A sales funnel is a pipeline of potential deals or sales prospects and it tracks the progression from initial contact to close. There is a goal of qualifying prospects as they mature in the funnel. A single funnel will track different types of customers and many products and services. The best method to establish and manage a sales funnel is to define funnel milestones backward, from close back to initial contact. The funnel should capture significant milestones of understanding and aligning to customer needs and requirements. The key is to understand the deal progression so everyone involved can understand your position on a deal and opportunities in general. Often management will use the funnel to determine at what point to discontinue the chase on a deal. Most deals have a greater expense or investment as they go deeper in the funnel. The costs increase at the bottom of the funnel when the final solution bid is prepared and presented.