Sales vs. Marketing Funnel: Understanding the Differences and Similarities
The funnel is a classic model showing a prospective customer's path toward becoming a paying customer. In the age of inbound marketing, both marketing and sales teams must work together to achieve revenue growth. Each is responsible for specific activities that lead to conversions or sales. These activities are mapped on the customer journey and can be distinguished into marketing and sales funnels.
Marketing and sales funnels break the customer journey down into touchpoints and micro-conversions. Businesses that use the funnels are able to ensure focused and efficient marketing and sales activities, contributing to revenue growth. Planning resources, time, and money becomes structured, visible, and less challenging.
Marketing and sales funnels are similar in that they work towards a common goal of converting a sales prospect into a paying user. They’re also different as they focus on different objectives along the sales path.
I. Defining the Sales Funnel
A sales funnel is a model that takes a lead qualified by the marketing team through to conversion.
A. Sales Funnel Components and Stages
The components of a sales funnel are conversion, retention, and loyalty.
The stages of the sales funnel are:
Marketing qualified lead (MQL) at the top of the funnel: This is someone who has shown interest in becoming a customer by filling out a form or downloading content.
Sales accepted (SAL) at the middle of the funnel: The sales team has accepted a lead and focuses on moving them to the next stage. The speed at which the lead will be moved is determined based on KPIs shared between marketing and sales teams.
Sales qualified lead (SQL): As the lead has indicated their interest in purchasing your product or subscription, negotiations begin. There are two outcomes: the lead commits and buys or backs out.
B. Objectives and Key Metrics
The main objective of a sales funnel is to convert prospects into customers.
Key sales funnel metrics are:
Conversion rate: The number of sales divided by the number of leads.
Cycle time: The time it takes for a prospect to move from one milestone to another within the sales funnel.
Average deal size: The total number of deals divided by the total dollar amount of those deals.
Total sales: The total amount of revenue generated from sales over a given period of time.
Free trial to paid conversion rate: The number of trial users who became paying customers divided by the total number of trial users during a given period of time.
Brand loyalty: Post-sales metrics are important to identify loyal customers, and the opportunities for revenue expansion from them. Net promoter score, customer retention rate, and customer lifetime value (CLV) are common metrics to measure brand loyalty.
II. Defining the Marketing Funnel
A marketing funnel captures all the steps a potential customer will go through before being handed off to sales for conversion. While it focuses mainly on marketing, it also connects marketing activities and teams with sales tasks and teams.
A. Marketing Funnel Components and Stages
The components of a marketing funnel are:
Demand generation: It involves the use of marketing campaigns and strategies, including content marketing, SEO, email marketing, social media posts, online ads, and more.
Lead generation: This is the process of gathering leads through landing pages, lead magnets, website copy, and other brand messaging and getting them on board with your product.
Lead nurturing: After prospects have shown an interest in your product and shared their contact details, marketing teams build stronger relationships with them through tailored content and personalization, such as case studies, email messages, and knowledge resources.
Marketing funnel stages are as follows:
Top of the funnel (TOFU): The aim here is education and brand awareness to create differentiation and trust.
Middle of the funnel (MOFU): The marketing team provides leads with ebooks, whitepapers, case studies, webinars, and other resources that show use cases, problem-solving, and goal fulfillment.
Bottom of the funnel (BOFU): The messaging here includes demos, free trials, and actionable CTAs. From here, sales can take over. For example, salespeople can contact freemium leads for assisted conversions.
B. Objectives and Key Metrics
The objective of a sales funnel is to build brand awareness and closer relationships with prospects.
The key marketing funnel metrics tracked are:
- Brand awareness by tracking brand mentions and branded traffic
- Number of leads entering the sales funnel
- Number of demos requested
- Marketing qualified leads to product-qualified leads conversion rate (product-qualified leads are those who have tried your product and seen value from it).
III. Sales Funnel vs Marketing Funnel: Key Differences
A. Focus and Orientation
Marketing funnels are centered around prospects’ interactions with your brand’s content. Sales funnels have more to do with prospects’ interactions with your salespeople.
B. Timing and Touchpoints
Marketing happens first, followed by sales. Marketing touchpoints include your company’s website, social media pages, email, and search engines. The sales funnel touchpoints include product demos (usually for complex products), email, or phone calls/video conferences with decision-makers.
C. Ownership and Responsibilities
Neither marketing nor sales own the entire conversion funnel. Both work together to acquire new customers, ensure 360-degree customer management, and review and improve the customer journey map.
IV. The Similarities between Sales Funnel and Marketing Funnel
A. Interconnectedness and Alignment
Sales and marketing teams manage an integrated revenue funnel for which they’re both accountable at each stage of the funnel. Shared insights across teams, increased communication, and integrated sales and marketing metrics are some ways to achieve alignment.
