What is Sales Funnel Management?

A sales funnel is simply a pictorial representation of how a lead travels through the sales process in your organization. A typical funnel resembles an inverted pyramid. The top of the funnel is usually wider with a larger volume of leads that come into your system, and the funnel gets narrower as the leads get qualified and finally culminates in the leads who have become your customer. The process of overseeing this customer journey is called sales funnel management.

Even the best salesperson may fail to meet their targets if they are not good at managing their sales funnel. Let me apply the 90-10 formula here. Only 10% of the leads that are assigned will be instantly sales-ready. The other 90% need to be consistently nurtured and sometimes go down the entire sales funnel before they become customers. With the large volume of leads that come in for most businesses on a daily basis, efficient sales funnel management translates to a competent salesperson.

sales funnel management

Components of a sales funnel:

A sales funnel can be a boon for you, but sometimes a bane as well. A well designed and accurate sales funnel can simplify the entire process for you and help you to filter leads according to the level they are at. This means that you know what to communicate to which lead at what point.

However, if the funnel becomes needlessly long and complicated, that would mean that there is bound to be lead leakage. Now, this is what a typical sales funnel looks like.


sales funnel management - funnel


The topmost part of the sales funnel, this comprises of the people who are aware of your business and how it works. This would include a wide bucket. How wide this is would depend on the efficiency and quality of your marketing and promotional campaigns. There is no way to filter leads at this stage, as the leads may or may not have come in contact with your business.


The leads that have entered into your system as leads come into this category. They could have filled a form, visited a web page, contacted your sales team, attended a webinar or interacted with you on social media. This shows that these leads have expressed an interest in your business and what you sell. They are generally marketing qualified leads.


Once the sales person has gotten into touch with some leads, they would get an idea of whether or not the product/service will make sense for them. For some leads, the requirements would be immediate, while for some, it would not be so urgent. These are sales qualified leads. You would discuss things such as product fitment and price value with these leads.


The leads in this stage already know a lot about your business and how it will benefit them. They are now evaluating you and your competitors. The leads in this bucket will also be trying to negotiate prices which is a high indication of buying intent. This is the penultimate stage in your funnel.


The peak of the inverted funnel consists of all the leads that have purchased your product/service. These are your customers that have brought you business out of all the people who were aware of you.

sales funnel for managers

Benefits of having a sales funnel:

As I have already mentioned having a well thought out and efficient sales funnel can be very beneficial to your business, and your help you achieve your own sales goals. Here are some of the major benefits that I can think of.

  • Helps in lead prioritization
  • Allows you to disregard leads that do not have value to you.
  • Helps marketers to engage and nurture leads based on which stage they are in the funnel
  • Accurate sales funnels will help you to forecast sales for the next month, quarter or sometimes, year.
  • Enables the sales team to be focused on their goals, and makes the entire process more transparent.

Check out this sales management software to streamline your sales funnel and teams.

Blunders we make while building the sales funnel:

  • Not having a good tool to help in sales management
  • Not aligning lead generation with conversion
  • Not setting realistic goals
  • Not engaging the leads enough during the first two stages
  • Not having a proper lead distribution mechanism.
  • Not monitoring the progress at each stage

Best practices to keep in mind:

  1. Set clear and concise goals: Before you start building your funnel, know why you are doing this in the first place. Do you want to double revenue? Do you want to target a specific audience? Or is it something else altogether? You need to know what your sales funnel has been set for to make the best use of it.
  2. Track movement of your leads through the funnel: Get yourself a CRM or a sales execution tool that will help you to know where each lead is in the funnel. This way you’ll know how long it takes for a lead to move through the system and what factors are helping the lead to convert.
  3. Talk different languages: Leads in various stages of your sales funnel would want different things. You cannot talk about the features of your product at every phase. You have to try and educate the customer during the initial stages using e-books or white papers, you can send product demos to leads opportunities and pricing to leads who are considering you.
  4. Ensure that your sales cycle is not too long: Longer sales cycles are not good in the long run and might result in lead leakage over a period of time. Measure the average time that it takes to close the deal and try to stick to that timeline.
  5. Measure your progress: Constantly measure the results at each stage of the sales cycle. Note how many new leads are coming in and what is driving sales for you. This way you will know what is working and why.

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