A funnel diagram is a visual showing a multi-stage process where the population shrinks at each step, drawn as stacked shapes narrowing from top to bottom. The wide top is everyone who enters (visitors, leads, applicants); the narrow bottom is those who complete (buyers, hires, activated users). The shape's job is making the drop-off between stages impossible to ignore.

The classic set is awareness (they learn you exist), interest (they engage), consideration (they compare you against alternatives), action or conversion (they buy), and retention (they stay). AIDA, the older four-stage version, runs awareness, interest, desire, action. Don't treat either as law; the right stages are the ones your team can define and measure, and three clear stages beat six fuzzy ones.

A funnel chart is data-driven: the width of each band is computed from real numbers, usually in a BI or spreadsheet tool, and it changes when the data does. A funnel diagram is conceptual: you draw the stages to communicate the process, and the widths are stylistic. This template is the diagram kind; write the actual counts in the details labels and the picture carries both.

Three to five. Below three, it's not really a funnel; past five, stages start overlapping and the definitions blur. This template ships with five because that fits the common cases: the marketing funnel's awareness-to-retention arc, a sales pipeline from lead to closed, a hiring funnel from applicant to offer. Merge stages you can't measure separately; a stage without its own number is decoration.

They're the same shape flipped, with opposite meanings. A funnel shows a process over time: one population entering at the top and shrinking as it moves down through stages. A pyramid shows a static structure: independent layers stacked by hierarchy or size, like organizational levels or Maslow's needs, with nothing flowing between them. If things move through it, it's a funnel; if things sit in it, it's a pyramid.