B. Leveraging Marketing Efforts for Sales Enablement
Properly researching and qualifying prospects is crucial to close deals more easily and shortening the buying cycle. Syncing marketing and sales processes helps ensure that marketing teams can focus on customer engagement while sales teams focus on closing activities.
C. Feedback Loop and Continuous Improvement
To build a powerful funnel, sales teams should share the insights gained from interacting with customers back to the marketing team. This way, buyers will have the information they need to meet their goals or solve their problems at the right stage in the buying process.
V. Building an Effective Sales Funnel
A. Lead Generation and Qualification
Lead qualification is the process of categorizing a sales-qualified lead - someone who has a high probability of making a purchase - and moving them further along the sales process than other leads. A lead scoring model is commonly used to qualify leads and identify the best time to reach out. Leads are assigned scores based on various actions like opening an email or visiting a certain webpage. Based on the aggregate of these points, you’ll know what stage a lead is in.
Toplyne saves time on lead qualification with advanced segmentation, creating audiences based on the frequency and recency of product usage, CRM, and third-party enrichment data. Its behavioral scoring feature looks at product usage and demographic data to automatically identify sales opportunities from your self-serve funnel.
B. Relationship Building and Nurturing
B2B funnels emphasize relationship-building. The focus is on educating prospects on the value of your product. The marketing funnel helps achieve this goal partially; sales teams reinforce product value. Once prospects have indicated a desire to buy, immediate sales should be prioritized.
C. Conversion and Closing
Some examples of SaaS conversions are visitor-to-trial periods, trial-to-qualified leads, trial-to-paying customers, and freemium-to-paying customers. Offering a personalized experience and being easily reachable are crucial to closing deals successfully.
D. Post-Sales Follow-up and Customer Retention
Excellent after-sales service improves customer retention and increases the likelihood of repeat sales, longer contracts, or a move to a higher-priced plan. Apart from upsell and cross-sell opportunities, the follow-up sales support helps build stronger customer relationships, which can make it easier to gain referrals.
VI. Building an Effective Marketing Funnel
A. Attracting and Engaging the Target Audience
Marketing teams define the target audience based on their demographic and psychographic attributes and preferences, provide them with useful and relevant content, and run targeted ads that are displayed only to those who’re likely to be interested in your product.
B. Educating and Establishing Thought Leadership
From how-to and concept videos to case studies, ebooks, webinars, blog posts, LinkedIn posts, and whitepapers, there are a number of digital marketing solutions to provide your target audience useful content and demonstrate your expertise.
C. Lead Capture and Nurture
Lead capturing involves collecting information about visitors to your website, usually via forms, and building an email list. Nurturing is the next step and consists of sending personalized emails and targeted content.
D. Handoff to Sales for Conversion
Qualified contacts are passed to the sales team, along with the relevant information they need to continue nurturing the contact along the buyer’s journey.
VII. Strategies for Aligning and Integrating Sales Funnel and Marketing Funnel
A. Collaborative Planning and Communication
Marketing and sales work together to optimize the conversion funnel. One way is to ensure that customer-facing messaging and tone are consistent across marketing touchpoints like the company website and social media posts, and the conversations qualified prospects have with the sales team.
B. Shared Objectives and KPIs
Establish a common set of shared objectives and metrics around revenue, how they will be reported, and how the data will be sourced.
C. Data Sharing and Insights Exchange
Automate data sharing between both teams. Create an integrated process with feedback loops.
D. Sales and Marketing Technology Integration
Implement a technology stack that meets the needs of sales and marketing. For example, a software that uses marketing, customer, sales data, and AI-powered insights to identify ideal targets, recommend the best actions, and drive collaboration.
VIII. The Future of Funnel Integration and Customer-Centric Approach
SaaS companies are increasingly adopting AI-driven analytics to record and gauge target audience behavior. They’re leveraging patterns in user behavior to personalize the experience for every website visitor.
Smarter AI and machine language capabilities will drive funnel integration in the future. Marketing and sales teams will have more visibility into user actions, will be able to run experiments on messaging and offers, and gain deeper insights into visitors’ intent to make quick UX improvements. Better cross-collaboration and automation of repetitive tasks will save teams time for strategic and creative activities.
The goal of the marketing funnel is to draw potential customers to your brand. The sales funnel works towards converting prospects into customers. Both offer a picture of the customer journey, mapping efforts to outcomes to measure performance accurately and make improvements in an informed way.
The sales and marketing funnel show the same customer journey map but view them through the lens of either marketing or sales activities and objectives. Creating a unified conversion funnel makes sense where marketing and sales inform each other and work towards a common goal.
- Use automation to simplify resource-sharing, cooperation, and cross-collaboration
- Establish shared KPIs centered on revenue
- Ensure greater cohesion between sales and marketing strategies
- Prioritize the customer as the primary driver behind sales or marketing actions to achieve alignment more easily