What it's really for
The funnel doesn't exist to decorate a slide deck. It's there to answer three questions objectively: how much is in the pipeline, how much of it should close and at which stage the operation loses the most.
Without stages that have clear criteria for moving forward, the funnel becomes a pretty drawing and the forecast becomes a guess.
A stage isn't a feeling
The most common mistake is defining stages by perception — “hot,” “warm,” “in negotiation.” Perception can't be audited and varies from rep to rep, which makes any comparison impossible.
A useful stage is defined by a verifiable fact: there was a discovery meeting, the proposal was sent, the decision-maker joined the conversation.
Sales funnel and marketing funnel
They're two slices of the same journey. The marketing funnel deals with interest before an opportunity exists; the sales funnel begins when someone takes ownership of the deal.
The connection point between the two is where B2B operations lose the most revenue — usually because each side uses a different definition of what a qualified lead is.