Actively Managing Your Sales Funnel
I’ve been getting a lot of questions lately about funnel management, so I thought this would be a good place to share some best practices. The word funnel is often used to describe our pipeline of deals as the typical funnel would show the ideal shape we need to deliver a healthy stream of revenue. That is, we need more opportunities and leads at the top because as they progress through the selling (and buying) stages, some are no doubt due to fall out.
If we know an opportunity is not a good fit, it’s better to remove it from our funnel in an early stage rather than do a lot of work on it only to lose it in the end. Sometimes salespeople are hesitant to do this because they feel “any lead is a good lead.” But if you succumb to this behavior too frequently your funnel will wind up clogged with opportunities that are going nowhere and you won’t have the needed time available to properly pursue the important ones. Put a good process in place for qualifying opportunities and make sure you can identify poor fit early in the sales cycle.
Many organizations have tools in place to manage the sales funnel, like CRM. However, all too often the data within only gets examined at the region or team level. If you’re a salesperson, you should regularly analyze your own personal funnel to examine the shape. Do you have enough opportunities to deliver your target revenue? Are opportunities stuck at a certain stage? What is your personal close rate? If you have an automated tool to look at this data, use it. If not, you can create a simple spreadsheet that will do the same thing. Once you have all of your opportunities loaded, sort it by funnel stage. Look for any trends. If you don’t have enough at the top of the funnel, increase your prospecting activities. If you have too many that aren’t closing – ask yourself why and put some focus on getting the majority across the finish line. If there are opportunities that you know are not going to close – do a gut check and get them out of your funnel.
The length of your typical sales cycle should help determine how frequently you conduct a funnel review. A good starting point would be at least once per week. If you work in a long sales cycle industry (more than 1 year) you can probably stretch this out to once a month. If you are operating on a short sales cycle (less than 90 days) you may want to review your funnel 2 or 3 times a week. Regular funnel reviews will help you stay focused and prioritize your selling time on your best opportunities.
