Get the Crud Out of Your Sales Funnel
Most salespeople understand the concept of the sales funnel. It works just like an ordinary funnel that you might use to transfer liquid from one container to another.
We all know that if you stop pouring the liquid into the top of the funnel, fluid stops coming out the bottom. We also know that if you try to pour too much in at one time, the funnel overflows and you lose some of it.
You’ll also lose liquid if the funnel leaks. If you have blockages in your funnel, the flow may stop or back up, causing an overflow situation.
So how does this work for sales? Simple. If you stop putting potential sales opportunities into the top of the funnel, closed sales stop coming out of the bottom.
If you try to put too many sales opportunities in at the same 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 your sales funnel 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 or quote out in a timely manner, the inability to deliver by a specific date, or indecision on the part of someone in your organization.
Clogging Up the Funnel
By far the most common blockage that clogs up the sales funnel is an overabundance of non-sales opportunities that are eating up the salesperson’s time. It’s this problem we want to explore in more detail and provide a quick-and-easy solution to removing or minimizing this blockage.
Why Blockages Occurs
A lot of salespeople feel they are doing their job if they keep their sales funnel full to capacity. Not true. Your job as a sales professional is to not just keep your sales funnel full, but to keep it full of “real” opportunities and not “wished/hoped-for” sales.
Overly optimistic salespeople will dump almost any potential opportunity into their sales funnel just as long as the prospect is breathing. Just because someone is breathing doesn’t mean they’re a live prospect; it just means they’re alive period! Unfortunately, your sales funnel can get clogged up with too many non, or poor, opportunities and you spend your time spinning your sales wheels instead of focussing on business that you can close in a timely manner.
One way to minimize the sludge is to make sure that it doesn’t get into the funnel in the first place. It’s important to properly qualify the opportunity during the Probe part of the sales process. Sharp salespeople not only take the time to properly qualify opportunities, but they take pains to disqualify those opportunities that can result in wasting their valuable selling time.
Separating the Wheat from the Chaff
Even the most efficient salespeople will find their sales funnel getting filled with sales sludge from time to time. You need to review what’s in the funnel and take the time to separate the good opportunities from the bad and clean it up so the funnel is flowing effectively again.
How often you decide to clean out your funnel will depend upon how many new or potential opportunities are added each month. As a minimum, you should probably be cleaning up your funnel once a quarter, or even monthly, if you’re doing the type of selling that generates a lot of potential opportunities.
Here is a relatively simple tool that will help you decide whether an opportunity is worth keeping in the funnel or not, and if it is worth keeping, what priority you should assign to it. This method allows you to quickly assign a percent chance of closing the sale to each of your opportunities.
Once you’ve assigned a percent chance of getting the sale to your opportunities, all you have to do is rank them in order to determine which opportunities you should be working on and which one you should let die a natural death.
All you need to do is look at each of your opportunities and check off the questions in four categories – price information, degree of urgency, funds approval, and competitive edge.
- 10% Prospect has written quote or price information.
- 5% Prospect has verbal quote or informal pricing information.
- 0% Not quoted as yet.
Degree of Urgency
- 30% High degree of urgency. Prospect must buy something now.
- 20% Medium degree of urgency. Prospect should buy now.
- 10% Some degree of urgency. Prospect may decide to buy now.
- 0% No/low degree of urgency. Prospect doesn’t need to buy now.
- 30% Opportunity funded to or above our price.
- 20% High probability of funds approval.
- 10% Good probability of obtaining funds.
- 0% Funds not yet available and/or approved.
- 20% Sole source, no other competitors being considered.
- 10% Good rapport, preferred or favoured vendor.
- 5% Competitors still being seriously considered. Who & why?
- 0% Sale possible only with difficulty. Why?
You’ll note that, at best, you can only have a 90 percent chance of getting the business. That’s because a sale isn’t 100 percent until the product/service has been delivered, installed, completed, paid for, etc, and you’ve done a follow up to ensure the customer is satisfied.
Make It Work for You
Of course, this system isn’t a “one-size-fits-all” solution to the problem of sludge removal, but it can be changed and modified to fit most sales situations. Take the time to make it fit yours and keep the sales flowing.
Both you and your sales manager will be delighted you did.