Check Your Sales Funnel: Causes of Inefficiency and How to Fix Them

Sometimes it feels like your sales process is like an old car: you pour in premium fuel, but it still barely moves. If this sounds familiar, then chances are your sales funnel is “broken.”

In just a few paragraphs, we’ll break down your funnel into parts and fix all the issues. But first, let’s address an important point. If you still don’t have a sales funnel, welcome to the 21st century. Here, we launch rockets, not walking mammoths. And if you’re afraid of change or think, “It’s fine as it is,” you’re losing money, and this blog probably won’t help you. But if you’re ready to move forward, build your funnel, and I’ll show you how to make it efficient.

Right now, we’re going to analyze your sales funnel together and figure out why it’s not working (and why this happens in the first place), how to identify weak points in your funnel, and how to fix them to increase your profits.

A sales funnel is a clear path that a client takes on their way to making a purchase. Its goal is to simplify the decision-making process as much as possible.

An effectively designed funnel guides the client step-by-step toward a purchase and helps them understand why your product or service is exactly what they need.

It’s your key sales tool, your foundation. A well-functioning funnel won’t leave you wondering at the end of the month, “Where’s the money, and why didn’t we hit our target?”

A funnel provides complete control over sales. It helps you see where problems arise so you can address them promptly. Want to know how many leads convert into real sales? The funnel will give you the answer. Want to see at which stage you’re losing clients? The funnel will show you that too.

Are you confident that your managers are moving deals through each stage effectively? This is critical, and the funnel reflects the dynamics of your sales process. It also helps you analyze the deal cycle: how much time passes from the first contact to the final sale. You’ll be able to plan sales based on the duration of each stage.

Each stage of the funnel is structured to make it easy for the client to move from showing interest to making a final decision.

In the end, a well-designed funnel benefits both you and your clients: your managers close deals efficiently, and your clients get the product they need without unnecessary hassle.

Evaluate the entire sales cycle. Recall all the steps your sales team goes through with each client—from the first contact to payment.

Define the stages, for example:

1. Lead processing: First contact with the client, gathering information.
2. Sending a commercial offer: Presenting your product or service.
3. Negotiations: Your managers answer questions and address client objections.
4. Agreement: The manager records all arrangements in writing.
5. Invoice issuance: The client receives an invoice for payment.
6. Payment: The client pays for the product or service.

Understand the cyclical nature of this process since all these stages are repeated with each client.

An important note—do not confuse the stages of a sales funnel with statuses in your CRM system. Sales funnel stages are large time blocks for processing a lead. This means that you cannot have elements like “making a decision” or “send via dropshipping” as stages. These are tags in your CRM, not actual funnel stages.

The first and most critical problem is that your funnel might not exist at all. If you don’t have a clearly defined sales funnel, you’re running your business blind. You can’t track client progress, understand where you lose potential buyers, forecast sales, or allocate resources effectively at different stages of the sales process.

But if you do have a funnel, review it in the following cases:

• Few leads at the top: If you have insufficient potential clients entering the funnel, this analytics insight is your first warning sign.
• High drop-off at a specific stage: If you notice many clients “dropping out” at one particular stage, it indicates a problem.
• Low conversion rates: If the percentage of people progressing from lead to buyer is too low, it’s a clear sign of inefficiency.
• Long sales cycle: If clients take too long to move through the funnel, it may indicate issues, unnecessary stages, or missing key steps in your funnel.
• Mismatch with forecasts: If your actual sales consistently fall below projected figures, this signals problems in the funnel.
• Low-quality leads: If many of your leads don’t match the profile of your ideal client, this could indicate issues at the start of the funnel.
• Imbalance in stages: If one stage of the funnel takes disproportionately more time or resources, this is another warning sign.
• Low profitability: If the cost of acquiring customers exceeds the revenue from sales, this is a serious indicator of funnel inefficiency.
• Lack of repeat purchases: If clients don’t return for repeat purchases, this points to issues in the final stages of the funnel.

