What is Sales Funnel

Last updated: 2025-06-16

Business Funnel Explained in Simply in One Sentence

  • A sales funnel is a visual way to show the steps you take to turn leads into paying customers, guiding them from first touch to final sale. 

What a Sales Funnel Means for Small and Growing Businesses

A Sales Funnel is a tool for managing the sales process and the individual stages a customer goes through.

  • A sales funnel is a visual representation of the stages potential customers go through.
  • It also describes the sequence of steps (process) a customer takes from initial contact to purchase and, potentially, loyalty.
  • It helps to systematically approach, persuade, and acquire customers.
  • It's wide at the top (many prospective leads) and narrows down (fewer actual customers).
  • It connects marketing activities when reaching out to the customer and sales when acquiring the customer.
  • It is the basis for a sales pipeline.

How a Sales Funnel Works in Practice

The sales funnel is part of CRM systems, such as Aptien CRM, where it helps to sort potential customers - those who could potentially be interested in your products or services. Essentially, it guides salespeople in their sales activities.

  • First, you identify and reach out to potential customers in the market.
  • You then try to convince them, using sales techniques, to become your customers.

what is a sales funnel

1. Target Market

  • We're identifying potential customers and interested parties within the market segment.
  • We actively engage the target market through marketing, advertising, PR, and other promotional activities.

2. Suspect - Potential Customer

  • This is a customer we've identified who we believe might need our product.
  • They aren't yet aware of us, and we're reaching out with an offer or marketing.

3. Prospect - Interested Potential Customer

  • This is a potential customer who has shown some initial interest in our offering.
  • For example, they might have visited our website or stopped by our location.

4. Lead - Qualified Potential Customer

  • A lead is a potential customer who is seriously interested in our product.
  • They've shown active interest, and our goal is to convert them into a paying customer.

5. Customer

  • A customer is someone who has purchased our product.

How to Work with a Sales Funnel

Sales representatives move potential customers in individual stages according to the development of negotiations. At each stage, the probability that the suspect will become a customer increases.

  • The merchant enters a potential customer (suspect) that he has looked for
  • It moves from phase to phase according to probability and reactions
  • It uses ratings and gradually qualifies potential customers
  • The success rate of moving from one stage to another is called conversion
sales funnel and stages in Aptien CRM