Imagine a real world funnel. At the top some substance is poured in, which filters down toward one finite destination.
In sales, something similar occurs.
In marketing automation, the sales funnel is a multi-step, multi-modality process that moves prospective browers into buyers. We say multi-step because lots must occur between the time that a prospect is aware enough to enter the funnel, to the time when they take action and successfully complete the purchase.