leolingham2000The Sales Funnel
Keeping control of your sales pipeline.
With the idea of the Sales Funnel, we use the metaphor of a funnel (wide at the top, narrow at the bottom) to monitor the sales process.
At the top of the funnel you have “unqualified prospects” – the very many people who you think might need your product or service, but to whom you’ve never spoken. At the bottom of the funnel, many sales and delivery steps later, you have people who have received delivery of your product or service and have paid for it.
The metaphor of the funnel is used because people drop away at each stage of a long sales process: For example, many of your unqualified prospects may have existing suppliers with whom they’re very satisfied. Others may have needs which other competitors are better-placed to satisfy. Still others may love your products, but not have the budget to buy them.
The image of the sales funnel (see ATTACHED CHART ) elegantly combines a visual representation of the step-by-step nature of a long sales process with this drop away in prospects at each stage.
SEE THE ATTACHED CHART
This is a sample of an indian paint co.
Why use the tool?
By using the sales funnel, and by quantifying the number of prospects at each stage of the process, you can ...
-manage the prospects
-manage your customers
-manage the sales pipeline more effectivelly
-control the sales pipeline
-improve the sales productivity
-improve the conversion rate
-increase the sales
Sales is like any other business activity - it needs planning. To achieve a
required output (annual target) you need an certain level and quality of input
(prospects). The numbers at the top of the funnel must take account of your
anticipated - or preferrably known - conversion rates through the funnel.
SALES MANAGING THE FUNNEL.
EVERY REPRESENTATIVE IS MANAGER OF HIS SALES FUNCTIONS.
Managing the sales FUNNEL process is typically the job of the Sales REPS. Good sales REPS. usually exhibit the characteristics of: organization, a good personal sales record, enthusiasm, ambition, product knowledge, trustworthiness, SELLING skills, and somebody who is respected by others.
The Sales Funnel
A sales funnel report presents a "snapshot" of your sales function at any given point in time. For conceptual purposes, the sales process is often compared to a funnel where new leads coming into the system (i.e. prospects) are initially placed into the top of the funnel (the widest part) and then worked through the system by informing, persuading, overcoming objections, providing information, demonstrating, providing free samples, etc., etc. until at the narrow part of the funnel, an order is placed and a sales is closed when payment from the customer is received.
The funnel framework works fairly well because for all new leads that are generated by marketing, there is a closing rate that represents the sales that ultimately result. The number of resulting sales is usually significantly less than the number of total leads generated hence it is useful to think that as leads work their way further down the funnel there will be less and less of them until they come out the narrow end of the funnel as sales.
One important thing to note is that organizations define each phase in the sales process (or, part of the funnel) differently. Each step working through the funnel should have clearly defined criteria that go along with it so at each part of the funnel, there is specific knowledge about all the leads at that stage. In other words, leads become more and more qualified as they work their way through the funnel and at each step, you will know exactly what that specific level of qualification is. Another important thing to keep in mind is that the funnel is a great way to track and forecast sales, as well as, gauge marketing activities.
By running a Sales Funnel Report, the sales manager can visually see how many leads are at each step, if there are any "bottlenecks", or if there are an insufficient number of leads at any stage. Armed with that knowledge, then the sales manager may instruct his or her sales force where they should focus more attention to keep sales at the desired level. He or she can then also work closely with the marketing manager to ensure they are generating enough leads to hit sales goals, whether the leads are of high enough quality, or what further needs to be done to hit sales goals.
In short, the funnel can clearly point out what adjustments need to be made within the sales function to hit sales goals. That might mean that marketing activities need to be adjusted, that addition sales training is needed, or that sales personnel need to focus their efforts and activities on certain parts of the sales pipeline to keep the entire process on balance and running smoothly. The sales funnel also helps sales and marketing work closely together to meet organizational sales objectives. It is a wonderful management too
MANAGING THE SALES PIPELINE --THE FUNNEL.
It is the FUNNEL selling process that allows marketers the greatest freedom to adjust a message to satisfy customers' information needs. FUNNEL selling allows the marketer or seller to communicate directly with the prospect or customer and listen to his or her concerns, answer specific questions, provide additional information, inform, persuade, and possibly even recommend other products or services.
The FUNNEL selling process consists of the following steps:
1. TOTAL PROSPECTS
2.TOTAL COMPANY CURRENT CUSTOMERS
11.WRITTEN ORDERS RECEIVED
1. TOTAL PROSPECTS
2.TOTAL COMPANY CURRENT CUSTOMERS
Prospecting refers to identifying and developing a list of potential clients. Sales people can seek the names of prospects from a variety of sources including trade shows, commercially-available databases or mail lists, company sales records and in-house databases, public records, referrals, directories, and a wide variety of other sources. Prospecting activities should be clearly structured so that they identify only potential clients who fit the profile and are able, willing, and authorized to buy the product or service. Once prospecting is underway, it then is up to the sales professional to qualify those prospects to further identify likely customers and screen out poor leads.
