Understanding the Stages of the Sales Funnel

Starting a business is very difficult and one of the most challenging aspects in this process is finding a customer base who will buy your products and/or services. However, once you’ve adequately defined who you want to sell to, you’re halfway towards closing those vital sales. You can then direct your marketing towards these people to spark interest in them about you and your company. To get you the other part of the way, you need to understand the stages of the sales funnel and how you can leverage this for your business.

What is the Sales Funnel?

Crazy Egg defines the ‘sales funnel’ as such: “The path website visitors take on the way to buying your product or service”. You’ll need to make sure that the people who’ve expressed interest in your products and/or services are directed into this funnel so that they can be shifted towards making a purchase.

The stages of the sales funnel are as follows:

  • Lead,

  • Prospect,

  • Qualified prospect,

  • Committed, and

  • Transacted.


In the introduction to this article, we spoke about the people who show an interest in your company. These are also called ‘leads’. These people will have been attracted to your brand for several reasons, such as:

  • They are interested in what you offer,

  • They’ve been invited to your company by a lead magnet such as a free eBook, and/or

  • They’ve searched on Google and have found you.


Now that the leads are in your sales funnel, you need to convince them to buy from you. In other words, they need to become a prospect that has confirmed that they are interested in purchasing from you.

A good way of turning a lead into a prospect is by sending them a series of customer journey emails which are designed with the sole purpose of convincing them of the benefits of what you offer.

Qualified Prospect

The next step in turning your lead into a sale is the ‘qualified prospect stage’. This is where the real work starts. During this stage, you need to make sure that the prospect has the means to be able to buy your product and/or service.

In the world of traditional sales and marketing, it is during this stage that the sales executive will go and visit the prospect, introduce their product or service offerings and move the prospect along the journey towards making a sale.

With digital marketing, it is still possible for the sales executive to personally interact with the customer. This can be done by using tools such as Skype and Zoom that facilitate conversations over the Internet. Alternatively, another useful tool that many companies have instituted on their website is the chat bot. This enables potential customers to chat with a sales agent, in real-time. This means that these agents will have the opportunity to move these prospects towards making a sale.


During this stage, the customer has committed to buying your offering. An excellent example of this stage, in an eCommerce environment, is when a customer starts to add items to their cart. In an offline environment, the committed stage is demonstrated when the customer picks up an item off the shelf and heads off to the till to purchase it.


In this stage, the customer buys the product and/or service.

A Leaky Funnel

As a digital sales manager, it is your job to make sure that your leads stay in the funnel – through all five stages – and progress to concluding the transaction. However, there are certain times when people exit your sales funnel.

In stages 1 and 2, this is to be expected as sometimes people may have misunderstood what your product and/or service offering was or, on closer examination, they feel that your offering will not fulfill their needs. Don’t worry if you have a high drop-off rate here. Ultimately, you want only people who are serious about buying from you to progress further down the funnel. If you carry on having such a high drop-off rate over many campaigns, you may want to look at finding other channels to conduct your digital marketing campaigns in as your current channels aren’t providing qualified leads.

However, if a lot of people drop out of your funnel at stage 4 you need to take a serious look at the reasons for this. They have all but committed to buying what you’re offering however, something made them back out of the transaction. Take a careful look at what is stopping people from buying from you and take firm steps to fix this.

Nurturing your leads into sales isn’t always easy. Your sales and marketing staff will probably need training to improve their closing power. This being said, lead generation and nurturing is not rocket science. Anyone, with a little patience and dedication, can learn how to generate and nurture leads.