Sep
26
Sales Funnel: Part 5
Filed Under Year Of Original Content, fundamentals, learning, sales, systems
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Loading ...In this post I look at the third of 3 stated functions of a sales funnel.
Help you identify opportunities to improve your sales process
There are 2 main areas where you will always want to improve your sales process:
- Effectiveness
- Efficiency
Your sales process is more effective when the probability of sales success is increased – you convert a greater number of sales opportunities or prospects in to customers that actually pay. To put it another way, instead of converting 1 prospect in 20, or 5%, you may convert 1 prospect in 19, or 5.3%. It’s not much, but it is an improvement – you’d actually be getting, on average, 6% greater revenue than before!
Your sales process is more efficient when you get a greater return or revenue/cash for the same effort & use of resources. For example you get a higher selling price even though you are putting in the same effort as before and the cost of your sales operation per individual sale stays the same.
A more efficient sales operation leads directly to higher profit for each individual sale. If you are also closing more sales for the effort involved, then you are getting more and more of these higher profit sales – that’s a double bonus!!
Having accurate funnel data, even if at times it makes uncomfortable reading, will quickly point you at opportunities for improving either or both the efficiency and the effectiveness. You’ll be able to look at which stage in your funnel is not as good as it could or should be, and in what way. This will guide you quickly and directly towards the kind of actions to take to improve things, instead of guessing your way to a better set-up, or using trial and error approaches, both of which will take more time and money to maybe get you to a better place…
The exact approaches and techniques to use in improving these have had whole books written about them – big books, some with hard maths in them, so I’ll save these details for another article. Just know at this stage that you can get a 25-40% improvement just by using the simpler of these techniques, with no difficult maths involved.
Let me give just one example. Say you want to increase the amount of profit you make in a given time. You know that it’s unlikely in the time available that you can suddenly bring in new prospects and get them all the way through your sales process and to giving you cash. You look at your funnel and determine that improving the ratio of conversions that each stage achieves means you will have more prospects getting through each stage of your funnel, and this will work right away, with what’s already in your funnel – great! Some quick research suggests adopting different wording in your sales letters may help. You commission a professional copy writer to create what you need. It costs you the profit from 2 sales, but that’s OK – soon your conversion ratios are better, and the increased sales not only cover the fees of the copywriter but give you greater close rates – for ever!
- Sales Funnel: Part 1
- Sales Funnel: Part 2
- Sales Funnel: Part 3
- Sales Funnel: Part 4
- Sales Funnel: Part 5
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