Product management glosary

Sales funnel

What is Sales Funnel?

As a product manager, understanding the sales funnel is crucial to the success of your product. A sales funnel is a marketing concept that describes the journey a potential customer takes from being aware of your product to becoming a paying customer. It is a visual representation of the customer journey, and it helps you understand how to optimize your marketing efforts to increase conversions and revenue.

Stages of the Sales Funnel

The sales funnel consists of several stages, each of which represents a different step in the customer journey. These stages are:

  • Awareness: This is the stage where a potential customer becomes aware of your product. They may have seen an advertisement or stumbled upon your website.
  • Interest: At this stage, the potential customer is interested in your product and wants to learn more. They may have read some of your content or engaged with your social media posts.
  • Consideration: In this stage, the potential customer is considering whether or not to purchase your product. They may have added items to their cart or requested a demo.
  • Conversion: This is the stage where the potential customer becomes a paying customer. They have made a purchase or signed up for a subscription.
  • Retention: The final stage of the sales funnel is retention. This is where you work to keep the customer engaged and coming back for more. You may offer loyalty programs or special promotions to keep them interested.

Why is the Sales Funnel Important?

The sales funnel is important because it helps you understand where your potential customers are in their journey and how to best market to them. By understanding the different stages of the funnel, you can create targeted marketing campaigns that speak to the needs and interests of your potential customers. This can lead to increased conversions and revenue for your product.

Additionally, the sales funnel can help you identify areas where your marketing efforts may be falling short. For example, if you notice that many potential customers are dropping off at the consideration stage, you may need to improve your product descriptions or offer more detailed demos to help them make a decision.


The sales funnel is a critical concept for product managers to understand. By mapping out the customer journey and identifying areas for improvement, you can optimize your marketing efforts and increase conversions and revenue for your product.