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The sales funnel is a description of the sales process from initial customer contact to sale. Each level of the sales funnel has actions that can be taken by sales and marketing to strengthen the relationship between the company and the potential customer, helping the prospect narrow down their options and keep the company at top of mind.
The sales funnel is important because it guides the sales and marketing efforts of a company. It helps the company understand what the prospective customer is thinking at each stage in order to work most effectively, and helps the customer combat the competition as the customer narrows his or her options.
Unfortunately, many companies do not use the sales funnel effectively. This may be because they do not fully understand how the sales funnel should be used, or their sales pipeline is not effective, which leads to inaccurate projections.
A sales funnel can be altered to be more effective for the company. So what makes a successful sales funnel?
Each sales funnel is different based on the products and services, and the needs of the company. Clearly defining each stage of the sales funnel that works best for your company will help you understand how to use it to your best advantage.
Sales metrics and reports tell you how well your sales efforts are doing, and where your business is in regards to goals. By creating metrics and reports weekly, sales teams can have the latest information about important factors such as the pipeline totals in comparison to goals, new opportunities for sales, and what sales have closed in the last week. This enables the sales team to target prospective customers more effectively.
Just as metrics should be used weekly, the sales funnel and data should be evaluated regularly to make sure it provides accurate and relevant information for the sales team. This includes information about the prospective customers and where the customer is in the sales funnel (and the next step needed). Additionally, customers who are no longer viable prospects should be removed from the data so sales teams can focus on new and viable opportunities.
Just as sales teams have minimum quotas that must be met weekly, monthly, quarterly, and annually, the information in your sales funnel should include your win ratio to ensure that there are enough prospects in the sales funnel to meet the minimum quotas for the sales team and for the company.
Once the sales funnel is established, it may be helpful to add a second sales funnel that focuses on the final stages of the pipeline, from the creation of the proposal to the final sale. Generally, executives and other administration are involved in these stages, and this allows the executives to have their own sales funnel—that is still part of the overall sales funnel—to use.
No company wants to know there has been a missed opportunity. By running reports of opportunities with close dates in the past, you can evaluate the effectiveness of the sales team, and ensure that a great opportunity was not missed for any reason. This helps the sales team stay on top of deadlines for closing.
The sales funnel is an excellent opportunity to strengthen business, and using a CRM and its reports will help your business create and manage your sales funnel, and use it to help increase sales to ensure your company continues to be successful.
Gary Galvin is a consultant, sales leader and CEO of Galvin Technologies, which is a Salesforce Consulting Partner known for creating solutions that increase revenue and improve business processes. Galvin Technologies focuses on using technology to provide a personal and consistent experience that turn prospects into life-long clients. Gary leads the direction of the company while focusing on new customer acquisition. You can follow Gary at @gary_galvin
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