Funnel Waterfall Audit

What the Funnel Waterfall Audit Does

The funnel waterfall audit shows funnel performance as a sequence of stages and highlights the conversion gap at each stage.

Instead of guessing where to fix, you get answers to practical leadership questions:

• Are we losing revenue at the top, middle, or bottom of the funnel?

• Is this an offer issue, a trust issue, or a sales execution issue?

• If we hit benchmark rates, what is the revenue upside?

• Which improvement would create the biggest impact first?

This is not a dashboard. It’s an audit tool designed to create clarity and prioritisation.

Who This Tool Is For

The funnel waterfall audit is built for:

• founders and CEOs who want predictable revenue

• CMOs who want to improve conversion before buying more traffic

• sales leaders who want clearer pipeline quality

• operators who need to remove constraints across teams

This tool is especially useful if:

• lead volume increased but revenue didn’t

• sales says leads are weak

• marketing says sales follow-up is slow

• pipeline feels inconsistent month to month

• you’re scaling spend and CAC is rising

How the Funnel Waterfall Audit Works

The tool asks for your monthly funnel actuals:

• traffic (visitors)

• leads (opt-ins)

• calls booked

• deals closed

• average deal value

It calculates your actual conversion rates between stages:

• traffic to lead

• lead to call

• call to deal

Then it compares those rates against benchmark targets and estimates the revenue gap at each stage.

The key output is:

• the constraint stage

• the “left on table” revenue estimate

• a simple diagnostic of what kind of fix you likely need

The point is speed. Leaders need the signal before they build a solution.

What Each Stage Means (And What Usually Breaks)

A funnel is not a diagram. It is a system with constraints.

Stage 1: Traffic (Visitors)

Traffic is the volume entering the system.

Common issues at this stage:

• traffic is low quality

• channels are misaligned with the offer

• messaging attracts the wrong buyer intent

If traffic is mismatched, you can’t “sales” your way out of it.

Stage 2: Leads (Opt-ins)

Leads represent conversion from attention to interest.

Common causes of leaks:

• unclear offer

• weak positioning

• too much friction

• low trust proof

If leads are low relative to traffic, the constraint is often offer clarity.

Stage 3: Calls (Booked)

Calls represent intent and trust.

Common causes of leaks:

• weak nurture sequence

• slow speed-to-lead

• unclear qualification

• wrong CTA for the stage

If leads are coming in but calls are not, the constraint is usually trust and follow-up systems.

Stage 4: Deals Closed (Revenue)

Deals represent conversion from intent to commitment.

Common causes of leaks:

• poor discovery structure

• weak differentiation and proof

• pricing misalignment

• inconsistent sales process

If calls exist but deals are low, the constraint is often sales execution or offer-market fit at the deal level.

How to Use the Funnel Waterfall Audit (Step-by-Step)

Step 1: Enter your monthly actuals
Use a 30–90 day average, not your best month.

Step 2: Confirm the shape of the waterfall
Look for the stage where drop-off is most pronounced.

Step 3: Check the constraint headline
The audit labels the most likely constraint:

• top of funnel (offer)

• middle of funnel (trust)

• bottom of funnel (sales)

Step 4: Look at the “left on table” revenue
This helps leadership prioritise based on impact, not opinion.

Step 5: Pick one stage to fix first
Fix the biggest constraint before adding volume.

How to Interpret the Results (Constraint Logic)

A strong funnel waterfall audit doesn’t just report conversion rates. It helps you interpret what the system is telling you.

Use this simple interpretation:

If the leak is at traffic to lead

This often indicates:

• positioning is unclear

• offer is not specific

• landing page structure is weak

• traffic source is misaligned

Primary fix type:
Offer and messaging architecture.

If the leak is at lead to call

This often indicates:

• trust is not built

• follow-up is slow or inconsistent

• nurture is missing

• qualification is unclear

Primary fix type:
Nurture and speed-to-lead systems.

If the leak is at call to deal

This often indicates:

• sales process inconsistency

• weak discovery and objection handling

• pricing misalignment

• poor differentiation and proof

Primary fix type:
Sales execution and deal conversion systems.

A useful rule:
Don’t buy more traffic until you know which stage is the constraint.

Common Mistakes When Auditing Funnels

Mistake 1: Comparing funnels without context

Benchmarks are directional. Your business model and deal cycle matter.

Use the output as a prioritisation signal, not a judgment.

Mistake 2: Fixing the wrong stage

Teams often default to top-of-funnel improvements because they are visible.

Constraints are often in nurture or sales execution.

Mistake 3: Using bad baseline data

If your inputs are inconsistent, your conclusions will be too.

Use a monthly average.

Mistake 4: Treating “leads” as a success metric

Leads are not success.
Revenue is success.

If lead volume rises but deals don’t, the system is leaking.

Mistake 5: Doing five fixes at once

If you change everything, you can’t learn what worked.

Pick one stage and fix it in a 2–4 week cycle.

Example Scenarios

Scenario 1: Lead volume up, deals flat (B2B)

Inputs show:

• traffic stable

• leads up

• calls down

• deals down

Audit interpretation:
Middle of funnel leak.

Likely cause:
Nurture and speed-to-lead.

Fix:

• standardise follow-up SLA

• build a simple nurture sequence

• tighten qualification

• strengthen proof assets

Scenario 2: Calls are high, close rate low (B2B)

Inputs show:

• calls booked are healthy

• deals closed are low

Audit interpretation:
Bottom of funnel leak.

Likely cause:
Sales structure.

Fix:

• standardise discovery steps

• define qualification criteria

• improve objection handling

• align offer to buyer outcomes

If This Sounds Like You (Diagnostic Checklist)

The funnel waterfall audit is a good fit if:

• pipeline is unpredictable

• marketing and sales disagree about “lead quality”

• conversion rates swing month to month

• you suspect a nurture gap

• you are spending more but not closing more

• your sales team is busy but revenue is flat

• you don’t know which funnel stage is the constraint

How I Think About This (From Real Work)

Most funnel problems are not “marketing problems” or “sales problems.”

They are system problems.

What I typically see:

• teams chase volume before fixing leaks

• conversion is measured, but not interpreted

• nurture is missing or inconsistent

• sales process varies by rep

• leaders lack one shared funnel model

What I prioritize:

• quantify the leakage stage-by-stage

• identify the constraint

• fix one stage at a time

• build measurement that supports decisions

• install weekly review cadence so improvements hold

What good looks like:

• stable conversion and predictable pipeline

• fewer debates between marketing and sales

• clear ownership per stage

• the business grows without constant spend increases