Every SaaS business needs revenue. But not every potential customer is ready to buy immediately, which is where a well-defined sales and marketing funnel comes in.
Many SaaS companies struggle with:
To help align your marketing and sales teams, we’ve defined the following lifecycle stages based on our B2B SaaS marketing experience.
By the end, you’ll know exactly how to define each funnel stage (also known as contact lifecycle stages) to reduce friction between sales and marketing, implement a clear handoff process to ensure smooth lead transitions, and optimize each stage to improve lead conversion rates and revenue growth.
Let’s dive in.
A B2B SaaS funnel is the structured process that moves potential buyers from awareness to a closed deal. It ensures that each prospect is nurtured appropriately based on their level of engagement and readiness to buy.
A well-structured funnel prevents wasted effort, keeps sales and marketing aligned, and ensures that potential customers receive relevant information at the right time in their journey.
However, not all SaaS companies define their funnel stages correctly, which can lead to inefficiencies that slow down growth and cause friction between teams.
For a funnel to function effectively, there must be a clear distinction between which team (marketing or sales) is responsible for each stage.
At the top of the funnel, marketing is responsible for generating awareness, capturing interest, and nurturing early-stage leads. This involves activities such as:
The goal at this stage is to attract, educate, and segment prospects so that only high-fit leads move forward into deeper engagement.
Once a prospect has demonstrated buying intent and meets the necessary lead qualification criteria, they move into the sales pipeline. At this stage, the sales team takes ownership, focusing on:
A smooth transition from marketing to sales is crucial for increasing win rates and ensuring no potential deal is lost due to misalignment.
Many SaaS companies struggle with mislabeling leads and mismanaging handoffs between marketing and sales. When this happens, the funnel becomes inefficient, leading to three major issues:
A well-defined funnel ensures that each lead moves through a structured qualification process before reaching sales. This minimizes friction, ensures marketing is generating high-quality leads, and enables sales to focus on closing deals rather than filtering out bad leads.
The key to fixing these issues is to clearly define and enforce funnel stages so that both teams understand their responsibilities.
In the next section, we’ll break down each stage of the funnel and how to structure it correctly to ensure better alignment, higher conversion rates, and ultimately, more revenue for your SaaS business.
Suspects or prospects are at the tip-top of your funnel. They are at the entry point and always will have the largest number compared to the rest of the funnel.
The objective is to build brand awareness and collect contact information for outreach. This stage is owned by marketing.
Suspects and prospects are the widest part of your funnel; they include cold outbound leads (suspects) and website visitors who show early interest (prospects). The objective here is to attract, identify, and engage potential customers through marketing and outbound efforts.
Your goal is to guide them toward an opt-in, such as subscribing to content or engaging with an ad.
It’s crucial to nurture your leads throughout each step of the funnel. Each lifecycle stage requires different content to give each lead the right information they need, at the right time. For suspects or prospects, the next steps include outreach - LinkedIn messaging campaigns - to drive connections (outbound) and retargeting cookied visitors with top-of-funnel blog content to drive awareness and have people “opt-in” to learning more about you.
If these contacts opt-in and express an interest in learning more, they move down the funnel to be subscribers. Exit criteria include the suspect accepting a connection request on LinkedIn, or filling out a form “opting in” to ongoing nurture campaigns and becoming a “contact subscriber."
One of the most crucial pieces of entry criteria for becoming a subscriber is that the contact has given us consent to send information to them. Consent could be giving us their email, subscribing to the blog or newsletter, or allowing event coordinators to give their information to participants in an event.
The objective is to convert passive interest into active engagement while collecting ICP data. This stage is owned by marketing.
To move them forward, you must qualify them as ICP-fit. A simple job title form field can segment subscribers into personas, helping you deliver relevant nurture sequences.
One way to do this is by delivering gated content with a form that asks for their job title. Once you know the job title, you can assign them a persona and move them down the funnel to become a lead.
Entry criteria for becoming a lead include confirming that the contact fits into your ICP and is assigned a persona.
Typically, they’ve filled out a form with their job title or come from ABM (account-based marketing) outbound work. Knowing that the contact fits into the ICP is necessary for most if not all ABM outbound work. This stage is owned by marketing.
To nurture leads, top-of-the-funnel (TOFU) and middle-of-the-funnel (MOFU) content works the best. These leads have shown intent but still aren’t quite ready to commit. You need to educate them on their pains and how to solve them. TOFU content includes relevant blog articles, buyers’ guides, and industry survey whitepapers while MOFU content includes relevant eBooks, case studies, and comparison battlecards.
The objective when nurturing leads is to drive demand to have the lead consider your solution. You want your leads to take actions that qualify them for sales development representative (SDR) follow up. Those actions give these leads a leadscore and if they pass the appropriate threshold (that you define), they move down the funnel to become a Marketing Qualified Lead (MQL).
