Sales leakage is the term used to describe revenue that a company should have earned but didn’t due to some error or inefficiency. In retail, sales leakage can be caused by anything from employees giving away free merchandise to faulty inventory management. Reducing sales leakage is essential for any successful retail business – something I learned firsthand during my time working in retail management.

I remember one particular instance when our store was losing money due to sales leakage. We had just launched a new product and it was selling like hotcakes – except for one small problem: we were giving too much of it away for free! Our employees were supposed to be offering customers discounts on the new product, but instead, they were just giving it away entirely.

As you can imagine, this resulted in massive losses for the store and left me scrambling to try and figure out how to plug the leak. Ultimately, we were able to get things under control by instituting stricter controls on employee discounting privileges and increasing communication between managers and staff members about proper discount procedures. By taking these steps, we were able to reduce our sales leakage significantly and get back on track towards profitability.

What is Sales Leakage?

If you’re struggling to reach your sales goals or connect with high-potential leads, it might be because of drop-offs in your conversion funnel. By improving your digital marketing funnel, you can engage with leads more effectively and generate more sales.

Many marketers are still unaware of how they can better their lead generation, buyer qualification, and sales process.

Comprehensive funnel analysis is an essential tool for streamlining your sales funnel and improving your conversion rate. By identifying drop-offs at each stage of the funnel, you can pinpoint areas for improvement and optimize your user journey to increase sales.

Funnel analyses are most effective when they identify the best path that users should take through each of your stages.

The Sales Funnel and Why it Matters

Only 22% of businesses are satisfied with their conversion rates, while 78% are dissatisfied with their overall performance.

For the latter, a more streamlined and engaging sales funnel could improve overall revenue and user engagement.

A well-rounded sales pipeline can help your organization achieve a variety of different objectives, which will change as your potential buyer is guided through a multifaceted sales process.

A sales funnel is important because it helps businesses to direct potential leads through a process that will eventually result in a purchase. By attracting leads, engaging with them, educating them about what you have to offer, and then converting them into customers, businesses can increase their chances of making a sale.

As a company, it’s crucial to maintain a good relationship with your clients to maintain customer loyalty and encourage future sales.

A sales pipeline is a series of steps that moves a lead from first contact with your company to a sale.

Often, brands don’t plan for the little things that will lead to a successful sales conversation.

What is Funnel Analysis?

Your marketing is only as strong as your sales funnel.

A sales funnel helps you understand where and why your prospects are dropping off. By analyzing your funnels, you can make the changes necessary to increase your conversion rate.

A funnel report is a great visual tool to see how your prospective customers are moving through your sales pipeline. By showing your conversion rates and drop-offs, you can better understand your customer base and needs.

This information is vital to improving your sales funnel and overall conversions.

How to Identify Sales Leakage in Your Funnel

There are many ways to improve your sales pipeline. First, identify where in your funnel your prospect is dropping off.

By optimizing your sales funnel, you can increase your conversions.

There will be some customers who will not make it all the way through your sales funnel or who will leave the process before making a purchase.

While you may not be able to achieve 100% conversion, there are things you can do to maximize your conversion rates.

Investigating the “where” and the “why” of prospect drop-offs will help you understand how to cultivate more engaging calls to action during each phase of your sales funnel.

Google Analytics can help you identify where your prospects are dropping out of the sales process. By identifying these problem areas, you can make changes to your landing page or website to improve the conversion process.

Using Google Analytics, you can track your website visitors’ behavior, including where they drop off in your sales or marketing funnels.

To effectively do this, you should first set up a “goal” in GA.

A “goal” is your final desired action, such as signing up for your email newsletter.

Once that’s done, you can “funnel” your traffic through each stage of your sales process.

To do this, you simply add each URL that corresponds to each of your stages.

To see your funnel visualization in Analytics, you’ll need to wait several days for Google to gather data from your site.

After that, you can go to the “Conversion” tab, then “Goal” and finally “Funnel Visualization.”

