When are salespeople at their best? When are they best able to close deals, maximize gross profit on sales, and grow their territory’s revenue? When answering these questions, think of how much better your salespeople perform when they have too much to handle. Think of how well they respond when there are far too many opportunities to work on. No, this isn’t meant as a joke and it isn’t meant to imply that sales people should be inundated with less than ideal opportunities. What it does mean is that when salespeople have multiple opportunities, they are best able to pick those deals that make the most sense to the company. The tool that makes this possible is the time-tested sales funnel. So, what is a sales funnel and why is it so important to keep those opportunities flowing? We’ll review the simplicity of the sales funnel, explain what makes it work versus what doesn’t, and then end with an actual sales funnel with itemized steps that your salespeople can use to improve their conversion rates.
Understanding the Sales Funnel
Simply put, the sales funnel is a systematic way of tracking how qualified leads turn into paying customers. You’ll often hear companies referring to keeping their sales “pipeline” full. This basically means that their marketing department is tasked with feeding as many qualified leads as possible to the company’s sales department. In turn, it’s the sales team’s responsibility to move those qualified leads through their sales funnel. In essence, that sales funnel provides what one might consider a roadmap to sales success. It itemizes the steps that these aforementioned qualified leads must pass through before being closed. It provides a system by which the salesperson can track their success at moving qualified prospects to their eventual positions as paying customers.
A Simple Sales Funnel Works Best
Sales funnels work best when they provide an overall guideline for your company’s sales team. However, they become difficult to manage when your sales funnels have too many layers, repetitive steps, and redundant processes. In fact, the problems are only exacerbated when that sales funnel is linked to the company’s CRM (customer relationship management) software. In the worst of cases, companies try to use their CRM to track how their salespeople move prospects and opportunities from one step to another within the funnel. This only works if those steps are simple, straightforward, and easy to manage. However, if there are too many layers to the sales funnel, then it does nothing more than add unnecessary time. Bottom line, your salespeople need to maximize their customer face time. Having them try to navigate a cumbersome sales funnel won’t allow them to do that.
The Sales Funnel:
In the spirit of keeping our sales funnel simple, ours will only have four layers. Again, the sales funnel’s success is predicated on marketing providing as many qualified prospects as possible. As such, the first step in our sales funnel includes the initial discussion with the qualified prospect. The second includes defining your value proposition. The third includes providing a proposal based on that value proposition, while the fourth and final stage includes closing the sale. The sales funnel with each of these aforementioned four steps is provided below.
Step 1: Initial Discussion
This is where your salespeople start to manage the future customer’s expectations. Items to be discussed include what the potential customer wants in terms of a product or service, and what fit the company has in terms of its current service capabilities. Managing expectations is essential in this first step because it defines the relationship going forward. Here are some topics to discuss.
- What is the customer’s expectation in terms of service?
- Are your company’s service capabilities a match?
- What is the volume and urgency of the requirement?
- What must your company do to secure the business?
Step 2: Value Proposition
The second step includes defining the company’s value proposition. Now, in a sense, this can be done in conjunction with the first step. In essence, your salespeople should clearly define your company’s value to the potential customer. The difference is that after that initial call, your salespeople should have a defined set of criteria by which a proposal could be made. Again, here are some items to consider.
- Have you defined your product and service offering?
- Does the customer have a clear understanding of your company’s value proposition?
- Does the customer equate your value proposition with their available budget
Step 3: Proposal
The third step is pretty much self-explanatory. Your salespeople must ensure that the proposal meets the potential customer’s expectations, and that it clearly defines your value proposition. If your salesperson has done a good job of the first two steps, then the third should merely be a summary of those prior discussions. Make sure the proposal summarizes the requirements in the initial discussion.
- Have you clearly met the customer’s expectations in terms of pricing, volumes and delivery requirements? If so, when will an order be placed?
Step 4: Sale
This fourth and final step is obviously the most difficult. Closing the sale may take multiple attempts, and there’s never any guarantee that the customer will purchase. If they don’t purchase, then go back and review the first three steps. What was missed and why? Did the customer not buy into the company’s value proposition? Or, was it simply a case of not managing the customer’s expectations? If a sale is made, then move that customer towards becoming a repeat customer. If the sale was lost, then understand why and develop a new strategy.
- Define how your company will retain the customer, or reassess what went wrong and why.
Your company’s sales funnel must be simple and straightforward. It’s best to concentrate on clearly defining each individual step, rather than having too many steps that aren’t clearly defined. Simplify your sales funnel. Make it easy to navigate and keep it full of opportunities. Do these things and your salespeople will be better able to manage their opportunities. More importantly, they’ll become more effective at closing business.
AbleBridge has helped hundreds of organizations simplify their sales operations by marrying process with technology.