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Which is More Effective: A Sales Funnel or a Sales Pipeline?
Blog / Sales Management / Jul 11, 2017 / Posted by Nikolaus Kimla / 1660 

Which is More Effective: A Sales Funnel or a Sales Pipeline?

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While this might seem a strange title for a blog post, having a clear difference between these two terms in mind can mean a great deal to your sales reps, your sales team and you company. It can also have a profound influence on the choice of a CRM solution.

Sales Funnel

You’ve seen a funnel. If you pour a liquid through it, gravity pulls the liquid down through the funnel, top to bottom. It is actually unfortunate that this demonstration, based on natural law, was some time ago applied to sales. In sales the concept is translated to leads being poured through the top of a sales funnel. The idea is that they nearly automatically (much like a liquid in the science example) fall down through the funnel. They became opportunities as they move through the funnel, and some come out the bottom as leads.
There is a major problem with this concept: within sales, gravity doesn’t exist. Where you have a high number of leads, there is no assurance at all that they will turn into opportunities on the way down, and close as they come out the bottom. For leads to develop into opportunities, a live person must be actively involved with every step of the process.

Sales Pipeline

If you look at how sales are actively made, you’ll see that the concept of a sales pipeline is much closer to reality. Leads come in on the left side and are actively moved through the pipeline’s stages. Salespeople are applying their skills at every stage.
For that pipeline to work, it must be based on an established and successful sales process. A sales process is that exactly prescribed series of steps that a sale must pass through from lead all the way to a close. A sales process is normally developed out of the successful sales methods of proven reps, so that new and lesser experienced salespeople can stick to sales actions that have worked well. Sales management is also greatly assisted by a sales process as the whole team will be on the same page.

Choice of CRM Solution

Because it isn’t a reflection of how salespeople actually work, any CRM application based on the sales funnel concept won’t be intuitive or logical, and won’t end up being used. In order to track sales, sales reps end up resorting to their own solutions such as notes or spreadsheets—and when this happens the data from these is unavailable to the remainder of the team and, most importantly, the sales manager. For management, this leads to a great deal of time wasted chasing up numbers and obtaining sales status reports.
A CRM solution works best when based on the concept of the sales pipeline. That means that it intuitively and logically mirrors a company’s sales process, and expresses it visually. If done right, any opportunity can be rapidly located within its appropriate pipeline stage.

Such a tool is a powerful enabler for salespeople—and in fact it will be found that they actually enjoy using it. Recording and retrieval of data is easy, because that data fits logically into CRM. A salesperson can rapidly view their pipeline and quickly estimate what is needed to finish off a successful month or quarter. And best of all, sales reps are on top of their sales and in control—in every way.

CRM designed this way also eases the burden of sales management considerably. Instead of having to constantly chase up data from salespeople, management can obtain everything they need right from the CRM solution.

Have a look at your sales operation and CRM: is it a sales funnel, or a pipeline? Turn it into the latter, and watch your sales soar.

Pipeliner CRM has been designed from the ground up to empower sales pipelines. Download a free trial now.

About Author

A 30-year veteran of the computer industry, Nikolaus has founded and run several software companies. He and his company uptime iTechnology are the developers of World-Check, a risk intelligence platform eventually sold to Thomson Reuters for $520 million. He is currently the founder and CEO of Pipeliner Sales, Inc., developer and publisher of Pipeliner CRM, the first CRM application aimed squarely at actually empowering salespeople.Also a prolific writer, Nikolaus has authored over 100 ebooks, articles and white papers addressing the subjects of sales management, leadership and sales itself.