Before engaging in the actual personal selling process, sales professionals first analyze all the information they have available to them about a prospect to understand as much about the prospect as possible. During the Pre-approach phase of the personal selling process, sales professionals try to understand the prospect's current needs, current use of brands and feelings about all available brands, as well as identify key decision makers, review account histories (if any), assess product needs, plan/create a sales presentation to address the identified and likely concerns of the prospect, and set call objectives. The sales professional also develops a preliminary overall strategy for the sales process during this phase, keeping in mind that the strategy may have to be refined as he or she learns more about the prospect.
The approach is the actual contact the sales professional has with the prospect. This is the point of the selling process where the sales professional meets and greets the prospect, provides an introduction, establishes rapport that sets the foundation of the relationship, and asks open-ended questions to learn more about the prospect and his or her needs.
During the presentation portion of the selling process, the sales professional tells that product "story" in a way that speaks directly to the identified needs and wants of the prospect. A highly customized presentation is the key component of this step. At this point in the process, prospects are often allowed to hold and/or inspect the product and the sales professional may also actually demonstrate the product. Audio visual presentations may be incorporated such as slide presentations or product videos and this is usually when sales brochures or booklets are presented to the prospect. Sales professionals should strive to let the prospect do most of the talking during the presentation and address the needs of the prospect as fully as possible by showing that he or she truly understands and cares about the needs of the prospect.
Professional sales people seek out prospects' objections in order to try to address and overcome them. When prospects offer objections, it often signals that they need and want to hear more in order to make a fully-informed decision. If objections are not uncovered and identified, then sales professionals cannot effectively manage them. Uncovering objections, asking clarifying questions, and overcoming objections is a critical part of training for professional sellers and is a skill area that must be continually developed because there will always be objections. Trust me when I tell you that as soon as a sales professional finds a way to successfully handle "all" his or her prospects' objections, some prospect will find a new, unanticipated objection-- if for no other reason than to test the mettle of the sales person.
Although technically "closing" a sale happens when products or services are delivered to the customer's satisfaction and payment is received, for the purposes of our discussion I will define closing as asking for the order and adequately addressing any final objections or obstacles. There are many closing techniques as well as many ways to ask trial closing questions. A trail question might take the form of, "Now that I've addressed your concerns, what other questions do you have that might impact your decision to purchase?" Closing does not always mean that the sales professional literally asks for the order, it could be asking the prospect how many they would like, what color they would prefer, when they would like to take delivery, etc. Too many sales professions are either weak or too aggressive when it comes to closing. If you are closing a sale, be sure to ask for the order. If the prospect gives an answer other than "yes", it may be a good opportunity to identify new objections and continue selling.
11.WRITTEN ORDERS RECEIVED
14. FOLLOW UP ACTION PLAN.
Follow-up is an often overlooked but important part of the selling process. After an order is received, it is in the best interest of everyone involved for the sales person to follow-up with the prospect to make sure the product was received in the proper condition, at the right time, installed properly, proper training delivered, and that the entire process was acceptable to the customer. This is a critical step in creating customer satisfaction and building long-term relationships with customers. If the customer experienced any problems whatsoever, the sales professional can intervene and become a customer advocate to ensure 100% satisfaction. Diligent follow-up can also lead to uncovering new needs, additional purchases, and also referrals and testimonials which can be used as sales tools.
From India , Mumbai
VahidLeolingham2000, thanks for your lenghty post. I will take a look at your spreadsheet, since i've been looking for a tool that could help me put my "ducks in line" so to say, and i've had a hard time doing it so far in my year or so in a sales position.
From Bolivia , Santa Cruz
vishal_09HI Leo, The information provided by you is really fruitfull for achieving the sales target.. The attachment is also clear and gives the areas to focus on. Thanks for the information. Rgds Vishal
From India ,
CHINNU1970Funnel Management for beginners it is a useful link to start your thinking process. However advanced Funnel management techniques are there which will evolve you to be a perfect Sales Man and in one excel sheet you will find how many contacts would be needed to hit your target.
From Singapore , Singapore
CHINNU1970Funnel Management <link updated to site home> . I will recommend this link after reading this you will able to get an idea and you can design your own Excel sheet followed by Access which you are familiar with to do wonders in Forecasting and effective planning for closing the sale. You will be most wanted in the Sales Man jobs after this.
I always found our Major sales man will work on A prospect more and even companies i had found they are more keen on A prospect but according to me a company or Sales man working on C prospect will succeed and he is a true sales man and he will be loved by many.
From Singapore , Singapore
When I read your article, it seemed to be very useful. But the attachment does contain only the strategy report. Can you please send me the actual funnel xls that you created to my id
From India , Kochi