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The Boomer Bulletin - 2012
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Sales Success in 2012 - Focus on the Funnel!

Posted By Eric Hunt, Tuesday, January 10, 2012
A new year is here and with it comes new expectations and goals and now is the 
perfect time to evaluate the opportunities in the sales funnel.  A healthy funnel will have opportunities in various stages of the funnel.  Some opportunities will be brand new and in need of nourishment, while others just need to get a signature on a contract.  This is the lifeblood of your firm’s future revenues and requires ongoing attention.  

The sales funnel, also known as a sales pipeline, is the life cycle of a sale - no matter if it is a product or a service.  At Boomer Consulting, Inc., our sales funnel is broken into stages:  New Lead, Introduction, Follow-up, and Contract Out (closing).   Every firm defines their stages differently but they all follow a similar pattern.  It is important for the health of your firm that you have a strong grasp and focus on the funnel.  Use the following basics when evaluating your sales pipeline.  

Focus on all areas of the pipeline

Many people think that the most focus and energy should be put on the closing stages of the funnel.  This is where the money is, right?  If enough time and energy isn’t put into the early stages of the funnel, the closing stage won’t matter, as it probably won’t happen anyways.  On top of that, firms need opportunities to fill in when one is closed with a won or lost sale.  It doesn’t do any good if there are 50 opportunities in the closing stage, if there aren’t opportunities that will funnel down after a close.  This is why firms need to make sure that they have opportunities throughout the funnel.  I use a simple 80-20 rule.  For every 100 opportunities I have, I want around 80 of those to be in the first 3 stages of my funnel.  Most funnels with see the highest numbers in the first stage or two as opportunities are still new and being filtered out.    

Not all opportunities in the funnel are equal

One of the biggest mistakes firms make is trying to make every opportunity important.  This is just not the case.  Every firm should take a few minutes and define what is important in the opportunities they pursue.  Here are some questions to ask yourself when considering an opportunity:
  • How much work is required to complete the job?
  • How profitable will this opportunity be?
  • Have we worked with the client before?
  • Is this client likely to refer work to us?
  • What are the chances of closing this deal? 
After defining what is important to the firm, it is easier to review current and future opportunities to determine which ones to focus on.  It won’t take long to determine which opportunities can be eliminated by using this method.  This will save time and energy in the long run.  It will free up your team’s time to focus on the opportunities that meet your defined criteria.  

Keep your funnel clean and updated

Having a clean and updated pipeline will help ensure sales success.  Cluttered and disorganized pipelines make follow-up and prioritization difficult for the team.  When an opportunity is won or lost, remove it from the pipeline right away.  Many of today’s CRM systems have alarms or reminders that can alert you to opportunities that are not being attended to.  Some firms have a dedicated person that owns this job or has a built in process for the team to follow.  Make sure that keeping your pipeline clean is a high priority; otherwise it can get out of control quickly.  

Train and communicate funnel importance with your team

Most firms have multiple people selling in some form.  It is important for them to understand the funnel and what it means to the firm.  Even if they don’t ever add or change anything in it, update them on where deals stand that they are involved in and how the sales stages fit in with the overall revenue goal.  The more your team understands why and how the funnel is used, the more buy-in you will get when prioritizing resources.  

Conclusion

Sales funnels can be as simple as just listing the opportunities in an excel spreadsheet or they may be part of a complex CRM system, they are all valuable.  The important thing to remember is that your funnel will always be changing as you add and eliminate new opportunities.  Keep it clean and communicate changes regularly with your team.  A strong funnel can make the difference between meeting your revenue goal or trying to figure out what went wrong.  



Tags:  sales 

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