The sales funnel. The opportunity funnel.
The sales funnel visually describes the sales process from initial contact to final sale. The stages of a sales process refer to a potential customer’s degree of readiness to commit to a deal. You can manage the sales funnel by developing sales metrics appropriate for your business. As you gain experience in working with customers and sales processes, you can create your own version of the sales funnel, complete with specific steps and actions to move your prospects from stage to stage. Over time you will find that some sales metrics prove more critical for your business than others.
Read on and I’ll reveal 6 reasons why it’s uberly-wise to analyse and proactively measure your sales process.
A quick snapshot of why pipeline measurement is so important:
- You can identify where your sales funnel leaks
- You can identify which prospects can be ‘recycled’
- You can create more accurate sales forecasts
- You can find out early whether there’s a risk you’ll miss your sales targets
- You can assess how individual team members/departments are performing
- If you can measure it, you can manage it
As you may well know, your sales funnel is an important tool in your pocket which visualises how your customers move through your sales process. So, effective sales funnel management is important for your company. Let’s go into a little more detail and discuss how you can measure your sales funnel.
To accurately measure the true shape of your sales funnel, you need to know a number of things. Some are obvious – the volume and value of opportunities at each stage and the conversion rates from stage to the next; others however are less obvious, sales velocity for example. Sales velocity refers to the time taken for opportunities to flow from one stage to the next.
What’s next? You then need to identify your Key Performance Indicators (KPI’s); some traditional KPI’s to measure could include,
- Inbound traffic by source
- Web form conversions and inbound calls by source
- Prospects who want to talk
- Prospects who have a project need and budget
- Close deals
Thus tracking the entire funnel. This can be done using a combined integration of web analytics, marketing automation software, CRM software and experienced data analysts. Reporting which is built-in to your company is no longer just a competitive advantage, but is paramount to sustaining and growing your company in today’s market.