A sales funnel is the sequence of stages a buyer goes through from their first enquiry to a purchase. It shows how many deals reach each stage, where buyers decide not to buy and where they are still waiting. To find a delay, you need to link the stage to a specific event in the purchase process and see how long a deal has gone without moving forward.
The funnel has been drawn, with amounts under the columns. The business owner looks at the largest column and expects the money to come in soon. But the label “Negotiations” includes both a buyer discussing terms and one who has been sent a proposal but has not replied. There is one total, but different reasons to expect the money.
I think it is too early to ask such a funnel to tell you “where the money is stuck”. First, you need to find out on what basis the deals were placed in each column. Otherwise, a new report will only add up the old assumptions more neatly.
Sales funnel in simple terms
A funnel helps you follow enquiries through to an outcome. At the start, there are people who have shown interest in your offer. Some will then decide not to buy, some will keep talking, and some will buy. The narrowing itself is normal: your product will not suit everyone who enquires.
There are two different views of a funnel. The first shows the path of one group of enquiries: how many reached discussion, agreement and purchase. The second shows the sales team’s current position: which deals are at each stage today. On screen, the two views look similar. But they answer different questions.
The first shows what proportion of sales started have reached an outcome. The second shows what the team is working on and where work has built up. If there are many deals at the stage of agreeing terms today, that does not yet prove poor conversion: a large group of buyers recently reached that stage. An empty column does not prove success either: deals leave it both when buyers pay and when they decide not to buy.
That is why I add another question to “how much money is here?”: what happened to the deals that were here before? Without it, a simple picture can all too easily become a source of reassurance for the owner.
Sales funnel stages: what allows a deal to move forward
Sales funnel stages depend on how people buy from you. For a service sold with a preliminary discussion, the following sequence works:
- Enquiry received — you have a request and a way to contact the person. A repeat message about the same request does not create a new deal.
- Need confirmed — you have found out what the buyer needs and established that your offer suits them. Sending a presentation alone does not confirm this.
- Proposal discussed — the buyer has reviewed the option, raised questions or confirmed that it suits them. An unanswered email remains an action by the salesperson.
- Terms agreed — both sides have agreed on what the service includes, its cost and the purchase process. Unresolved disagreements must remain visible.
- Payment received — the payment is confirmed in the accounts. If it is an advance payment, it is labelled as such; the full order value is not recorded as money received.
This is a basis for discussion with the team, not a compulsory set of names. For a purchase without an initial meeting, an unnecessary stage will only slow down the purchase process. If a site inspection is required before choosing a supplier, it is worth giving it a separate stage: the inspection has a person carrying it out, a date and an outcome that the proposal depends on.
For each move between stages, write down what must have happened to allow it, where this fact is recorded and who is responsible for obtaining confirmation. For example, confirmation from the buyer allows a move to agreed terms. The salesperson attaches the email or marks the relevant part of the conversation. The head of sales does not have to guess what the status means.
Names such as “Call”, “Remind” and “Write” are better kept for tasks. They are carried out at different stages and say nothing on their own about readiness to buy. Otherwise, a diligent employee will move the deal record further along simply because they have contacted the customer more often.
Declined deals must also have a way out of the funnel, with a reason. If the buyer has named a future date to return to the conversation, save it separately. But a customer’s silence gives you no grounds to set a new purchase date for them yourself.
Sales funnel example: proposal sent, purchase stalled
Let us look at the steps for selling a service with an initial meeting. The buyer describes what they need, the salesperson holds a discussion, prepares a proposal, agrees terms and receives payment. This is an illustrative example of a sequence of actions, with no results from a specific company.
The most interesting point here is sending the proposal. The salesperson has completed a substantial piece of work. It is tempting to move to the next stage in the CRM system. But the buyer has not yet said whether the proposed solution suits them.
The team needs to take different actions depending on the response:
- The buyer has pointed out that the proposal does not cover part of what they need. The salesperson clarifies the requirements and agrees on the changes. Evidence of progress — the buyer has confirmed that the new version meets their needs.
- The proposal is suitable, but someone else on the customer’s side is reviewing it. The salesperson finds out how the decision will be made and agrees how to pass the necessary materials to that person. Forwarding them does not in itself mean agreement.
- There is no reply. The salesperson finds out whether the buyer is still interested and which contact method is available. Until there is a reply, it is not even known whether the proposal is being discussed within the company.
If all these deals sit in “Agreeing terms”, the size of the column is almost useless for deciding what work to do. One buyer needs a revised version, another needs information to make a decision, and contact needs to be restored with the third. A general instruction to “push for the sale” does not specify any of these actions.
A sample note for the first case looks like this: “The proposal is missing part of the service requested. The salesperson checks what is included with the person delivering the service and sends a revised version by the date agreed with the buyer. Move forward once the buyer has confirmed what is included.” We take the amount from the current proposal and the deadline from the agreement. No probability made up based on the salesperson’s mood.
If making the changes requires someone who delivers the service and has no time, the obstacle is already within your company. Moving the deal record or making the salesperson call the buyer more often is not enough here. The head of sales must agree on a deadline for preparing the revised proposal or tell the customer straight away that the company will not provide the service in that form.
Sales funnel analysis: find where and why deals stop
Sales funnel analysis starts at the point where the way deals progress has changed. Fewer deals are moving on to proposal discussion, agreeing terms is taking longer, buyers are declining more often after a meeting — each observation calls for its own review. A single overall conversion rate for the sales team does not show where the delay is.