How to Increase Engagement and Conversion Rates

With Google Analytics (GA) ready to track your funnel’s drop-off rates, now you can work on increasing your conversion rate.

There are many ways you can optimize your website to increase revenue, generate quality leads, and increase your loyal customer base.

1. Create A Landing Page.

A landing page has one purpose: to funnel your visitor through the final stages of your sales process.

If you’re looking to increase engagement and conversion rates on your website, a landing page is a great way to do it. By addressing a specific problem and explaining how your product or service can help, you can encourage visitors to take action.

A landing page is more effective when it is designed around one central idea. By keeping the focus of the page narrow, you can better engage with your prospects and lead them to take the actions you desire.

Linking to your website’s landing pages can help increase your conversion rate.

When landing pages are well-designed, they can dramatically increase your conversion rate.

2. Blog Regularly.

If you want more traffic to your website and to generate leads for your funnel, then writing an informative blog post is absolutely essential. Whether it’s an in-depth guide or a simple tutorial, your blog should be full of useful content that people actually want to read.

Blog articles help position your business as an industry leader, and when your prospects search for solutions, they find you.

3. Create a Persuasive Call to Action.

Your webpage, blog, or email newsletter should clearly state what action you want your readers to take. If you want them to subscribe to your mailing list, for example, include a button or link that lets them do so.

If you want to capture more contacts, include a call-to-action on your website that allows people to fill out a form or subscribe to your mailing list. This will allow you to generate leads and customers and boost your conversion rate.

Including your call to action in your web content is a great way to improve your conversion rate.

4. Stay Active on Social Media.

This may seem like a no-brainer, but using social media to market your business is a great way to drive traffic to your website and boost your conversion rate.

Using digital marketing campaigns, you can increase your website traffic and boost your sales. There are 2.56 billion people using mobile devices to access social media platforms. This represents a huge market of potential customers.

By implementing effective marketing strategies, you can tap into this vast market and grow your business.

As a company, you must link your social media accounts to new content, such as blog posts, landing pages, and website pages. By doing so, you’ll increase traffic to your pages and better understand what your customers are looking for.

If you want to improve your website’s performance, then you need to track your visitors. By understanding where they are dropping off on your site, you can make the necessary changes to keep them engaged.

5. Create Excitement.

Providing users with actionable information, such as how-to guides and free resources, is a great way to keep them engaged.

Providing value to your prospects at every stage of the funnel can increase engagement, conversions, and ROI.

Want to learn how to connect with your lead, find your best prospect, and generate more sales and engagement? Become a certified digital and social selling specialist!

4 Ways to Fix a Leaky Funnel

Now that you’ve identified where your leak is, you can work on plugging your leaky pipe.

Top of the Funnel: Attract the Right Buyers

If you’re finding yourself getting bored or disinterested early in the selling process, it may be worth taking a look at the types of people you’re bringing into your sales funnel.

Focusing your efforts on customers who don’t fit your buyer persona is a waste of time and money.

They will eventually want to purchase features that you don’t have and get lost somewhere in your sales funnel.

Your website design, email copy, CTAs, and landing pages are designed to attract your Ideal Buyer and move them through the sales funnel. By making it as easy as possible for your visitors to get in the funnel, you can increase your odds of making a sale.

The sales funnel should be simple and direct. The sales process should be aligned with your buyer’s journey, not look like a spider’s web, anthill, or cornfield.

Middle of the Funnel: Invest in a CRM

If you’re struggling to convert more leads to customers, a customer relationship management (CRM) tool can help you organize your data and keep track of each lead’s interactions with your business. With this information, you can better identify which of your marketing strategies are most effective, and which need improvement.

60% of your sales in your funnel will be from future conversations. If you’re not talking to your prospects, they may buy from someone else.

An all-in-one marketing platform and CRM system can automate your lead nurturing process.

Using a CRM system, you can make sure that your business stays top of mind with your prospects. By staying engaged, your prospect will think of you when they are ready to make a purchase.

