals closed, sales performance metrics |
| Tools | Marketing automation platform, content management system, sales engagement platform | CRM (Customer Relationship Management) system, sales enablement tools |
Sales Funnel vs Sales Pipeline: When do you use each of them?
Use a sales funnel when you want to understand and enhance the customer’s buying experience. It’s ideal for refining marketing efforts to guide prospects toward a purchase.
Here’s when to implement a sales funnel structure:
- Enhancing Marketing Strategies: Used to tailor marketing efforts, content, and campaigns to better guide prospects toward making a purchase.
- Product Launches: Helpful during the introduction of new products or services to map out how potential customers become aware and decide to buy.
- Optimizing Conversion Rates: Applied when aiming to improve the percentage of website visitors or leads that turn into paying customers.
- Segmenting Audiences: Utilized to create targeted messaging for different customer segments based on their stage in the buying journey.
Use a sales pipeline when managing and optimizing the sales team’s tasks. It’s useful for tracking deals and sales activities and improving sales efficiency.
Here’s when to implement a sales pipeline structure:
- Managing Sales Activities: Employed by sales managers and teams to track progress on deals and ensure timely follow-ups.
- Forecasting Sales Revenue: It’s excellent for predicting future revenue based on the deals in each pipeline stage.
- Identifying Process Bottlenecks: It’s used to spot stages where deals frequently stall and to implement improvements.
- Resource Allocation: Helps prioritize leads and focus efforts on opportunities most likely to close.
- Improving Sales Efficiency: Aids in refining the sales process and training needs, as well as enhancing overall sales performance.
Key takeaways
A sales funnel centers on the customer’s journey. It reflects the customer’s decision-making process and is primarily managed by the marketing team to enhance customer engagement and identify where prospects drop off.
In contrast, a sales pipeline concentrates on the sales team’s actions. It depicts the sales activities required to convert leads into customers and is handled by the sales team to manage and optimize the sales process.
Visually, the sales funnel is depicted as a funnel shape aimed at increasing customer conversions by improving the buying experience. Meanwhile, the sales pipeline is often illustrated as a linear sequence that focuses on improving sales productivity through streamlined activities.
