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Defining the Sales and Marketing Funnel: Prospects, Leads, Opportunities, & Clients

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There always seems to be a good amount of confusion around the terminology used in the Sales and Marketing funnel and CRM systems.  We’ve written this article to help clarify the terms used in the Sales and Marketing funnel by looking at the steps in each funnel as well as a potential customers buying process. 

Opportunities, Potentials, Leads… Whatever you want to call it, we’re talking about a piece of information that could lead to a sale.  Where does one start and the other one finish? Read more to find out… 

This post is a write-up from an email I sent to another startup that was setting up a new CRM system.  If you have any questions or if there is anything I can help you with, please feel free to email me, collin [at] voltagecrm.com. 

The Sales & Marketing Funnel

The following are high-level steps of the Sales & Marketing funnel, each step may have it’s own set of sub-steps or stages based on how customers buy from you. 

Prospects

A list or database of names that you are currently marketing to.  They are not yet ready to engage in a buying conversation.  

List/Database sources: InfoCANADA/USA, Hoovers, Dunn & Bradstreet, or Jigsaw

Leads 

A Lead is a Prospect that has responded positively in some way to a piece of your marketing.   

They may or may not be ready to engage in a buying conversation.   

Lead sources: Your website, blog, social media, tradeshows, whitepapers, webinars, etc…

Opportunity 

An Opportunity is a lead that has been qualified* and is ready to engage in a buying conversation with a member of your sales team. 

Sources: Leads, Referrals, etc… 

*Qualification criteria – their needs fit with the solution you’re selling, they have budget, authority, and a timeline to meet.  Could be any one or more of these. 

Clients

Have purchased a product or service from you.

The Buying Process

Now, I’m going to flip this around and talk about the stages that a potential client goes through when they buy from you. Generally, there are two stages: Research and Execution.  

Research

Buyer discovers a problem or an opportunity to improve but doesn’t know if it will be worth solving. This is where your marketing department will get involved.  It’s their job the company involved in as many of these types of conversations as possible.

  1. Attention - They probably starts off life not knowing much about your product, service, market, or industry.  But then something happens and creates a problem, it could be a painful event (something broke/missed targets/etc…) or a pleasure event (want to improve the quality of X/want to decrease time spent on Y).   
  2. Interest - A commitment is made by the buyer to look into a solution and to evaluate the cost of fixing/improving it.  Here they’ll do their research and reach out to others in their network that have been involved in similar projects.

  3. Desire - After researching the problem, the buyer decides the problem is worth fixing and makes a decision to fix it.

  4. Action - The buyer starts actively reaching out to vendors for product-specific information.  


Execution

Buyer (and organization) decide the problem is worth solving and begin evaluating solutions. This is where your sales department gets involved.  It’s their job to help the buyers evaluate the fit and ensure a positive transition from assessment to implementation. 
  1. Awareness - During their research they may have come across a few vendors, now they are expanding their search to ensure they have a comprehensive toolkit of potential solutions. 

  2. Interest - They’ve narrowed down their search to a few potential sources and are diving deeper into your solution.

  3. Trial - They test drive the potential solutions (if possible), look at demos, watch video walk-throughs of the product.

  4. Proof - This could be an active demo or as simple as talking to past customers.  The buyer is looking to find companies similar to theirs that have gone with your solution to see how it turned out for them. 

  5. Purchase - A decision is made and money/goods/services exchange hands. 

Most prospects will jump around between stages or have their own internal process that they must follow. Our job, as Marketing and Sales organizations is to ensure our potential clients have the right resources available to make an educated decision about purchasing from our companies. 

  • Alexandra Skey

    One of my favourite posts from VoltageCRM! Great overview of the marketing and sales funnel.

    What do you think the biggest channel is in setting up successful channels?

  • Collin Stewart

    The biggest challenge is testing and finding the right channels for your company. Even direct competitors will have different channels or go to market strategies, it all depends on what works best given the resources you have.

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