Actions that a lead could take to pass the leadscore and qualify them as an MQL include a high-intent form fill, staying on the website for an extended amount of time, or interacting with multiple downloadable pieces of content.
MQLs by definition, fit the ICP, have given us consent to contact them, and have demonstrated intent by requesting a conversation with the SDR or sales team.
This stage is owned by the SDR who reports to the marketing team (or sometimes to sales, but it’s a very different role vs. the account executive). The objective when interacting with MQLs is to have the SDR do a follow-up to do initial sales-ready qualifications and schedule a meeting.
To move down the funnel, the contact must show up for the SDR call and show interest in talking with a sales executive. During the call, the SDR qualifies the lead by ensuring they’re not a competitor, customer, or both filling out forms.
After this stage is completed, the SDR changes the lifecycle stage to “sales qualified lead” or “sales accepted lead”. This is a critical stage in the journey, as the Marketing/SDR team now hands over responsibility for the ownership of follow-up to the Sales organization.
This is the first stage of the funnel that is owned by sales. The objective is for an account executive to perform sales opportunity qualification and convert the lead into an opportunity.
The entry criteria for SQLs include an SDR confirming interest, a meeting with an account executive being scheduled, and the contact is represented in the sales pipeline, typically as attached to a deal.
Because this stage is frequently the handover point between marketing and sales, it's essential that the two teams are clear on what this handoff looks like and that no leads, follow-ups, or important information are being lost in the transfer.
At this stage, the AE will perform the first sales call to do a detailed opportunity qualification. The AE must ask themselves, “Can we win? Do we want to win? Should we pursue this opportunity?” Do they have a high chance of choosing us as their solution? Do we want to be their solution? Will they be easy and pleasant to work with?
To move down in the funnel, the Account Exec. determines this is an opportunity that is worth pursuing. Be sure to update your CRM with a forecasted deal amount and close date.
Last but not least, is the opportunity stage of the funnel.
This lifecycle stage has been qualified by an account executive and is in the deal pipeline with an amount and expected close date. They are owned by the sales team with the objective to win the opportunity and turn them into a paying customer.
Actions to take include developing the opportunity through discovery, solution, demo, proposal, and close stages in the opportunity development process. To exit this stage, a contact must confirm their purchase by signing a PO or binding contract, thus becoming a customer.
Figuring out your funnel stages can be difficult. Not all leads should be touched by sales. Marketing is here to educate your leads, nurture them, and deliver qualified and ready-to-commit leads. Once your funnel (lifecycle) stages are defined and set up correctly, it’ll be much easier for your sales and marketing teams to align. It will alleviate any confusion in your pipeline and ensure the departments are well-oiled machines churning out MQLs and Opportunities like nobody’s business.
It's also important to note again that each business will need to tweak these marketing and sales stages to fit their own needs! Though we've found the cutoff points we've defined here to be effective for many companies in the B2B SaaS space, they won't work for everyone and should be conformed to fit your own business's needs.
Give the process of defining your stages a great deal of time and consideration. Remember that you can't "you cannot un-eat the fish" or un-qualify the lead—for funnel reports that are accurate now and useful in the future, you'll want to change your funnel stage definitions as little as possible over time. So it's best to get it right in the beginning!
Reporting on this funnel is the next step. Learn how to set up your go-to-market dashboard.
A well-structured funnel requires continuous optimization to ensure higher conversion rates, shorter sales cycles, and increased revenue efficiency. The key is to measure performance at every stage and refine your strategy based on real data, not assumptions.
To optimize your B2B SaaS funnel for growth, focus on:
Monitoring the right metrics allows you to diagnose issues and fine-tune your funnel. Here are the essential KPIs to track:
Top-of-Funnel (TOFU) Metrics: Marketing Performance
Middle-of-Funnel (MOFU) Metrics: Lead Qualification & Engagement
Bottom-of-Funnel (BOFU) Metrics: Sales & Revenue Impact
To scale efficiently, you need to spot and fix leaks in your funnel. Common bottlenecks include:
TOFU Bottlenecks: Low Lead Conversion
MOFU Bottlenecks: MQLs Aren’t Converting to SQLs
BOFU Bottlenecks – Deals Aren’t Closing
Not all leads are created equal, a good lead scoring model ensures only high-fit prospects move forward.
Engagement-Based Lead Scoring
The fastest-growing SaaS companies experiment relentlessly to optimize performance.
What to A/B test?
As you can see, a data-driven approach to funnel optimization ensures consistent revenue growth and higher efficiency.
Your funnel should be fueling predictable revenue, not causing friction.
At Kalungi, we help B2B SaaS companies grow by optimizing their funnel for efficiency and conversion. Whether you need better lead qualification, faster sales cycles, or clearer handoffs between marketing and sales, we’ll help you fix bottlenecks and accelerate revenue.
Let’s chat! Book a free discovery call today, and we’ll assess your current funnel, identify quick wins, and help you unlock sustainable revenue growth.
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