Friday, May 20, 2011

Feed The Funnel So It Feeds You!

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This is the infamous Sales Funnel. It is quite possibly the only sales territory planning tool you will ever need. If its processes are implemented properly, it will tell you exactly what you have to do to achieve your target sales revenue every month, quarter and year. All you have to know is what your goals are and what the average value-per-sale is and you can work backward from there to determine how many suspects are needed in the funnel. As an example; if your revenue production goal is $10,000 and the average sale is worth $2,500, you will have to close four sales to reach your goal. If you have a 14% close percentage, you will have to put 28 to 32 potential customers into the funnel to be successful. If you can keep 28 to 32 suspects in the funnel at all times, you should see the desired sales results.

By determining the number of suspects you need to have in the funnel, you can direct your prospecting efforts in a much more focused manner. Through your qualifying activity you will quickly determine the real opportunities to assign to your forecast and then you can concentrate on closing those deals. If at any time during the process you find that you have underestimated the number of suspects necessary to hit your goals, you may wish to increase you prospecting activity. To mitigate the risk in stop-and-start prospecting it would be wise to prospect on a regular basis. The sales funnel tool is invaluable for just this kind of planning.

Once you have implemented funnel management and fine tuned it to fit your industry/sector you can help your marketing team better understand the attributes of your target prospects. That will enable them to better focus their efforts in acquiring superior leads for you. And in the end, you will be concentrating on the deals that have a better chance of closing. Everyone wins!

The sales funnel is a valuable tool for any salesperson, but it must be fine tuned to fit your experience with how your suspects and prospects are qualified to make it onto your forecast. It is my experience that 75% or more suspects and prospects fall out after being firmly qualified. How do you firmly qualify suspects and prospects? Well, that's another lesson. Click the Follow button on this page to be alerted to the next lesson.

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