Leads & Sales

Sales Funnel

In short

A sales funnel describes the stages a prospect goes through from first contact to purchase, and how many people drop off at each stage along the way.

Also known as: sales-funnel

A sales funnel describes the stages potential customers go through, from their first contact with your brand to the purchase. The funnel shape shows the basic principle: lots of people enter at the top, some drop out at every stage, and a few buyers come out at the bottom.

Typical stages

  1. Awareness: Someone sees your ad.
  2. Interest: They click the ad and visit your landing page.
  3. Lead: They leave their contact details.
  4. Qualification: The lead becomes an MQL or SQL.
  5. Proposal / meeting: A concrete conversation or offer.
  6. Close: The customer buys.

Example

A recruiting campaign gets 50,000 impressions, 1,000 clicks, 120 applications, 30 interviews and 6 hires. The conversion rate from stage to stage:

Click → application: 120 ÷ 1,000 = 12%
Application → interview: 30 ÷ 120 = 25%
Interview → hire: 6 ÷ 30 = 20%

This shows you where the biggest lever is. If you double the rate from application to interview, you get twice as many hires on the same budget.

Measuring the sales funnel

The challenge in performance marketing: the top stages are measured by the ad platform, while the bottom stages live in the CRM or with your payment provider. Only when both come together can you see the full funnel per campaign.

LeadMetrics has a funnel analysis widget in its dashboards for exactly this. You can show stages from clicks to leads to deals and revenue – including your own intermediate stages as custom metrics, sent via webhook, Zapier, Make or a HubSpot workflow.

Common mistakes

  • Optimizing only the top: Cheap clicks and leads don't help if the funnel leaks further down.
  • Poorly defined stages: If it's unclear when a lead counts as qualified, the rates can't be compared.
  • Ignoring the time lag: Deals often close weeks after the lead. Don't judge new campaigns too early.

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Frequently asked questions

The sales funnel shows volumes: how many prospects are left from one stage to the next. The sales pipeline shows the individual open deals, with value and stage, that sales is actively working on.

Related terms

All terms

Sales Pipeline

The sales pipeline shows all of a company's open sales opportunities with their value and current stage, from qualified lead to closed deal.

Conversion Rate

Conversion rate is the percentage of visitors or leads who complete a desired action, such as submitting a form or making a purchase.

Customer Journey · The path from first contact to closed deal

The customer journey describes every step and touchpoint a prospect goes through, from the first contact with your brand to the purchase or signed deal.

Lead

A lead is a potential customer who has shown interest and shared their contact details with you, for example through a form, a funnel or a lead form.

MQL · Marketing Qualified Lead

An MQL (marketing qualified lead) is a lead that, based on marketing's criteria, shows enough interest and fit to be actively nurtured or handed to sales.

CRM · Customer Relationship Management

A CRM (customer relationship management) is a system for managing contacts, leads, deals and all communication with prospects and customers in one place.