How To Use a Sales Funnel to Manage the Sales Process
The Sales Funnel is a metaphor for the process through which virtually all high-end business sales go through in the course of making a sale. New sales opportunities pour into the top of the funnel. These leads need to be educated (possibly), qualified, bid upon, be taken through negotiations, etc. Of the many potential new customers with which you have contact, that go into the top of the “funnel”, a smaller number actually make it all the way through the process and purchase your product or service. Hence the metaphor.
I’ve often heard, and believe it to be true, that the key to success in sales is to always keep one’s sales funnel full. In other words, at any given time, there should be sales that you are working at each phase within the sales process.
For the purpose of demonstration
The sales funnel concept is very straight forward and there are many software packages out on the market that have this type of functionality built in. Its also possible (although not much fun) to track and manage your customers using an Excel spreadsheet, or even a pencil and paper. That being said, there is a simple contact management program, with sales funnel management, that I give away on this site — feel free to download a copy for yourself. To use this database program, you need to have Access 2003, 2007 or 2010 on your computer. Here’s are two (clickable) screen shots of the program itself, along with a screen shot of the Current Pipeline report.
Defining the Sales Process
As mentioned above, customers go through various steps or phases as they move through the sales process. These “phases” vary somewhat in name from business to business. Determining what the process is that you go through, as well as naming the various stages, is an important part of developing a sales management strategy that will work for you. The initial names of these phases within the aforementioned database, (which you can easily change,) are as follows:
- Initial Opportunity
- Initial Communication
- Fact Finding
- Propose Solution
- Negotiation
- Contract Signed
- Customer Declined
- We Declined
Putting the Sales Funnel to Work
The first step in using this database (or any such system) is to enter the Contact Information into the database itself. You can also add notes, enter and manage tasks, etc. (As this program was created in Access, additional fields can be easily added to the form.)
There’s a drop-down box (middle left-hand side) for Lead Status. Keeping track of this one, simple piece of information — Lead Status — is the key to managing your funnel.
When you pull the Current Pipeline report (see screen shot, above), you’ll get a detailed view of where all your customers are within the sales process.
Incredible Insight
In a nutshell, really, this is pretty much all there is. The Sales Funnel is a simple tool that you can use to keep track of where all your customers are at within the sales process. The insight, focus and the awareness of where everything is at within your business, will give you an amazing advantage in the work that you do. Most reasonably complete sales software packages.
All The Best,
Mike