What is a sales funnel, what are its stages and how do you build one?
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Quick answer
A sales funnel is the path a contact takes to become a client, split into stages: from first contact to conversation, proposal and close. It's shaped like a funnel because each stage has fewer people than the one before. Tracking your funnel shows where sales get stuck and what to do next.
A sales funnel is the path a person takes from first contact with your business to becoming a client, split into stages. The name comes from the shape: many people enter at the top, fewer talk to you, fewer still get a proposal and some of them buy. Looking at the funnel shows which stage your sales get stuck in.
The most common stages
Names vary from business to business, but the logic is similar:
| Stage | What happens |
|---|---|
| Top: awareness | The person discovers you (a post, a Google search, a lead magnet). |
| Middle: relationship | You engage, the person replies, you talk. |
| Bottom: decision | Meeting, diagnostic and proposal. |
| Close | The person buys or decides it's not the right time. |
Many marketing resources use the AIDA model (attention, interest, desire, action) to describe the same phases from the customer's point of view.
Sales funnel vs. sales pipeline
The two terms go together. The funnel looks at the journey and the volume: how many came in, how many moved forward. The pipeline is the list of open deals, each in a stage, with its next action. In practice, a column board (kanban) shows both: the number of cards in each column is the funnel, and each card is a deal in the pipeline.
How to build a sales funnel
- Write down the steps the client takes, not your tasks. "Replied" is a stage; "send email" is a task.
- Define what moves a lead to the next stage. For example, it only goes to "proposal sent" once the proposal has actually gone out.
- Have a stage for those who didn't buy, like "lost" or "follow-up", with the reason noted.
- Review the funnel every week: where many people are stuck, action is missing; where there are few, new leads are missing.
Sales funnels in LUME Hub
The Sales app has three funnels, one for each way in:
- Prospector pipeline: for businesses found on Google Maps. The stages are yours: it starts with new lead, first contact, negotiating, proposal sent, won and lost, and you can create, rename and reorder them. See how to manage your sales pipeline in Prospector.
- Social Selling pipeline: for social media leads, with the method's stages (new, warming up, reached out, in conversation, booked, meeting held, follow-up, client, recycle and disqualified). The Dashboard shows the funnel for the chosen period. Learn the method in what is social selling.
- Each lead magnet's pipeline: whoever fills in a form enters that lead magnet's pipeline and Social Selling too. See how to create a lead magnet to capture leads.
In all of them, a lead is a card you drag from one column to the next: a simple CRM, no spreadsheet needed.
Frequently asked questions
What's the difference between a sales funnel and a sales pipeline?
Many people use them interchangeably. Generally, the funnel looks at the customer journey and how many people move from one stage to the next; the pipeline is the list of open deals, stage by stage, with what to do on each. In LUME Hub, the column board does both.
How many stages should a sales funnel have?
There's no right number. Ideally, each stage is a step the client takes, such as replying, booking a meeting or receiving a proposal. The Prospector pipeline starts with six stages, and you can change all of them.
Is a sales funnel useful if I sell services?
Yes, maybe even more than for products, because selling a service depends on conversations, meetings and proposals. Each of those phases becomes a stage in the funnel.
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