A sales funnel (also called a revenue funnel or pipeline) maps the journey from raw lead to paying customer. The "funnel" shape reflects the reality that only a fraction of prospects at each stage advance to the next.
Standard B2B Funnel Stages
Lead → MQL → SQL → Opportunity → Customer
- Lead: Any contact who has shown initial interest (downloaded content, attended a webinar, filled out a form).
- MQL (Marketing Qualified Lead): A lead scoring threshold has been met — demographic fit, intent signals, or engagement level.
- SQL (Sales Qualified Lead): Sales has reviewed the MQL and confirmed it is worth pursuing (BANT criteria: Budget, Authority, Need, Timeline).
- Opportunity: A formal deal has been opened in the CRM with an identified budget and a defined decision timeline.
- Customer: The opportunity is closed-won and revenue is recognised.
Why Funnel Modelling Matters
Funnel modelling lets you work backwards from a revenue target to the number of leads you need. If you need 10 new customers per month and your end-to-end conversion is 2%, you need 500 leads. If you can only generate 300, you either need to improve conversion or find more lead sources.
Common Funnel Mistakes
- Optimising the top when the bottom is broken — Doubling leads with a 10% close rate produces the same revenue as 500 leads with a 20% close rate.
- Misaligned MQL definitions — Marketing and sales disagreeing on what qualifies as an MQL inflates MQL counts while SQL rates collapse.
- Ignoring cycle time — A fast funnel (15-day sales cycle) compounds faster than a slow one (90-day cycle) even if conversion rates are equal.