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Sales Funnel

By March 15, 2019 May 17th, 2019 No Comments

A sales funnel is the process a salesperson works to in order to convert prospects into qualified leads or sales. A typical sales funnel will have stages that each sales lead goes through. These funnel stages are based on the steps in the company’s sales process that the salesperson leads the customer through.

 

Why use a Sales Funnel?

By implementing and aligning sales activities to a sales funnel, sales management and trainers can identify which stages are posing challenges in the sales process. To also understand where individual salespeople are struggling to progress leads, for use in sales forecasting and measure conversions rates more accurately. The sales funnel should be used as a training and sales tool to give the sales team insights into their prospects or customer’s buying journey, challenges, and decisions.

Research into the sales process shows that upwards of 80% of prospect’s make it to the end of the sales funnel without making a decision, other research shows that over 70% of leads entered into the funnel are never converted into paying customers and (CSO Insights) tell us that in most sales organizations only 50% of their sales professionals achieve sales quota.

The reasons to use a sales funnel now become compelling as without it a business will struggle to track and convert the leads into sales efficiently or to grow sales revenue over time.

the-Sales-Funnel

What is a sales funnel?

A sales funnel is a visual mapping of the buyer’s journey split into stages and steps, from the existing customers or prospect’s first contact with the business until they complete a purchase or exit the funnel. The sales funnel is then mapped to the sales process so the correct sales activity happens at each stage.

To help visualize it, a typical sales funnel is the widest at the top and then narrowest at the bottom. The leads are qualified using set criteria during each stage of the funnel in order for them to be moved into the next stage and also eliminates those that are do not pass the criteria to continue investing time in. The sales funnel is directly connected to the buyer’s journey phases, which for ease of understanding can be sorted into three parts: the top, middle, and bottom.

This sales funnel structure can map to the status of each prospect, for example

Top of the funnel. Suspect (not contacted), contact made, demo completed, interest shown, broad level criteria matched etc.

Middle of the funnel. Buying committee identified, budgets in situ, buying motivation triggered, willing to undertake change management, obstacles removed, solution presented, meetings, negotiating in play etc.

Bottom of the funnel. Decision time, Delivery, implementation, timescales, customization and payment all agreed. Deal Won.

The best and most experienced salespeople know the sales funnel inside out. There are two main motivation factors for this:

  1. They can use criteria to measure the customer’s interest levels and then deliver the right sales messages at the right time, and
  2. They can maximize their time in the sales process and forecast their own sales needed to achieve their revenue goals.

Simply put, a well-defined sales funnel improves the customer’s interactions with the salesperson as well as company’s ability to measure sales metrics.

Stages in a sales funnel

There is no one size fits all when it comes to mapping out a sales process and customer touch points from the sales team in progressing a sale. However, a good starting point is to use the three distinct stages in the structure mentioned above.

1. Top of the sales funnel: The awareness and discovery journey

Whether inbound or outbound engagement with a customer, early in their journey they need to leave their status quo (current position) to explore alternatives to a problem, to research, be educated and learn more about solving it. It is important to acknowledge that in this early part of the journey, they are still identifying their challenge, whether to move (and undertake a change management process). As they have many questions, they are seeking advice and information not a sales pitch. They may know the symptoms of the problem but need help in lining up potential options to consider (not buy). The buyer may not even reveal the symptoms to the salesperson, but the questions asked need to be understood so they feel comfortable going a little further.

 

The buyer is trying to crystallize the problem, the impact on the business and to justify taking action. They are looking for a trusted source of information and education, someone who could all things being equal, make buying easier. At the top of the sales funnel, the prospect wants to feel they have been educated, have found useful advice and be confident enough to open up to questions the salesperson will ask as a level of trust has been established.

 

From a sales management perspective, they want impartial content or research that will help guide them through the challenges that matters to them, including blog posts, articles and videos.

