What Is a Sales Funnel?

July 9, 2020
2 min

The term sales funnel refers to the steps of the traditional sales process from beginning to end. It’s usually presented as an inverted pyramid that shows the largest pool of potential buyers at the top and narrows to the most interested prospects. Visualizing a sales funnel can help marketers and salespeople determine what a prospect needs to become a customer.

Basic Sales Funnel Segments

Sales funnels can be relatively simple, but as you get to know your audience, you may choose to build out your funnel with more specific levels. Here are a few common stages:

  • Awareness: The prospect becomes aware of your product, typically as a result of advertising efforts.
  • Lead Capture: Through an inquiry or conversion via a lead magnet, the lead provides their contact information and enters your sales funnel.
  • Marketing-Qualified Lead: The lead takes an action (eg, engages with content) that makes them marketing qualified, which means their behavior indicates an interest level that makes them more likely to become a customer.
  • Sales-Qualified Lead: The lead indicates buying behavior and progresses to a sales-qualified lead. At this stage, the lead is assigned to the sales team.
  • Sale: Ultimately, the lead becomes a customer.

In its simplest form, you can build a sales funnel with three levels: top, middle, and bottom. Each corresponds to a certain level of knowledge and interest on the prospect’s part. Let’s dive a little deeper into each of those segments.


Prospects at the top of your funnel are just beginning their sales journey. Top-of-funnel leads are typically in various stages of qualification. These top-of-funnel leads are often attracted with a lead magnet: a piece of enticing content for which a prospect is willing to provide their personal information.

Top-of-Funnel Tactics

  • Advertising
  • Lead Magnet Content Marketing
  • Education


Leads in the middle of your funnel have progressed past high-level interest and are becoming more qualified to purchase. These middle-of-funnel leads are actively engaging with content and are proactively searching for information.

Middle-of-Funnel Tactics

  • Nurturing Sequences
  • Educational Content Marketing
  • Clinical and ROI-Based Case Studies


The bottom of your funnel should include the most qualified leads. They have graduated from showing interest, and you can now consider them sales-ready leads. You can then assign these leads and transition them to the sales team to close.

Bottom-of-Funnel Tactics

  • Phone Calls
  • Product Demonstrations
  • Sales Meetings

Marketing and sales teams often formalize their sales funnel progressions in a CRM through a lead management and opportunity tracking process. Within most CRMs, you can rate leads as hot, warm, or cold, to help indicate when they are sales-qualified. Deal or opportunity tracking processes track the progress of a lead when it becomes sales qualified.

For more information on building out your sales funnel, check out this in-depth guide from Udemy.