An organism can only survive if it is fed regularly, and a business is no different. It requires a steady input of cash to maintain its viability. It is the role of the business developer to navigate the Sales Ecosystem (see our previous post here) and use it to keep a steady stream of opportunities, leads, quotes and sales flowing into the company. The traditional way to visualise this is the concept of a Sales Funnel.
A lot has been written about the sales funnel and it has been presented in many different ways. Fundamentally, the funnel comprises the stages of effort required to get a sale. Imagine this as a water funnel, your marketing leads (digital advertising, face-to-face meetings and social media activity) are poured into the top. Some of these leads are genuinely interested in your company offering and become opportunities for a sale. A few of these opportunities will develop into sales bringing much needed revenue through the door. A simple Sales Funnel model is presented in the figure below.
It is easy to see that if the leads at the top of the funnel reduce a little, the knock-on effect to the sales and revenue generation can be catastrophic. Keeping the funnel filled should be of prime importance to the business developer and to the business.
Basic Sales Funnel
A basic Sales Funnel process comprises the following stages:
Leads. Leads take a couple of forms. Firstly, these are people and or businesses who have shown enough of an interest in your offering to reach out to you. Secondly, they are projects or tenders that strongly align with your company offering. A full funnel of leads is generally gained from customer relationships, marketing efforts and an understanding of what is happening within your market.
Lead assessment/qualification. To thoroughly pursue each lead can be a large waste of time and resources. Each lead must be quickly assessed and qualified as worthy (key) for further pursuit. Don’t waste time on leads that will not go anywhere.
Opportunity pursuit. The qualified lead is now considered an opportunity and time is taken to understand the customer involved, their drivers and what problem they are looking to solve. Any gaps in understanding need to be identified. A simple pursuit comprises:
Phone call. Best practice is to call the key customer or stakeholder to learn more about the opportunity, establish or reinforce a trust-based relationship and fill any gaps in the opportunity. The power of a phone call to the right person is significant and can really make the difference between winning and losing the opportunity.
Proposal. Present your company offering to the customer. Your proposal should spell out the value of your offering and needs to comprise more than just a price.
Follow up. Once the proposal has been received, give the customer some time to absorb the contents and follow up. Ask them if they need any clarifications, or have any feedback? This can provide a chance to adjust the proposal to bring it in line with the customer’s expectations. It also gives you an opportunity to gain insight into how the offering is perceived, allowing changes to be made to future proposals.
Sale. Close the deal and secure the revenue. Now your team must deliver.
I can’t stress strongly enough the importance of keeping the funnel full. A good rule of thumb is that opportunities should value 3 times your monthly sales target. However, this may change depending on industry and organisation.
We will expand on the Sales Funnel in later posts, particularly around specific systematic processes for each stage, but it is important to understand that this is the general process that must be followed to keep your business nourished.
Call to Action
My call to action for you is to think about your own sales funnel. How do you monitor the different stages, is it healthy and are you constantly filling the top with opportunities?
Let me know your thoughts around how you use a sales funnel in the comments below.
Next week we’ll look at attributes of a strong business developer.