The lead funnel and conversion cascade

A leadgen funnel is a sequence of stages, each with its own conversion rate, and the whole business lives or dies on how those rates multiply together. The stages have standard names, and the first job of any leadgen programme is agreeing what they actually mean, because most of the dysfunction in the channel comes from teams using the same words for different things.

The usual cascade:

• Lead - someone gave you their details. Bottom bar.
• MQL (marketing-qualified lead) - a lead that fits the target profile and showed enough intent for marketing to pass it on.
• SAL (sales-accepted lead) - the formal “yes, I’ll work this” from a rep, used to close the gap where sales ignores what marketing sends.
• SQL (sales-qualified lead) - a lead sales has worked and confirmed is worth pursuing.
• Opportunity - a real, qualified deal in the pipeline.
• Closed-won - revenue.

Why the cascade is the foundational maths

Each stage converts at less than 100%, and the rates multiply. If leads convert to MQLs at 40%, MQLs to opportunities at 25%, and opportunities close at 20%, then 1,000 leads becomes 400, then 100, then 20 customers. Two per cent of the leads became revenue.

That multiplication is why cost per lead is a misleading number on its own. A £20 lead in that funnel is a £1,000 customer before you’ve spent a penny on sales time - cost per lead divided by the end-to-end conversion rate. The real acquisition cost is many multiples of CPL, and a programme that only watches CPL is blind to the number that decides whether it’s profitable.

The cascade also localises the leak. A programme with healthy lead volume and terrible revenue has a stage where the rate collapses, and the cascade tells you which one. A cliff between MQL and SQL is a quality or definition problem. A cliff between SQL and opportunity is usually a speed or sales-process problem. You can’t fix a leak you can’t see, and an undefined funnel hides all of them.

Where it goes wrong

• Undefined stages. When MQL means “filled a form” to marketing and “ready to buy” to sales, every conversation about lead quality is two people talking past each other. The definitions have to be agreed and written down, or the cascade measures nothing.
• Watching the top, ignoring the bottom. Lead volume and CPL are visible on day one; close rates take months. Teams optimise what they can see and let the expensive late-stage conversions go unmanaged.
• Treating the rates as fixed. A change that lifts lead volume usually lowers the downstream rates, because the extra leads are lower intent. The cascade has to be read end to end, or a top-of-funnel “win” quietly degrades everything below it.