Building a Sales Funnel

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To be successful in sales, it is very important to have a clear understanding of where you stand in negotiation process with each potential client you’re approaching. Sales Funnel – is one of the techniques that helps sales managers to visualize current progress stages. This is very important for planning as it gives an idea which opportunities are the closest ones, and which require more attention. In other words – Sales Funnel is a monitor of the sales process and it helps to plan and track telemarketing and cold calling activities.

There are different ways to build the Sales Funnel. As an example, let’s have a look at one in which clients are classified according to the below categories depending on their overal interest in a company’s product of service:

1) Not Contacted (companies that are potential customers but haven’t been approached yet)

2) Contacted (companies that have been contacted, but haven’t confirmed their interest yet)

3) Interested (companies that are in fact interested in a product, but don’t have a desire to buy yet)

4) Willing to buy (companies that want to buy and have a high probability to place a Purchase Order in nearest future)

5) Clients (companies that have already placed a Purchase Order or signed a contract)

Also, as we are talking about B2B sales, let’s also divide the Sales Funnel into two parts: End Users and Distributors. This is important as in most industries the sales strategies would be slightly different for such two groups. Also, sales managers are often recommended how much time to spend on approaching one group and the other, and which sales questions to ask.

Now, since we’ve agreed on the general structure of the Sales Funnel, let’s build it. To make it easy accessible from anywhere where there is internet, and in order not to care about saving it, I recommend to use online spread-sheets (like the ones offered by Google Docs or Zoho Docs). It is also important if you’re not the only one who’ll be working with the funnel. For example, in case if you’re building it for the whole sales department of 3 managers – all of them can be granted access to the spreadsheet and they will be able to update it live. This makes it interactive and fun.

Here are some more reasons to use online tools:

1) It is possible to link it to the online CRM and have instant access to every company in your funnel

2) It is always with you as long as you stay online

3) You don’t waste stickers and thus preserve the the environment

Of course some sales mangers might prefer to use a real dash-board and have stickers on it representing companies. That is also a good idea, because it makes you feel your opportunities when you touch them and move stickers around. A similar approach is nicely described in a book “Selling Against the Goal” By Kendra Lee, where she also pays attention about how to generate leads, fill the funnel and move the opportunities down turning them into Purchase Orders. In her book, the Sales Funnel is filled with Leads (or sales opportnities). For me, I found it more convenient to visualize not the Leads, but the companies in my Funnel. The idea is – once the company becomes a client, a long term contact is signed, so there is no need to move them through the funnel again and again, as the contract specifies the shipping schedule. However, to make the sales process even more visual – you can have two funnels: one for companies, and another one for Leads or opportunities.

Putting all together, let’s try to build the Sales Funnel:

A Sales Funnel Built in a Spreadsheet Processor

Each Cell would contain the name of the company and the country of its location, hyperlinked to the company’s account in CRM. You can add more detailed information about each company, prehistory of communication or anything else by adding a comment to each cell. Having such a visual supplement makes it easy to plan strategy of sales activity. The main task is to keep companies moving from upper levels to the bottom orange section (which represents clients who’ve signed a contract and are actually buying). Also, it is important to keep the upper levels filled with new potential clients.

The proposed funnel is just a handy visualization tool. It can and it should be modified according to your particular business model, environment and sales strategy. There are many other approaches: databases, tables, folders, yet most of them are not as visual as the sales funnel.


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