Sep
23
Sales Funnel: Part 2
Filed Under Year Of Original Content, fundamentals, learning, sales, systems
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Loading ...In Part 1 I introduced the concept of the sales funnel and gave an insight in to what it isn’t. Now we get in to the meat!
What it is
A sales funnel is sometimes referred to as a sales pipeline or also a sales tunnel.
A sales pipeline is a simple way of acknowledging that prospective customers go through different stages when they are buying something. For example, first they may simply be asking for information, researching options and so on. Your matching sales activity would be to provide them with the information they are asking for, ask more questions about what they are trying to achieve and so on.
For some prospects this will be the end of the road – they’ll either stop everything right there, at this first stage, or they’ll continue, but not with you.
Some will however want to go further. You may suggest a longer (or initial) meeting or telephone call to explore needs and constraints further. Some will drop out at this point, some won’t.
So over time the prospects and you will go through a sequence of activities that lead right up to a sale.
At each stage some prospects will drop out for what ever reason – price, change of mind, priorities, solution fit, didn’t like your hair colour (seriously!) – you name it almost any reason will apply!
This pipeline is often drawn as a funnel with the wide opening at the top. This is because at the wide, top end is where the majority of the prospects will be, in terms of numbers – the width of the funnel represents the number of prospects at that stage in the funnel.
As you go through your sales process you will see prospects drop out at each stage, so the numbers of prospects at each next stage is generally less than the stage before – hence this narrowing effect.
You only truly have a customer right at the bottom of the funnel, when a prospect not only decides to buy from you – but actually pays too!
And it’s possible that some, perhaps many, of your prospects don’t come in to the sales process right at the start, at the top of the funnel. They may come to you in the middle – they’ve done the research or are just fixated on buying what you have – it doesn’t matter because often you can’t know and few sales people find out fully, fearing that if they take the prospect back to the start of the process, the prospect might change their mind and go away – another lost sale in the minds of many a salesperson (even though that’s not true!)
The secret is in making sure that your funnel is populated – you have enough prospects at every level so that you have a good, steady-ish stream of paying customers (giving you cash!) coming out the bottom of it – always!
Why have one?
A sales funnel or pipeline – what ever you call it – has its uses. For example, you can use it to:
- Forecast future income
- Set priorities on where to focus next
- Help you identify opportunities to improve your sales process
There are other ways to do all of the above, but the funnel’s visual and actual simplicity make it the tool of choice for many sales professionals.
The more successful operations actually design their own funnel that reflects the characteristics of the markets they are in and the nature and structure of their own sales processes, though you can use an ‘off the shelf’ funnel structure to get you started. I’d actually recommend you build your own tailored funnel as quickly as possible though…
In part 3 we’ll look at how to access these 3 functions of a sales funnel.
- Sales Funnel: Part 1
- Sales Funnel: Part 2
- Sales Funnel: Part 3
- Sales Funnel: Part 4
- Sales Funnel: Part 5
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