Start with this sequence:
- Choose the same purchase process: one product and a comparable type of customer. Review first purchases and repeat orders separately if they follow different steps.
- Find the stage where fewer deals are moving forward or more are waiting for a long time. Compare it with previous sales of the same type, not someone else’s “norm”.
- Open the deals at this stage along with their messages and calls. Find the last confirmed event on the buyer’s side.
- Establish what event is needed next and whose action is delaying it. Mark separately the deals where the reason is still unknown.
- Choose an action that addresses the cause you have found and a sign that will make the change visible.
I start with deals where the promised deadline for an action has passed, and with large amounts without confirmed progress. But I also look at deals that have successfully passed through the same part of the process: how did the purchase process, the customer’s requirements and the salesperson’s actions differ? Otherwise, it is easy to label a normal step as a problem when it is also present in successful deals.
Long waits need to be explained. The buyer gave a decision date in advance — the salesperson records the agreement and prepares everything needed. Our company promised a reply and did not give one — the head of sales gets a reply from the person responsible for the work. The customer stopped responding — the team restores contact and does not pretend that terms are being agreed when the situation is unknown.
Each case has its own result. A prepared reply must reach the buyer; restored contact must establish the current status of the purchase; an agreed meeting must take place. A note saying “reminded them” does not complete any of these tasks.
If all this is visible in CRM but the actions stay the same, a separate problem begins: how the head of sales uses the data. This is covered in the article ‘“Our funnel isn’t fully set up.” What did the head of sales do after that?’ Here, we first make sure that the funnel itself distinguishes between the reasons for waiting.
Sales funnel analytics: which figures to track together
From here on, we will use sales funnel analytics to mean the figures the team calculates regularly. They should help you choose which part of the process to review. I see no point in adding a figure just because CRM can produce it.
To start with, this set is enough:
- Number and value of deals at each stage — the amount of work and potential sales at this stage. This is the value of the proposals, with no promise of receiving it in full.
- Conversion between stages — the number of deals that moved forward, divided by the number that entered the starting stage, multiplied by 100%. We calculate this for one selected group and state the observation date. If no deals entered the stage, we do not calculate conversion.
- Time at each stage — separately for deals that have passed through it and those waiting now. The average time for completed moves between stages will not show old deals that have gone nowhere.
- Overdue commitments — what was promised by a particular date but not done. The date must refer to a real action.
- Decisions not to buy and their reasons — where the sale ended, what exactly the buyer said and what confirms it. An unknown reason remains unknown.
If the group includes recent enquiries, some are still following the normal purchase process. Show separately how many deals reached payment, how many ended with the buyer declining and how many remain open. Otherwise, today’s figure will look final, even though buyers are still deciding.
Do not divide the number of payments this month by the number of enquiries in the same month without a link between them. Money has also come in from older deals; new enquiries still have their stages to go through. You will get a ratio of two numbers that cannot tell you what happened to a particular stream of enquiries.
Another trap is adding up the amounts for each stage in a report on one group’s progress. One deal has passed through several columns in sequence, and its value is repeated. In the current list of active deals, it should be counted once. Show payments received separately from the value of what is still being sold.
Comparing salespeople requires the same conditions. If one handles repeat orders and another starts relationships with new buyers, the difference in conversion rates does not prove a difference in sales ability. First, compare similar sales.
Sales funnel report: a template for the business owner
A sales funnel report should separate the value of potential sales from the reasons for delay. I need a document that makes it clear which work the head of sales is already responsible for and which decision is still mine to make. A list of amounts by stage does not do that.
Below is a template you can fill in with your own data:
- Period and scope: which enquiries are included, which purchase process is being considered and the date the data was taken.
- Current position: the number and value of deals at each stage; payments received on a separate line.
- Change: how many deals moved forward, how many ended with the buyer declining and how many are still waiting. Any change to the proposal value is shown separately from progress.
- Point of delay: the stage, the deals and the value of their proposals. Separately — missed commitments and waiting until a date agreed with the customer.
- Confirmed reason: what the deal record and conversation show. Where there is no explanation, the question that needs answering is recorded.
- Decision by the head of sales: who will take a specific action, by what date and what result should follow.
- Decision by the owner: what goes beyond the head of sales’ authority and which options they propose, with the consequences for the deal.
In the incomplete proposal example, the last line stays empty if the head of sales has arranged the changes with the person delivering the service. The owner gets involved when the company needs to decide whether to take on additional work on new terms. A delay alone is not a reason to pass it on to the owner.
When you first review a report like this, open any amount in the delay row. It should reveal a list of specific deals, and each deal should reveal a confirmed event and an assigned action. If explaining it means calling the whole team again, the report has not yet been put together.
When the funnel still does not show where money is stuck
The stage names have already been agreed, but the deal record and the conversation still give different versions of what is happening. The salesperson marked agreement; the buyer asked for changes. Summary figures alone are not enough: the head of sales needs to compare the record with what was said and choose what to work on now.
AI ROP from RENTROP helps you see where money is stuck: it analyses calls and messages alongside the deal record, shows failures by stage with a quote and sends a report to the owner on Telegram. The service only reads data; decisions and instructions remain with people.
After an honest review, the value in the active funnel sometimes falls: deals that had already ended with the buyer declining have been removed. This is unpleasant, but now the head of sales is responsible for working with the remaining buyers. Money in a funnel chart promises nothing until you can name the buyer behind every amount and the event that will bring them closer to a purchase.