Difference Between Similar Terms and Objects

Difference Between Sales Funnel and Sales Pipeline

The importance of sales and marketing in any business is unmatched. As such, different terms may be thrown here and there, with the expectation that they are easily defined. Well, this is not the case for most sales and marketing terms, such as sales funnel and sales pipeline. While these two outline the flow of prospects through a sale, they differ in various ways. 

What is Sales Funnel?

Referred to as the sales funnel due to the funnel-like shape of the process, this is the process a prospect takes from the awareness stage to the point a sale is closed. The sales funnel focuses on numbers that are used to set departmental targets. However, it is normal for the prospects to reduce as the sales process advances hence the narrow bottom. 

The stages in the sales funnel include;

  • Awareness

 The main purpose of this stage is leads generation and is often done through free access to webinars, free articles or ads. 

  • Interest

 This is the stage where prospects start gaining interest in the brand, product or service. Companies should, in turn, educate the prospects through emails, newsletters and even case studies. 

  • Consideration

Scheduling sales call or meet up calls makes up for the first point of contact. 

  • Engagement

Engage prospects with helpful insights on their area of interest and build a relationship

  • Conversion 

This is the last stage in the sales funnel where the prospect becomes a customer. To ensure customer retention and repeat purchases, brands should follow up on services or products provided and ensure the customer is satisfied. 

  • To improve sales funnel in business, ensure leads are not lost through the stages, and if they are, quickly change the strategy. To enhance sustainability in the sales funnel, it is also important to track the leads entered, the conversion rate and the customer acquisition cost. 

What is Sales Pipeline?

This is a visual representation of the sales prospects and the stage at which they are in the sales process. Although the structure may differ from company to company, common stages include;

  • Qualification

 Here, the customer representative engages the prospect to determine whether they have a need or budget to purchase the product or service. 

  • Meeting

 If the prospect requires the product or service, the sales rep initiates a discussion aimed at helping the prospect find the best fit for their needs

  • Proposal

The sales person then avails a quote detailing the product or service to be provided, the costs and the time frame

  • Closing

The contracts are signed and the prospect becomes a customer

In every stage, a report is provided which helps show the quantity and value of deals. These help businesses track the status of each deal and determine ways in which they can improve the processes to get more deals. The sales pipelines also provide insights to the team on whether the predetermined targets will be met. This, in turn, helps sales leaders in making goals, individual targets and new opportunities decisions. As a means of ensuring leads are not lost in the process, a sales pipeline streamlines sales processes, while also pinpointing possible processes that need rectification to improve on sales.   

Similarities between sales funnel and sales pipeline

  • Both outline the flow of prospects through a sale

Differences between sales funnel and sales pipeline

Definition

Sales funnel refers to the process a prospect takes from the awareness stage to the point a sale is closed. On the other hand, sales pipeline refers to a visual representation of the sales prospects and the stage at which they are in the sales process. 

Interest

While the sales funnel is keen on the numbers, the sales pipeline is keen on the process. 

Process

The sales funnel entails the classification of companies into groups, recording details of the last contact and using tags to set the next actions. On the other hand, the sales pipeline entails using the plans, processes, action and milestones as set by the sales pipeline management system for the next actions.  

Reporting

While a sales funnel report gives the sales forecasts based on the leads while also showing the conversion rates through the whole process, a sales pipeline report shows the quantity and value of all deals in each stage at the time the report was generated.

Sales Funnel vs. Sales Pipeline: Comparison Table

Summary of sales funnel vs. sales pipeline

Sales funnel refers to the process a prospect takes from the awareness stage to the point a sale is closed. The process is keen on numbers and entails the classification of companies into groups, recording details of the last contact and using tags to set the next actions. On the other hand, sales pipeline refers to a visual representation of the sales prospects and the stage at which they are in the sales process. It is keen on the process and entails using the plans, processes, action and milestones as set by the sales pipeline management system for the next actions. 

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References :


[0]Craig Jamieson. The Small Business' Guide to Social CRM. Packt Publishing Ltd, 2014. https://books.google.co.ke/books?id=rQqtBAAAQBAJ&pg=PT181&dq=Difference+between+sales+funnel+and+pipeline&hl=en&sa=X&ved=0ahUKEwialZ-fs__oAhUSiFwKHVdxDnsQ6AEINDAC#v=onepage&q=Difference%20between%20sales%20funnel%20and%20pipeline&f=false

[1]Funk D & Harmon L. 42 Rules for Building a High-Velocity Inside Sales Team: Actionable Guide to Creating Inside Sales Teams that Deliver Quantum Results. Super Star Press Publishers, 2014. https://books.google.co.ke/books?id=5uYPAwAAQBAJ&pg=PA11&dq=Difference+between+sales+funnel+and+pipeline&hl=en&sa=X&ved=0ahUKEwialZ-fs__oAhUSiFwKHVdxDnsQ6AEITjAF#v=onepage&q=Difference%20between%20sales%20funnel%20and%20pipeline&f=false

[2]Management Association, Information Resources. Advertising and Branding: Concepts, Methodologies, Tools, and Applications: Concepts, Methodologies, Tools, and Applications. IGI Global Publishers, 2017. https://books.google.co.ke/books?id=wJbgDQAAQBAJ&pg=PA395&dq=Difference+between+sales+funnel+and+pipeline&hl=en&sa=X&ved=0ahUKEwialZ-fs__oAhUSiFwKHVdxDnsQ6AEIPTAD#v=onepage&q=Difference%20between%20sales%20funnel%20and%20pipeline&f=false

[3]Image credit: https://www.flickr.com/photos/carlagates247/5524789016

[4]Image credit: https://www.flickr.com/photos/thesaleswhisperer/14328591468

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