A sales funnel has several important indicators that help determine its effectiveness. These indicators are called metrics.

The first critical metric is the conversion rate between stages. It shows how many of your potential customers move from one stage of the funnel to the next. For example, how many people who showed interest in the product reached the negotiation stage.

Another essential metric is the conversion rate from the funnel entry. This metric indicates how many people from those who entered the funnel advanced further.

Every funnel has a key stage — the most critical moment in the sales process. The conversion from this stage to closed deals is particularly important. It shows how many clients who reached the key stage ultimately purchased the product.

Additionally, metrics include quantitative indicators. These are specific numbers, such as how many clients should be at each funnel stage according to your sales plan.

Regularly compare planned indicators with actual results — weekly measurements can help. This will provide insights into whether your sales plan is being met and where potential issues might be.

Sometimes a sales funnel may not work as efficiently as you’d like. There are several common issues that might arise.

1. The first problem is bottlenecks in the funnel. These occur when potential customers get stuck at a particular stage and don’t move forward. If the causes of these bottlenecks are unclear, the entire sales process becomes more complicated.
2. The second problem is the lack of clear goals at each funnel stage. For instance, sales managers might not know the exact results and metrics they need to achieve at a particular stage. Without clear goals, it’s difficult to evaluate performance and identify areas for improvement.
3. The third problem is the lack of specific tasks that help the client move forward in the funnel. Each funnel stage should include clear actions that guide the client closer to a purchase. If these actions are missing or ineffective, the client may “get stuck” or even leave the funnel altogether. In such cases, sales systematization can help your team address the issue.

Finally, when you calculate a funnel, you often do it for the entire department. However, it’s better to create individual funnels for each manager because some salespeople have higher or lower conversion rates. Some will need to work harder to achieve the same result, while others will require less effort. Some may even be able to handle a larger sales target. Therefore, it’s better to distribute leads unevenly, based on each manager’s individual funnel. Such funnel optimization will maximize the results of every team member.

For example, for one of our clients — a women’s clothing manufacturer, SERGIO COTTI — the “Raketa prodazh” team increased revenue from zero to $11,000 in just four months.

We not only implemented an effective funnel but also took a systematic approach to building their sales department, including setting up sales channels and defining KPIs.

If you also want to optimize the work of your sales team but lack professional experience, contact us. The “Raketa prodazh” team will develop and implement a sales department strategy tailored to your business needs, ensuring results.

Right now, take a piece of paper and draw your ideal sales funnel. You can include five stages in it.

Start with the first contact when a potential customer first learns about your product or service. This could be browsing your website or subscribing to your newsletter.

If the customer shows interest, they move to the next stage: interest. Here, they fill out a form, explore product pages, or ask questions. The next step is the agreement stage: the customer agrees to the terms or places an order.

After that, the salesperson issues an invoice, and the buyer, if satisfied, pays it and becomes your customer.
Now that you have a funnel like this, overlay real numbers, and you will get a clear picture of where your salespeople are getting stuck and what tasks need to be set.

We found that out of 2,000 initial contacts, only 9 payments were converted. This means that less than half a percent (0.45%) of potential customers become actual buyers.

On the other hand, if the client receives an invoice, the likelihood of payment increases to 75%. This means that out of 12 invoices, 9 are paid.

We can also calculate the conversion at each stage of the funnel:

• First contact → Interest: 6%
• Interest → Agreement: 20%
• Agreement → Invoice: 50%
• Invoice → Payment: 75%

This kind of sales funnel analysis allows you to forecast results. For example, to achieve 9 sales, you need to provide the salesperson with 120 leads. To get 120 leads, you need to generate at least 2,000 initial contacts per month.

• Take a close look at each stage of your funnel. Check how many clients pass through each stage and where they “get stuck.”

