The funnel is a picture of how many buyers sit at each stage. Many enter the top, few leave the bottom. Its value is that it turns “why are sales weak?” into a question answerable with a number: at which stage exactly are we losing more than we should?
1 The stages of the cycle
Prospecting
Finding who might need the product
Qualifying
Is there a need, a budget, authority?
Discovery
Understanding the problem and the current state
Proposal
Presenting the solution, price and terms
Negotiation
Handling objections and reaching agreement
Closing
A signed order and the start of delivery
Six stages, each with a clear output that must exist before moving on
Qualify before discovery, not after
Four questions save weeks: is there a real need? and is there a budget? and who decides? and what is the timeframe? If two of them are missing, the opportunity is not an opportunity — it is activity that keeps the rep away from better ones.
2 Reading the funnel in numbers
| Stage | Count | Conversion |
|---|---|---|
| Prospects | 500 | — |
| Qualified | 200 | 40% |
| Proposal sent | 120 | 60% |
| In negotiation | 40 | 33% |
| Deals closed | 30 | 75% |
Overall conversion is 6% from top to bottom. But the number that matters is 33%: two-thirds of those who received a proposal never even reached negotiation.
The decision: doubling the 500 to 1,000 achieves nothing — the same leak scales with it. The priority is fixing what happens between “proposal” and “negotiation”: is the price too high? Is the proposal unclear? Or is it reaching someone with no authority to decide?
3 Metrics you cannot do without
| Metric | How it is calculated | What it tells you |
|---|---|---|
| Win rate | Deals won ÷ deals decided | Quality of opportunities and closing skill |
| Average deal size | Total revenue ÷ number of deals | Are we selling small and working hard? |
| Cycle length | Average days from qualifying to close | How fast effort turns into cash |
| Pipeline coverage | Value of open opportunities ÷ target | Is what we have enough to hit the number? |
| Stall rate | Dormant opportunities ÷ total open | How much fiction is in the reports |
Zombie opportunities
An opportunity open for eight months with no activity is not an opportunity, but it stays in the report, inflates coverage and falsely reassures management. Set an automatic closing rule: any opportunity with no documented contact within a set period moves to “lost” until the rep reopens it with a reason.
4 Objections are signals, not refusals
- “The price is high” — usually means the value is not yet clear, not that the number is large.
- “We will get back to you” — usually means the decision-maker was not in the room.
- “We already have a supplier” — ask what does not satisfy them about it rather than attacking the competitor.
- “Not now” — find the time driver: a contract ending? a budget? a project?
- Silence — the most dangerous, because it gives you nothing to work with; ask for an explicit decision even if it is a no.
Lesson summary
- The cycle has six stages, each with an output required before moving on.
- Early qualifying saves weeks: need, budget, decision-maker, timeframe.
- The funnel turns a vague complaint into a specific leak with a number on it.
- Doubling the top without fixing the leak doubles the waste, not the revenue.
- Stalled opportunities inflate coverage and mislead planning, so close them by rule.
5 Test your understanding
Three quick questions
Pick the answer you believe is correct and you will see the result immediately.
1. A company loses two-thirds of its opportunities between proposal and negotiation. The best action:
Pouring more into a leaking funnel multiplies the waste; fix the hole first, then widen the inlet.
2. An opportunity has been open for eight months with no documented contact:
Closing by rule preserves the data for analysis while stopping the reports from being inflated.
3. A customer says “the price is high” in the first meeting. Most likely it is:
An early price objection usually reflects the absence of a clear comparison between cost and return.