 

In this stage of the funnel, suspects turn into contact made prospects. Once engaged they become leads. This is where the salesperson understands the sales process and matches the correct activity to qualify the lead according to the company’s criteria, which is what brings us to the next stage of the funnel.

 

2. Middle of the sales funnel: The buyer is on a journey for solutions

In the middle of the sales funnel, the buyer has now left their status quo position and is considering undertaking the change management process that is necessary when opting to purchase a new solution. They look for vendors who are useful to them, ones that can make buying (if they decide) easier. They seek out content and information specific to their challenges. The salesperson now should now have formed a relationship, they know certain details about the buyer, connected on social media and started to build trust. For the buyer’s part, they have now defined their problem and they are look to narrow down the available solutions they believe can help resolve their pain points.

 

Salespeople now need to be prepared to listen to and answer questions matched back to the buyer’s position, vanilla type generic answers will not cut it. The buyer is no longer asking ‘why’ questions, (why change, why move, etc) but “how” and “what” type questions.

A sample of their how type questions could be;

“How could these options resolve my problem?”

“How would this vendor be able to support me?”

“How have you (the vendor) previously solved my problem with another client”

“What makes these vendors qualified to handle my business?”

“What level of trust could I have in these suppliers?”

“What have I seen or read that gives me comfort to move forward?”

 

The middle of the sales funnel is usually the make or break moment. The buyer is investing time and resources into delving deeper into the specifics of the problem. They may have formed a buying committee to gather data and to know the possible solutions.

 

It is important to note that at this point they are still in research mode, looking for insights and help, even if they are engaging with a salesperson. They are not ready for the big sales pitch but instead are looking for the types of solutions the buying committee would buy into.

 

An example would be, will they buy a new SaaS CRM software solution or upgrade their existing in-house solution. Another example: the B2B buyer is unsure whether they need employee engagement software or hire in an employee engagement consultant.

 

The type of content that salespeople should serve up to the prospect at this stage of the sales plan  includes third part reviews, independent research, peer reviews, guides, checklists, ROI (pros versus cons options) and other insightful neutral pieces.

 

It is important that the salesperson working the lead has the sales skills to ensure they qualify them in or out at this stage. The sales process steps should ensure opportunities to talk and engage with the buyer are mapped out, what questions or criteria needs to be completed in order for them to continue sales conversations, and to get commitments that the solutions on offer are a fit to their problem.

 

3. Bottom of the sales funnel: Make buying easy to get a decision

Now we come to the final stage in the sales funnel. The buyer and the buying committee now feel confident they have enough information about their problem, the preferred solution for them, and are ready to select the provider to purchase this solution from, provided they make buying easy.

 

This is the reason why their questions and validation points in this stage become vendor-driven. The information they seek (plus gather via social media or online searches) and the questions that need answering might be like these:

“Which supplier will provide the best pre-sale support”?

“Which supplier offers the best implementation path”?

“Which provider will provide the best support”?

“Which vendor has solved our problem before”?

“Which one offers the best terms and contract”?

“Which one has convinced us they will go the extra mile for us”?

 

sales-funnel-example

Sales funnel example

The company that makes buying easier by having answered these types of questions will get the decision as they have built the trust that they can match the buyer’s exact needs, addressed their specific problems, deliver within budget, and provide the other relevant resources to make the buyers life easier.

 

The content to support bottom of the funnel sales activity should include, specific customized proposals, testimonials, case studies, comparison data, cost of acquisition guides, change management support, industry awards or recognition, proof of concepts, and competitive feature analysis. This type of content shared in the final sales presentations will reinforce their confidence that your company will make buying easier and the right choice to partner with.

 

Now the prospect or buyer will have the final proposal presented to them, have a round of negotiation conversations (again to reinforce they have the right partner), after which the deal should be concluded favorable.

 

Operating a sales funnel in conjunction with a well thought out sales process is vital for any sales organization but especially for SaaS type sales where consultative and navigator type selling is required to engage more buyers and prospects.

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