Sales organisations' profitability is lower in most
organisations than it should be because they do not control their sales
funnel.
The concept of a sales funnel is simple and well known. Most people think of it in terms of a sales process of:
- Suspects
- Prospects
- People we negotiate with
- Contracted clients
- Regular buyers.
Hugh
McFarlane's "The Leaky Funnel" probably has the most sophisticated
representation. Hugh sees the funnel as mirroring the customer's buying
process. The most generic form of it being organisations in the phase
of:
- Acknowledging they have the problem I can solve
- Seeking options to solve their problem
- Actively defining their needs to solve their problem
- Seeking proposals
- Selecting preferred products and services
- Negotiating contracts
Similar
depictions of the sales funnel exist in the literature and on the web,
albeit without the insight into the customer's mind of Hugh's model.
The
problem is that most organisations treat the sales funnel as an
abstract concept only worthy of trotting out at a sales conference.
Likewise, using it in an analytical report instead of an active means
of controlling their sales outcomes is a waste of effort.
The benefits of building a reporting model which tracks your sales funnel are numerous.
Focus on the customer buying process:
Even
if your sales people complain that their customer's buying process does
not match the generic buying process of the model, you have won an
enormous advantage. Your sales people are by now talking about buying
processes instead of sales process, product features and generic
benefits.
The change in customer perception of your sales people's concern for their business will be manifest.
Marketing involvement:
If
we use Hugh's model or one like it; who is responsible for making
customers aware that they have a problem we can solve? Marketing is the
majority answer. By documenting and measuring your sales funnel,
marketing's responsibility is at once defined and enumerated.
Focus on the tactics to get customers to move through their buying process:
By
concentrating on a sales process or an undocumented, unstructured view
of your sales funnel, you have no focus on the sales tactics you use.
You will, of course, have heroes and villains of sales. But you will
have no clear idea of what tactic has been successful. For example,
understanding which tactic actually moves prospects from defining their
needs to seeking a proposal from you. Hence you will find it difficult
to replicate successful tactics amongst the rest of your sales team.
If
you did, however, construct a documented and enumerated sales funnel,
you can focus on improving tactics. For example, tactics to improve the
lag in movement through the buying process. The results will be
visible, for good or bad, and the tactics adjusted.
Resource allocation:
Having
a sales funnel which you actively record and use improves your ability
to allocate resources. Not just resources in terms of manpower but also
in terms of budget dollars. If you know the rate of progression and
leakage through a funnel constructed around an industry's buying
process, you can decide what funds you can afford to allocate to each
step.
You can also decide what resources you might allocate on
projects to improve your sales tactics. You can also better allocate
resources between sales and marketing. Your allocation of dollars to
marketing will also become much more targeted. No more free pens and
caps will be offered by marketing when what your sales team would
dearly love are some qualified prospects.
Creating a documented
and enumerated sales funnel is not difficult. Creating an accurate one
is. Creating one that is useable that will begin to bring the benefits
mentioned above, takes a few days of thought and data acquisition from
your sales people and databases. Improving the accuracy and usefulness
of the funnel will be a lifelong passion when you see the benefits
start to flow through.
tweet this!