• Talk to your salespeople. They work with clients daily and can share the challenges they face. Perhaps the issue is insufficient motivation among your sales team.
• Ask clients about their experience. Their feedback will help you understand what they like and dislike about the buying process.
• Check if there are clear goals for each funnel stage. If not, establish them.
• Ensure that each stage has specific actions to help clients move forward. If these actions are missing, develop them.
• Analyze whether your product meets customer needs. You might need to make adjustments to the product itself.
• Verify whether clients receive enough information at each stage. Perhaps they lack the details needed to make a decision.
• Ensure that the sales process isn’t too long. If it is, consider how you can shorten it.
• Train your sales managers to work more effectively. They may need additional knowledge or skills, or perhaps you need a service to help structure your sales department.
• Use technology to automate certain funnel stages. This will speed up the process and reduce errors.
• Regularly review the results of your changes. Check if the metrics have improved after your optimization efforts.

To ensure your sales funnel works effectively and isn’t just a file on your computer, break it down over the course of a month. This means looking at metrics not only at the end of the month but continuously, as the funnel is filled throughout the period.

For example, in the negotiation stage within the B2B segment, these interactions accumulate gradually. Therefore, if your sales department needs to conduct 120 negotiations in a month, distribute them evenly across the number of days in the month. This gives you the required number of negotiations per day, which you can set as a plan and track in daily reports.

How to Analyze a Sales Funnel:

1. Define the funnel stages. Clearly outline all the steps a customer goes through, from the first contact to the purchase.
2. Collect data. Count how many clients pass through each stage of the funnel.
3. Calculate conversions. Determine the percentage of customers transitioning from one stage to the next.
4. Identify weak points. Pinpoint the stages with the lowest conversion rates. This type of analysis highlights problem areas.
5. Analyze the causes. Try to understand why customers “drop out” at these stages. Perhaps something deters them, or they lack information.
6. Develop solutions. Think about how you can resolve issues at problem stages.
7. Implement changes. Start applying your ideas in practice.
8. Evaluate results. After some time, reanalyze the funnel to see if the situation has improved.

Create a sales funnel tailored to the specifics of your business. Some stages might be similar for everyone, but in your company, the stages may have unique names. Use the ones that work best for you.

Teach your sales team to calculate the sales funnel manually. Only after they understand how it works should you automate it. Trust us, only the tools your team uses daily and fully understands will truly be effective.

After defining the stages of your sales funnel, gather statistics for each of them. Practice implementing a CRM and use the data. Analyze key metrics:

• Number of new leads per month
• How many leads progress to the negotiation stage
• How many leads each manager processes
• Number of confirmed orders
• For B2C: How many customers pick up their orders

Collect data over an extended period. Ideally, for six months, but at least for three if six months seems too challenging. Don’t analyze data from just one month—it won’t be enough for accurate conclusions.

Calculate conversion rates: overall, from lead to sale, and between each stage of the funnel.

Use the conversion data you collect to create your sales plan.

Create a separate sales funnel for each sales channel, each salesperson, each business segment, and each of your products.

With such detailed funnels, you’ll be 80% ready to optimize your process. By analyzing these funnels, you can easily see where the sales process “breaks” and where changes are needed.

A funnel helps you better understand the entire sales process. Determine how much time each sales stage takes and calculate how many client touchpoints are needed to close a deal successfully.

For example, in my business, we know that a successful sale requires 18 client touchpoints. This allows us to plan our managers’ work effectively.

If you’re a B2B company, the funnel can help establish a daily call quota for your managers. If you’re in B2C, it will show the daily conversion rate a salesperson should achieve.

If you don’t yet have a sales funnel, don’t be afraid to implement one. It’s not complicated and won’t take more than 3–5 days from data collection to the start of use.

If you want to improve your sales but don’t know how to effectively implement a sales funnel, the “Raketa prodazh” team is ready to help. We have experience setting up funnels for various types of businesses and can adapt this tool specifically to your needs. Over more than six years, we’ve developed expertise in 14 different niches and have optimized the work of over 100 sales departments, achieving an average revenue increase of +35%. Try these results for yourself.

Kateryna Chabanova