I’m sure most of you understand what a sales funnel is, however do understand what an effective sales funnel looks like? Or do you know where the sales funnel begins?
Getting the starting point of the Sales Process is absolutely key and it may not be where you think it is! Despite what many people believe, the sales funnel starts with your marketing team! If this is not how you see things at the moment, please read on as I urge you to rethink that.
I’ve seen many cases in business where Sales Teams are complaining that Marketing Teams lead generation system is not delivering enough of or high quality leads. And in the same places, the Marketing Team complaining that the Sales Team are not acting on many of the leads they do pass on. Why? They are seen as separate entities, different departments with different KPIs and different goals. While I am not saying you should rush into creating one big team that does both, they should however have the same common goal and become a lot more integrated. They do, at the end of the day, have the same objective, support selling through the sales funnel.
What you see below is a high level example of a funnel. It have been broken down to 4 main areas and you can clearly see that the 1st step is Lead Generation and whose responsibility is that? Yes that’s right, Marketing!
Demand Creation & Lead Generation
Should it not be important for Sales & Marketing to work very closely to ensure that Sales are telling marketing what type of leads they want and for marketing to get feedback on how those leads are working out?
If this aspect alone is not working out, your sales funnel is going to snowball out of control. Getting the beginning of the funnel controlled will control many aspects of the funnel by preventing problems before they begin. And what kind of problems would these be?
- Creating leads for the sake of it – quantity over quality
- Discovery too late in the process that you are spending too much time on low value leads
- Creating proposals on the wrong projects thus missing out on the correct type
- Taking on the wrong projects that are low value and have no future prospects to develop, stopping you from working on high value projects
This is where the true cost of sales becomes scary. Lets look at a process that is delivering a 30% conversion rate.
That is 70%, a combination of the following
- Lead generation
- Proposal development
- Developing orders
- Designing solutions
Has not resulted in Orders and therefore wasted activities!
And the 30% Sales you did get, was that 30% been valuable Work?
- Did it make you money, as in the money that was projected?
- Did clients change deliverables mid project?
- Did you miss anything in the proposals?
- Were the clients hard to reach and to get the information you required from them?
- Did suppliers let you down?
And this could go on
So now of that 30% how much was valuable work? And some questions need to be answered!
What is the TRUE VALUE OF YOUR SALES PROCESS?
& What is the TRUE COST OF YOUR SALES PROCSESS?
This all begins at the lead generation stage.. so THIS HAS TO BE CORRECT and must also be the starting point of your Sales Funnel!
As Sales are developing and nurturing the leads that are passed on from marketing, there needs to be an in built feedback mechanism so that marketing can continually improve on their understanding of what sales wants from them in terms of type and quality of leads. This will continually hone in on their message and marketing routes that they have been developing and improving themselves.
Now that Marketing have handed you (the sales team) a list of leads, it’s your role at this stage of the process to begin qualifying them into prospects worth nurturing. That is prospects you believe to have high potential value for them and for you as a business. However, what does high value look like?
High Value could be a combination of
- Good fit for customer’s needs and high possibility of making a buying decision
- Perceived profitable work
- Has high future potential to develop into more valuable work
- Strong performing sector
- Strong performing company
And this is not a hard or long exercise to do. A very simple template/decision matrix can be designed to incorporate all the variables that need to be considered for your sector, some of which your marketing department should have. Getting the right information from the prospect here is also important and again this can be easily captured through the use of an effective inquiry sheet that supports the information you require in your decision matrix.
One of the main points here is continue sieving the leads into what you believe should be your high priority focused prospects that you are going to nurture and develop. With that you are naturally not wasting time on the low value prospects. This tool is huge in preventing the snowball effect I mentioned earlier.
Something that many companies don’t even touch, however is very important is the customer buying process. When you are ‘selling’ you are focusing on your needs not your customers. To have a successful sales process, you absolutely need to understand how your customer’s buying process works or what motivates them to make a buying decision.
