Sales Strategies Part 2: The Sales Funnel

In the second part of the sales strategy series, we’re covering the actual sales process.

I want you to take a moment to consider… What does the word “sales” conjure in your mind?

Does it create images of the pushy car sales person type trying to convince you to buy a car?

If so, the belief systems about selling need to be re-aligned. If you believe selling is about being pushy, dishonest, or overbearing, and the experience is an overall unpleasant situation, it’s likely that this is true in your business. Beliefs are projected on the prospects you meet with. Positive beliefs bring about positive results. Negative beliefs bring about the opposite – resentment, fear, avoidance, etc.

Let’s get something straight. Selling is not an activity confined to the time when we are trying to sell a product from our business. Realize that selling occurs everyday, in almost every situation that can be thought of. We sell concepts and ideas to our business partners and life partners, friends and associates. A night out could be a matter of convincing the other party to go to a certain restaurant, bar, or nightclub. A decision to choose which movie to watch could be a struggle between a few friends who have different ideas. The final decision lies in a person’s ability to convince the others that his/hers is the best option.

Besides being an everyday activity, it is also an opportunity to satisfy the desires of prospects. Prospects are looking for a solution to their wants. If the solution is presented well, the prospect agrees to the purchase – thus, the deal consummates into a sale.

Let’s now look at the sales process…

Some consider the sales process as a pipeline where prospects enter and clients are output. I prefer to visualize the sales process as a funnel. The funnel’s top being very wide and the bottom being narrow. The top of the funnel is where your prospects enter (thus the larger end of the funnel) and the bottom is where the consummation takes place (thus the smaller end). It is a systematic process of bring a prospect closer to your intended sale. It can also be used as a systematic process to upsell your existing client higher value products and services.

Every business’ sales funnel will look different. It will also look different depending on where your leads come from. In general though, a sales funnel can be composed of several steps such as:

    1. Lead generation through online and/or offline marketing. – Top of Funnel
    2. General follow-up contact through phone or mail to qualify prospects and establish level of interest. Promotional materials (eg. sales brochures, email newsletter, ebook download, white papers, reports, etc) can also be sent out in this step. Prospects can also be signed up for a mass teleseminar or webinar to get educated on products or services through informative previews of what they can expect with purchase.
    3. Contact qualified leads. These can be people who have filled out a questionnaire on your website or answered a telephone survey.
    4. Identify prospect’s needs.
    5. Crafting the solution(s) – one or more solutions possible depending on finalized budget.
    6. Presenting the solution
    7. Prospect evaluates solution offered.
    8. Negotiation.
    9. Sign contract
    10. Sales closure. Client pays for the product or service – Bottom of Funnel

To determine what your business’ sales funnel should look like, brainstorm the various processes that take place. Use flowcharting methods to place steps in their respective places. Consciously take a prospect through those steps and identify any other steps you should have.

A good sales funnel should help increase sales and profitability, speed up sales cycles, and ultimately form a system that every person in the sales team must follow.

An important characteristic of sales funnel generally overlooked in developing one right for the business involves the analysis of each step of the funnel. If one just looks at the input and output, one will be tempted to increase the number of leads. For many businesses, generating more leads gets increasingly expensive. Rather than trying to optimize a blackbox where you are concerned about increasing sales without knowledge of *exactly* where things have gone wrong, you isolate each step of the process and measure conversions from step one to two, two to three, three to four, etc. If it is difficult to determine actual cause of failure in a step, that step may actually be made up of more than one step. Break down this step further into two or more and study the results.

Knowing the actual numbers helps businesses identify where processes are breaking down, what needs to be improved, what requires changing, etc. Thus, with little or no increase of leads generated, a business can improve output dramatically.

The numbers you obtain in each step of this process serves as a “baseline” of process improvement. By observing it regularly, a business also can monitor when processes stop working after a while (perhaps because team members aren’t following instructions) or to maintain current levels. Without actual quantifiable numbers, no business can ever hope to improve anything.

Getting the “numbers” forms the foundation of business growth and development. There are other numbers to consider as well and a business owner would do well by analyzing and improving upon these numbers. These numbers are commonly referred to as Key Performance Indicators or Critical Success Factors. We’ll explore these in a later article.

[dels]sales management strategies, sales process chart, sales funnel[/dels]