Sales Funnel Steps, Sales Pipeline: Understanding the Difference and Importance in Driving Sales Success


When it comes to sales, understanding the difference between a sales pipeline and a sales funnel is crucial. While these terms are often used interchangeably, they actually refer to two distinct concepts. In this article, we will delve into the definitions and functions of both sales pipelines and sales funnels. We will explore their similarities and differences, as well as their importance in the sales process. By the end, you will have a clear understanding of these concepts and their significance in driving sales success.

What is a Sales Pipeline?

A sales pipeline is a series of stages that a prospect goes through during the sales process. Each stage represents a different step in the buyer’s journey, and as the prospect moves through these stages, they get closer to making a purchase. The specific stages in a sales pipeline may vary from company to company, but some common examples include:

  1. Prospecting: In this stage, the sales representative asks qualifying questions to determine if the prospect has the need, budget, and authority to make a purchase in the near future.

  2. Discovery: The sales representative and prospect engage in a discussion to identify the solution that best fits the prospect’s needs and requirements.

  3. Proposal: The sales representative sends the prospect a detailed quote that outlines what will be provided, the cost, and the duration of the solution.

  4. Negotiation: Final negotiations are made, and contracts are signed to formalize the agreement. At this point, the prospect becomes an official customer.

It is important to note that a sales pipeline is not just a sequence of stages. It also involves the actions and tasks that sales teams take at each stage to move prospects forward. These actions can include lead distribution, qualification calls, research, and more.

How is a Sales Pipeline Different from a Sales Funnel?

While a sales pipeline focuses on the actions and stages of the sales process, a sales funnel has a broader perspective. A sales funnel represents the overall flow of prospects from the top of the funnel to the bottom. It visualizes the entire journey that a prospect takes, starting from when they first enter the funnel as potential leads to when they either make a purchase or drop out of the funnel.

The shape of a sales funnel is wide at the top, indicating a larger number of leads entering the funnel. However, as the prospects move through the various stages of the funnel, the number decreases, leaving only the most qualified leads at the bottom. The stages in a sales funnel can align with the stages in a sales pipeline. However, a sales funnel provides a more comprehensive view of the entire lead flow, including the percentage of leads that advance through each stage.

Understanding the Sales Funnel Report

A sales funnel report is a valuable tool for sales leaders. It provides insights into the progress of leads through each stage of the pipeline, allowing sales teams to forecast sales based on current lead volume. It also helps identify bottlenecks in the sales process and provides opportunities for improvement and coaching.

Unlike a pipeline report, which focuses on the value and quantity of deals at a specific moment, a sales funnel report is based on a cohort of leads. For example, a sales funnel report can tell you what percentage of the leads received in a specific quarter advanced through each stage. This information is invaluable for understanding the effectiveness of your sales process and making data-driven decisions.


In conclusion, understanding the difference between a sales pipeline and a sales funnel is essential for sales professionals. While both concepts are related to the progress of prospects through the sales process, they offer distinct perspectives. A sales pipeline focuses on the stages and actions within the process, while a sales funnel provides a broader view of the entire lead flow.

By leveraging both the sales pipeline and sales funnel, sales teams can effectively track and manage the progress of prospects, forecast sales, and identify areas for improvement. It is important for sales professionals to be familiar with these concepts and utilize them to drive sales success.

To learn more about sales pipelines and how they can benefit your sales team, visit reputable external links such as for additional resources, templates, and expert insights.

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