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Do you struggle with understanding the difference between sales funnel vs. sales pipeline? It’s not surprising because both are useful tools in developing and implementing a lead generation and sales strategy. Companies should rely on sales funnel reports for a bird’s eye view of their overall strategy, and the sales pipeline to evaluate the specific actions of the sales team.


Sales funnel vs. sales pipeline


A sales funnel represents how prospects move through the buying process. Prospects become leads, and leads are converted into customers. The large end of the funnel consists of prospects, the middle of the funnel contains leads, and the bottom represents those people who completely moved through the buying process and became customers. A sales funnel report is useful because it maps and tracks this process. For example, the report contains information regarding what percentage of leads generated actually become customers. If people are entering the funnel as prospects, become leads, but then drop out of the funnel before they become customers, a business should reevaluate its strategy for the end of the buying process.


A sales pipeline is focused on process. It is a sequence of actions taken by a sales team to convert prospects into leads and leads into customers. It differs from the funnel in that it contains the actual steps taken by the sales team in the buying process. A sales pipeline varies across companies. Here is a generic pipeline that can be customized by specific businesses to meet their unique needs:


  • The sales team determines if a person is a true prospect, i.e. if he/she meets the qualifications for eventually becoming a customer (budget, decision-making authority, need, etc.).
  • The sales team engages the prospective customer and discusses how the company can meet his/her needs.
  • The sales team proposes a solution to the prospective customer; for example, gives a quote.
  • The deal is closed when negotiations are finalized and contracts are signed.


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