Quick: How is a sales funnel different from a sales pipeline? If you’re not entirely sure, you’re not alone. Many sales reps mix up the terms when speaking about the sales process and the steps it involves. While these terms describe similar processes, they have different goals and benefits.
Yauhen Zaremba, the director of demand generation at PandaDoc, wrote a blog post that explains the key differences between a sales funnel and a sales pipeline. In a nutshell, he says they both provide a look at where buyers are in their journey, but from different vantage points.
A pipeline is all about the various stages a deal goes through — like meeting scheduled or proposal sent — while a funnel focuses on the steps taken to move your prospect from attention to buying. For example, moving them from awareness to decision.
In this issue of PromoPro Daily, we dive deeper into Zaremba’s explanation on the goals and benefits of each.
Gain Clarity On Sales Pipelines
What they are: Sales pipelines essentially describe the prospect’s journey to becoming a client. It’s how a prospect moves through certain stages planned ahead by sales reps, Zaremba says.
The goals and benefits: The primary goal is to help you boost your revenue within the sales cycle. By implementing the sales pipeline, Zaremba says you can benefit from faster deals, greater transparency and efficiency and improved resource allocation. For example, when you know where your prospect is in the pipeline, you can better distribute your resources. If they’re in the consideration stage, you could send them case studies on how similar companies have used promo to achieve their goals.
Gain Clarity On Sales Funnels
What they are: A sales funnel is based on the steps taken to improve conversion rates between the neighboring stages.
The benefits: According to Zaremba, the main goal of a sales funnel is to manage conversions and push the marketing machine to work profitably. In other words, the conversion rates at all stages must be high enough to make the cost of generating and nurturing one lead worth it. The benefits of using a sales funnel include lower sales costs, fewer missed opportunities and an opportunity to polish your process. For instance, if you’re not getting many leads to the awareness stage of your funnel, you can refine your traffic-generating approach.
It’s understandable to use the terms “sales funnel” and “sales pipeline” interchangeably. The terms are related but they mean different things. Whether you’re training a new sales rep or just wanting to improve your expertise, knowing the difference can help you sharpen your sales strategy.
Compiled by Audrey Sellers
Source: Yauhen Zaremba is the director of demand generation at PandaDoc, a document automation platform.
