How to Use the Funnel to Optimize B2B Lead Conversion

J. David Green
November 27, 2018

How to Use the Funnel to Optimize B2B Lead Conversion

To increase the conversion of marketing leads into pipeline and closed-won business, you need an in-depth understanding of the funnel. The reason is simple.  B2B is tremendously complicated and getting more complicated every day.  Business buying behavior is complicated and marketing technology is increasing complexity.

Without a funnel, it’s hard to see where and why revenue leaks are happening.  SiriusDecisions commercialized this way of measuring the funnel and if you have the money to buy their two-year commitment, doing so is highly worthwhile.  I architected a version of the funnel below 20 years ago and have been refining its use ever since.  Enjoy.

Establish and Use a Common Funnel Language for Sales and Marketing

To get sales and marketing to work together, it helps to have a common language for the key milestones across the sales and marketing funnel.

Probably nothing in the B2B lexicon has created as much misunderstanding as the word “lead.” To marketing, these can be lists, people who subscribe, people who download, and people who register. To sales, “leads” are akin to opportunities, which means sales thinks the prospect has a reasonable chance to buy something.

For that reason, the name of these macro-level funnel stages needs to be easy to remember and descriptive of the stage. Here then are my suggestions for the top-level funnel stages for sales and marketing:

Target Market, Opportunities, Pipeline, and Closed-Won Deals are used universally and everyone seems to understand what they mean. Exchanges, Conversation Leads, and First Sales Meetings are my coinage because they better describe the outcome of the stage than terms like Inquiry, Marketing Qualified Lead, Automation Qualified Lead, Sales Accepted Lead, and Sales Qualified Lead. Plus, we really should use the word “lead” more carefully, moving it a little closer to what sales thinks of as a lead: someone who is in the target market and wants to have a conversation with sales about buying the product.

Target Market

Definition. The companies, decision makers, and influencers who look like your ideal customers for each solution you sell. In the largest companies, there may be dozens or even hundreds of people who can buy or influence the purchase of your solution(s). There may even be multiple, discrete opportunities for you to sell your solution to these large enterprises. Factor in such considerations when assessing your target market.

Purpose. Understanding the number of people and companies you are trying to reach is a sanity check on your media plans and your deployment of sales resources. It’s also a sanity check on any forecasts you might make.


Definition. People who share their contact information with you in exchange for information access, updates, or other information exchanges. People commonly call these “leads,” “hand-raisers,” and “inquiries.” As mentioned previously, the word “lead” has widely different meanings to sales and marketing, ranging from a list to a sales opportunity. Inquiry implies human interaction. Really, what you have is an exchange. Someone shares contact information in exchange for something (usually premium content). It’s a trade.

Purpose. Getting prospects to willingly share their contact information with you gives you the opportunity to much more intentionally build a relationship with them and assess their likely value. You can also tailor what you say based upon the company they work for, their areas of interest, their depth of interest, and so on. Unlike a list, the person generally has some idea about your value proposition, so they are more likely to become customers than those who don’t know you. Thus, while you can obviously identify without their permission people and companies in your target market, identifying those who have some interest is much more valuable to you than a mere list.

Conversation Leads

Definition. Conversation leads are people you believe would like to talk with someone about your solution. There    are two key sources: those that marketing generates and those that sales or an inside prospecting team generates. Sales can include channel partners when there is a deal registration process or some other level of visibility.

Purpose. Many people will subscribe to your blog, register for your event, fill out one of your web forms, and so on, but a much smaller number will talk to your sales people. Thus, identifying the small subset of Exchanges that are worthy of engagement by sales or an inside team dedicated to lead follow-up is a significant milestone in their Path to Purchase. Understanding the volume of Conversation Leads marketing generates as well as those sales generates puts the funnel picture into the proper context for both sales and marketing.

Specifically, sales has a capacity, and filling that capacity with people who are interested in talking to them and who fit the ideal customer profile for a given solution is a critical success factor for increasing sales productivity. In contrast, the more time sales spends looking for people to talk to, the less capacity they have for closing business.  Thus, marketing should strive to increase sales production cost effectively by delivering the appropriate volume of Conversation Leads to sales.

Get the free ebook, “How to optimize your demand operations.” It includes detailed how-to information for practices at each stage of this funnel.

Initial Sales Meetings

Definition. The customer attends an initial meeting (often over the phone) with someone from sales. There is nuance here that largely depends on the lifecycle of the product(s) or service(s). For products early in their lifecycle, sales typically needs less qualified meetings; later in the lifecycle, sales needs a higher level of qualification. These distinctions typically fall into three categories:

  • Level 1 (early in the solution lifecycle): A Conversation Lead that has a qualified decision maker or decision influencer working at an account in the target market, interest in the solution area, and wanting to talk to sales
  • Level 2: A Conversation Lead that fits the above criteria but also has prioritized the problem(s) as one to address
  • Level 3 (late in the lifecycle): A lead that fits the above criteria but also has a specific timeframe for a decision

Purpose. This stage gives marketing and sales an early indicator of the likely percentage of Conversation Leads that will convert into pipeline and closed-won sales. Rapid feedback at this stage can enable marketing to tune the scoring model and improve upstream demand generation practices, based upon feedback from the most qualified prospects.


Definition. An Initial Sales Meeting in which sales has spoken with the prospect and believes there is a reason to continue the discussion (and ideally has booked a follow-up meeting on the call).

Purpose. Rapid feedback on opportunities passed to sales is critical for process improvement, both to improve upstream follow-up and to clarify downstream understanding of sales follow-up obligations. This rapid feedback is also a key input to AI models that score leads.

Get the free ebook, “How to optimize your demand operations.” It includes detailed how-to information for practices at each stage of this funnel.


Definition. An Opportunity that warrants a proposal.

Purpose. Because the buying cycle is often many months, getting an earlier sense of the potential revenue contribution is very helpful for both sales leadership and those in marketing analyzing the effectiveness of upstream resources that generated the opportunity.

Closed-Won Deals

Definition. These are opportunities that sign contracts and receive one or more products or begin to receive services. There are two revenue numbers that should be attributed to closed-won deals:

  • The contracted revenue, less any downstream adjustments that may occur
  • A calculated lifetime value so that the company can put upstream investments into proper context

Purpose. Conversion rates need the additional clarity of revenue because not all wins have equal value. Further, upstream conversion rates can mislead those involved if there is not a worthwhile downstream outcome, especially at this and the next stage.

Next Sale

Definition: Closed-Won Deals you have renewed/rebooked or otherwise cross-sold something to after the original deal had closed.

Purpose. You want to see if customers you close like you enough to continue to buy from you. It is, therefore, an early look at lifetime value probability and solution/market fit.

Get the free ebook, “How to optimize your demand operations.” It includes detailed how-to information for practices at each stage of this funnel.

Further Reading

Lainey Mebust
September 18, 2018
. 5 min read