What is the sales funnel?
The sales funnel metric provides an overview of the pipeline in development during the period, displaying the amount of opportunities that are in each stage of the funnel. This metric can be measured according to the number (Count), total contract value (TCV) or Annual Recurring Revenue (ARR) of opportunities in each stage.
Why is the sales funnel important to measure?
The sales funnel metric represents the key sales funnel and opportunity development process. It is used both to present the current stage of opportunities in the pipeline, as well as provide the basis for other important metrics such as the progression rate to later funnel stages and then to the win rate of opportunities that passed through each stage.
How is the sales funnel calculated?
Calculating the sales funnel involves summing the amount of opportunities that are in each stage during each period. Using the history of opportunity changes, the metric presents the amount of opportunities which were in each stage in both the current and previous periods.
There are three common variations of the sales funnel which are used for different purposes:
- Sales funnel (active) - The amount of opportunities that were active in a specific stage at any point during the period. “What is the total number of opportunities in each stage during each period?”
- Sales funnel by entry cohort - The amount of opportunities which entered the stage during the period (cohort). “How many new opportunities are created and moved into each stage of the sales funnel?”
- Sales funnel snapshot - The amount of opportunities that were active in the stage at the end of the period. “What is the amount of opportunities in each stage of the funnel when the period ended?”
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All the SaaS revenue metrics you need
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Also known as
- Sales pipeline conversion funnel
- Sales process flow
- Sales progression
- Sales journey
- Sales conversion funnel
- Sales flowchart
- Customer acquisition funnel