Bottom of the Funnel: Use a Lead Scoring Process

When you give each lead a score and ranking in your CRM system, it’s much easier to know which ones to prioritize. Research shows that 35-50% of deals go to the first company that responds to a lead.

According to research by Forbes, Inc., and HBR, companies that respond promptly and relentlessly to inbound sales inquiries experience a 341% increase in revenue.

If you want to make sure you aren’t wasting your valuable time on bad leads that are never going to convert, and that important sales don’t fall through the cracks, you need to keep track of and rate your leads into categories.

Post-Funnel: Clean Up the Scraps

Not every presentation or proposal closes. Even with a 30% closing ratio, the majority of presentations or proposals do not lead to sales.

What happens to your leads after they’ve decided not to buy from you?

Let’s discuss software, or life, insurance.

If your prospect is under a competing contract with your rival, you should still keep in touch and be there when their agreement is up for renegotiation. By setting up automated communication based on when their deal is up for expiration, you can make sure you stay top-of-mind when it’s time to buy again.

When you’re trying to patch up your pipeline, it’s important to:

  • Find the holes: Take a close look at your sales process and identify where leads are falling through the cracks.
  • Stop the leaks: Once you know where the leaks are, take steps to plug them up. This might mean changing your processes or investing in new technology.
  • Keep an eye on things: Even after you’ve stopped the leaks, it’s important to keep an eye on your pipeline and make sure that new ones don’t spring up.

When you’re generating more and more leads for your business, it’s challenging to personally follow up on all of them. This can result in a leaky sales funnel.

To avoid that, be strategic about targeting the right buyers and invest in a good customer relationship management (CRM) system. This will enable you to automate your follow-up process, nurturing your prospects and notifying you when a lead is sales-ready.

What is Sales Funnel Leakage?

Sales funnel leakage is the loss of potential customers at any stage of the sales process. The most common causes of sales funnel leakage are a lack of interest from the customer, a poor sales pitch, and a lack of follow-up from the salesperson.

What is Leakage Buying?

Leakage buying is the purchase of a good or service by an individual or organization that is not authorized to do so. This can occur when an individual uses their personal funds to buy goods or services for their employer, or when an organization purchases goods or services without going through the proper channels. Leakage buying can lead to waste and corruption, as well as decreased productivity and efficiency.

What Does Leakage Mean in Retail?

Leakage in retail is defined as the difference between the total revenue that a retailer should have generated and the total revenue that they did generate. In other words, it is the amount of money that a retailer “leaks” out of their business due to various factors such as theft, employee discount abuse, return fraud, etc.

There are many ways to measure leakage, but one common method is to compare the total inventory value on a retailer’s books to the total sales value for some time. If there is a large discrepancy between these two numbers, it could be an indication of significant leakage.


If your retail business is losing money due to sales leakage, don’t despair – there are steps you can take to plug the leak and get back on track towards profitability. Strictly controlling employee discounting privileges and increasing communication between managers and staff members about proper procedures are both key in reducing sales leakage. By taking these measures, you can protect your bottom line and ensure that your business is successful for years to come.

Need Help Automating Your Sales Prospecting Process?

LeadFuze gives you all the data you need to find ideal leads, including full contact information.

Go through a variety of filters to zero in on the leads you want to reach. This is crazy specific, but you could find all the people that match the following: 

  • A company in the Financial Services or Banking industry
  • Who have more than 10 employees
  • That spend money on Adwords
  • Who use Hubspot
  • Who currently have job openings for marketing help
  • With the role of HR Manager
  • That has only been in this role for less than 1 year
Just to give you an idea. 😀[/sc

Editors Note:

Want to help contribute to future articles? Have data-backed and tactical advice to share? I’d love to hear from you!

We have over 60,000 monthly readers that would love to see it! Contact us and let's discuss your ideas!

Justin McGill
About Author: Justin McGill
This post was generated for LeadFuze and attributed to Justin McGill, the Founder of LeadFuze.