Using your funnel
Once your funnel's working - 'n' leads delivered into the fat end, converted at a rate 'x' into qualified prospects and driven through the stages into revenue - it's time to manage it. There are four thing to look at.
Model accuracy. When your model goes up against reality, the real world wins. Check your assumptions and adjust them continually. Are prospects really being converted at a rate of 25%? Is the average value-per-client too optimistic? Are the probabilities you're applying a bit cheerful, assuming every other proposal will result in contract negotiations rather than one in four? Always use reality to drive your model, not the other way around.
Funnel bottlenecks. Any sales funnel will have chokepoints and pinched processes that could be optimised. Sales people will always want more leads - but what if there's only 5000 people in your universe and you're hitting them all quarterly? That means you need to increase conversion rate, not lead generation. Or - at negotiation stage - maybe you need to charge 20% more; it might reduce the number of negotiations but double your total profit. Or maybe you're just not writing the right proposals. In these gaps lie losses; look for them and kill them off.
Correct metrics. Organisations adapt to what they're measured by. If the measures create inequality, or don't match the goals of the business, the organisation won't perform. (Or worse, people will 'game' the system, meeting the metric without providing the value.) The rule: whatever you measure, keep it simple, bind results to efforts - so nobody's relying on someone else doing their job properly to get rewarded - and make sure the metric matches the result you want. Doing this properly is a real art.
Resource allocation. This is where 'true' marketing comes into play: the arrangement of resources to maximise delivery to the customer at lowest cost/highest margin. You may be putting all your resources into lead generation, because you're measured on leads generated - but what if the people doing it would be better used further down the funnel, in analysing the customer's needs and developing the right value propositions? Many sales plans don't take account of the two most important factors for any organisation: the limited resources you've got and the finite size of the market. Don't be fooled.
And that's how a sales funnel works. You can look back over the funnel stages, or head for home.
Stages of the funnel
1. Approaching your prospects
2. Qualifying your prospects
3. Analysing their needs
4. Developing a value proposition
5. Making the proposal
6. Negotiating the contract
GET ME IN YOUR INBOX: blank email to
What I do for clients: sales[at]redpump.com
Rate card: rates[at]redpump.com
Book links: book[at]redpump.com
Contact info: contact[at]redpump.com
Once your funnel's working - 'n' leads delivered into the fat end, converted at a rate 'x' into qualified prospects and driven through the stages into revenue - it's time to manage it. There are four thing to look at.
Model accuracy. When your model goes up against reality, the real world wins. Check your assumptions and adjust them continually. Are prospects really being converted at a rate of 25%? Is the average value-per-client too optimistic? Are the probabilities you're applying a bit cheerful, assuming every other proposal will result in contract negotiations rather than one in four? Always use reality to drive your model, not the other way around.
Funnel bottlenecks. Any sales funnel will have chokepoints and pinched processes that could be optimised. Sales people will always want more leads - but what if there's only 5000 people in your universe and you're hitting them all quarterly? That means you need to increase conversion rate, not lead generation. Or - at negotiation stage - maybe you need to charge 20% more; it might reduce the number of negotiations but double your total profit. Or maybe you're just not writing the right proposals. In these gaps lie losses; look for them and kill them off.
Correct metrics. Organisations adapt to what they're measured by. If the measures create inequality, or don't match the goals of the business, the organisation won't perform. (Or worse, people will 'game' the system, meeting the metric without providing the value.) The rule: whatever you measure, keep it simple, bind results to efforts - so nobody's relying on someone else doing their job properly to get rewarded - and make sure the metric matches the result you want. Doing this properly is a real art.
Resource allocation. This is where 'true' marketing comes into play: the arrangement of resources to maximise delivery to the customer at lowest cost/highest margin. You may be putting all your resources into lead generation, because you're measured on leads generated - but what if the people doing it would be better used further down the funnel, in analysing the customer's needs and developing the right value propositions? Many sales plans don't take account of the two most important factors for any organisation: the limited resources you've got and the finite size of the market. Don't be fooled.
And that's how a sales funnel works. You can look back over the funnel stages, or head for home.
Stages of the funnel
1. Approaching your prospects
2. Qualifying your prospects
3. Analysing their needs
4. Developing a value proposition
5. Making the proposal
6. Negotiating the contract
GET ME IN YOUR INBOX: blank email to
What I do for clients: sales[at]redpump.com
Rate card: rates[at]redpump.com
Book links: book[at]redpump.com
Contact info: contact[at]redpump.com