When was the last time a well qualified opportunity stopped returning your emails? If this happens more than you’d care to admit, as it commonly does, it may be worth taking some time to look at how you define funnel stages for your sales cycle. These should match your typical customer’s buying process to ensure you’re correctly qualifying and following up effectively – and at the right time. What steps do your prospects take on the road to becoming customers? How do you engage them along this road?
You don’t need to spend too long on this but a little bit of forethought will make measuring and improving your sales process easier in the long run.
Step One: Your clients buying process
Put yourself in your customers’ shoes. You need to know each of the buying stages your customer are likely to go through, as each of these may need to be represented as a stage in your funnel. Typical B2B stages are:
- Problem Awareness – How can we get this nail into this piece of wood?
- Solution Discovery – I could use a hammer.
- Alternatives Evaluated – What sort of hammers are available for our need?
- Budget Assigned – How much can we afford to spend on a Hammer?
- Demonstrations Requested – Of hammers we can afford, lets see which performs best.
- Vendor Selected – We want that hammer.
These will obviously vary and may include more or less stages, usually depending on the size of the organisation you typically sell to. However you need to be aware of the ones that do exist, so that you can recognise if you’ve made the cut and progressed to the next stage.
For example: A software vendor may need to pass an IT audit, and every estate agent knows the importance of their buyer getting mortgage sign off.
Your business and industry will have it’s own dynamic. As an aside, we note that from the above the earliest you could hope to be talking to your customer is stage 3. And in today’s selling environment, customers are typically not making direct contact with suppliers until later in the cycle.
Step Two: Your products sales cycle
Know your sales cycle by analysing your previous sales. The stages of your sales cycle may include;
- Prospect – This company is considering buy some hammers.
- Qualification – They have assigned a budget towards obtaining a hammer.
- Demonstration – They would like to see how our hammer performs.
- Selected – Bob really likes the hammers I showed him.
- Negotiations – They want our hammer for cheaper
- Closed Lost – They don’t want to buy our hammer.
- Closed Won – We have reached a sales agreement.
Step Three: Open it up for discussion
Talk to your salespeople and your marketers. Come to an agreement to define when a lead should transition from marketing to sales. Equally importantly, agree and define when a stalled sales cycle goes back into marketing. Far too many sales people cling on to sales cycles out of a sense of insecurity that they will ever get it back. It is better to focus on the deals you have a real chance of closing and allow marketing to keep in contact with cold leads with follow-up information.
Step Four: Align Stages
Refine and align stages from step ones and two. Ensure that key stages in both the customers buying cycle and your selling cycle are represented.
Step Five: Define entry and exit criteria for each phase
For example, the deal is not qualified until you’ve had written confirmation (e.g. email) from a client that they have budget allocated. Of course customers are not always 100% accurate, but it’s worth buttoning this down as far as you can. Each stage should have objective criteria – if it’s impossible to set, then I would question the validity of the stage. What a sales person’s gut tells them doesn’t count.
The number and naming of funnel stages should be an open conversation and carefully considered. Too many stages and the salespeople may feel too restricted about being measure on every course of action, or may find that each of the micro-stages are not represented of progression if you get the order wrong.
Too few stages and it becomes similarly hard to measure success and determine the next best course of action.
The best stages for a funnel are:
- Objective – Know the qualities that make up the category.
- Descriptive – Able to be view ‘At a Glance’ to give an overall funnel picture.
- Consistent – Appear in regular progression in most sell / buy cycles.
- Paced – Ideally the funnel stages evenly cover the sales cycle.
The value of a well constructed funnel is in immediate and consistent communications across all customer facing staff – Sales, Support, Finance, Marketing and Management. A visual representation of this data provides a greater tool for communication and review among team members.
For a small company or a single salesperson a spreadsheet may suitably manage a basic funnel. However this can get messy when you include contacts and activities surrounding your deals. You can easily define your funnel within SalesSeek and our multi-dimensional visualisations help your see the forest for the trees when it comes to your key deals.
Image CC-BY-SA-2.0 by Je.T.