- Have you thought them how to Buy?
- Have you added Value at every Touch Point – even at this stage before the Sale?
- Do you truly understand their exact Pains?
- Can you solve their Pains?
- Do they know more than you?
- What are the right touch points?
- When is it appropriate to engage with them to have value adding conversations
- About what value you can bring your customer not how good your product is
- Have you developed appropriate content for touch points
- How can you become part of the decision making process as early as possible
This is a very overlooked and underrated aspect of the sales process. Isn’t it supposed to be all about them and not you? This is a huge part of the nurturing process so you are not wasting their time and more importantly yours. Another issue here is when sales teams focus only on ‘Buy now’ sales. This is not their fault, their commission systems are typically set up for short term results, and the implication of this, the ‘Buy later’ prospects may get lost along the way. These still need to be nurtured and developed as at some stage they will be ready to buy!
The key points here
- Understand the customer decision making process
- Nurture ‘Buy now’ & ‘Buy later’ prospects
And finally, like in the previous main step, there has to be a feedback mechanism that again goes all the way back to your marketing department. They key is to continuously become more targeted and effective.
These are the fundamental aspects to this part of the process, however there may be more sector/project/business specific steps you will need for your business and you will only discover this by getting the process started!
I hope you are starting to see the importance of how closely sales and marketing need to be working together to ensure every step of the process is targeted and focused.
With proposal development, it’s impossible to give a one size fit’s all approach. No one proposal is the same as the other and different sectors look for many different types of information. Having said that there are a number of things that can be done that, like in previous steps that can make the process very effective, in time and quality.
I’m sure if you reviewed all the proposals you have submitted to potential clients there have been a number of things you have learnt.
- What worked well?
- What didn’t?
- What information were they looking for?
- Were there patterns to certain types of proposals?
- Are you always developing them from scratch?
And so on…
I have worked with a number of customers where we have developed standard templates for the ‘Runner’ proposal types that is the type that you do most often. How much time do you think you can save yourself by having standard templates on the ready so you are not starting from scratch? These also should be continually improved as something comes to life, they should be live documents. Having these are also very powerful when time is of the essence and show that you can turnaround top quality documents in a short space of time. What message does that send to your prospect?
Another point to note here, it’s very important that your contact you are working with is very much involved in the proposal development process, why? When you submit it, it’s exactly what they are looking for, thus supporting the customer buying decision in the previous step.
And as you guessed, this part of the process would not be complete without a feedback mechanism.
Questions that have to be answered
If you won the contract
- What was good about your proposal?
- Could it have been better in any section?
If you lost the contract
- What was missing?
- What did competitors show better?
- Did you miss something in the brief/didn’t fully understand the customer’s needs?
And with that, what can you take away so that your next proposal is instantly better and that your new template is improved and up to date.
Now that you have received your order, do you think the selling process stops? Not only does it not, there is still along way to go. You have to execute the project and absolutely must conduct a post project review. So the actions to note here are
- Have you delivered a successful project?
- Have you conducted a post project review, so
- Whatever didn’t go well you have learned from
- What extra activities were executed that you didn’t foresee at the proposal stage?
- Did projected profits meet actual, what was the gap?
Again this is all feedback so you can
- Deliver better and more effective proposals (for you and your customer)
- Deliver better and more effective projects that promotes future developments
All these activities will prevent wasted work from happening which will have a number of benefits.
- Cost of generating irrelevant leads
- Cost of filtering irrelevant leads
- Cost & time of proposing for non-value adding work
- Focus only on projects/sales that add value
- Increased capacity to conduct more value adding sales activities
- In wasting of resources
And your Funnel shape will be proactive as opposed to bloated!
The diagram above represents very well the difference in effectiveness of each funnel. Which one would you rather have? And again, remember, your funnel starts with marketing and lead generation.
So what actions are you going to take to streamline your sales funnel today?