Thursday, August 05, 2010

The Sales Funnel

This morning, I'm going back to basics:

Daily Sales Tip: The Sales Funnel

The sales funnel is just like a funnel you might use to pour liquid from one container into another.

If you stop pouring the liquid into the top part of the funnel, fluid stops coming out the bottom. If you try to pour too much liquid in at one time, the funnel overflows and you lose some of it. You'll also lose liquid if the funnel has leaks. If you have some blockages in your funnel, the flow may stop or back up causing an overflow situation again.

So how does this work for sales? Simple. If you stop putting potential sales opportunities into the top part of the funnel, closed sales stop coming out the bottom.

If you try to put too many sales opportunities in at one time, the sales funnel overflows and you lose some potential sales. This can happen after a trade show where you simply have too many leads to follow-up in a timely manner.

You'll also lose sales if the sales funnel has leaks. Leaks are simply lost sales that probably weren't going to happen in the first place.

A blockage in your sales funnel could be something as simple as the inability to get a proposal out in a timely manner, the inability to deliver on a specific date, or indecision on the part of someone in the company.

It would be nice if every sales opportunity you put into the top of the sales funnel poured out the bottom as a closed sale. The percentage of sales opportunities that actually end up closed is called your "closing ratio." A 25 percent closing ratio means that you get (close) one out of every four sales you start.

Just like your regular funnel can't go out and find liquids to pour into its top end, the sales funnel can't actively find potential opportunities. That's your job. It's called prospecting. And part of your job, particularly in slower times, is to keep a flow of potential opportunities flowing down through your prospecting pipeline and into the sales funnel.

Developing your prospecting pipelines is important to your long-term survival in sales. If you just wait around for the company to supply you leads, chances are you'll slowly starve to death, in a metaphorical sense. Surprised? You shouldn't be. Experience shows that the best salespeople are also the best prospectors.

Source: Sales trainer/consultant Brian Jeffrey

Sphere: Related Content

No comments: