A sales funnel is the process prospects go through to become a customer. Each stage of the funnel takes the buyer one step closer to making a purchase. A well-planned sales funnel will define the actions your business needs to take to push prospects to the next stage.
The process is described as a funnel because it starts by attracting many people, before narrowing them down until you are left only with those who buy your product.
This drop off is inevitable — you will never be able to convert everyone. However, effective funnels will turn the highest number of people possible into buyers. Businesses should continually optimize and experiment with their funnel to make it more effective.