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
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
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
- Have we worked with the
- 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.
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.
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.