Sales Management

Sales Funnel 101 – What is a sales funnel and why it continues to be the best way to grow your sales

Monday, October 7th, 2013

If you’ve shared the workspace with sales managers (& sales people in general), you’d have probably heard this phrase a lot. How is your sales funnel moving? What’s the conversion rate? What’s the velocity? What is your revenue pipeline?

So here’s your initiation on the most commonly used sales jargon & terminology of the sales people.

 

What is a sales funnel?

Imagine you want to sell old cars and have 10 cars to sell. You have 4 BMWs and 6 Toyota Camry sedans. So you let your friends know and you also put out a listing on craigslist.

Almost immediately after you’ve done this, you start getting calls. 50 people call up out of which, 20 drop out because they were looking for a specific color or a lower price. The next 30 want to come and see the cars, maybe even take a test drive. After the inspections & the test drives, you are left with 10 customers who want to take it further. 5 of them start negotiating on the price while the other 5 just tell you that they’ll let you know if and when they decide.

You are reasonable in your negotiations but after all the negotiations, you end up selling 2 cars.

You go through the entire process again, only this time 30 people call, 10 come for a test drive, 2 negotiate and 1 buys.

What you’ve experienced is a classic sales funnel. Prospective buyers kept dropping out at every stage of the sales process and eventually a few funnelled down to closure.

A sales funnel elegantly captures this phenomenon where you need to go after a great number of prospective buyers to close even a single deal.

 

Why do (sales) people love the sales funnel so much?

Sales funnel is a simplistic metaphor to drive a sales process. It’s quickly relatable and understandable across the entire organisational hierarchy. So everybody from the CEO, to the tele-caller can understand the sales funnel and therefore relate to it.

It became the language in which the entire organisation communicates about sales. It also therefore helps companies drive down their sales objectives and goals.

 

Is the sales funnel suited for your business?

A sales funnel works if the selling spans a significant time-span

Selling over-the-counter doesn’t really require you to track your customer over the different stages of the sales funnel. If you running a food-kart or a retail store, you’d notice that customers come in, find or ask for what they need, pay for it and are out of the store. On the contrary, in the car deal, where there were delays in between the time they enquired and they came to try out, you’d need to track the prospects along the different stages

Oh and retail stores have their own sales funnels which is quite different.

 

It makes sense if you have multiple people involved

If you are selling to enterprises and corporates, chances are there’d be more than one person you’d be dealing with to take the sale forward.

When you are doing a demo of your product, you’d likely to engage with the direct users but when you’ve submitted a contract, its likely going to be with legal department. A sales-funnel takes such relationships into consideration.

 

What if you don’t have a sales funnel?

You probably do. If there is a repeatable sales process that you are following, you are using a sales funnel, whether you realise it or not. If you don’t and unless you have very few leads, I’d strongly recommend that you build one.

A sales funnel will give you great clarity and insights into how your business can grow. You can analyse the funnel and it’ll tell you where deals get stuck; who are selling; how are they selling and why aren’t others selling? It helps you measure current performance & forecast growth.

A sales funnel doesn’t just streamline your sales, it streamlines your entire business.

5 essential characteristics of awesome salesmen

Thursday, January 31st, 2013

To put it simply, an Awesome Salesman makes successful pitches to any client even on his worst day. But what is the secret behind his successful pitches? What does he know that Less-Awesome Salesmen do not?

What separates him from the rest is that he has a great understanding of the following:

He understands his product

The product is what the salesman is selling, championing, living and breathing. The Awesome Salesman knows all the benefits, costs, hazards, uses and misuses of the product so well that he can talk about it in his sleep. He knows where the product comes from, who makes it and what goes into making it. This thorough knowledge of the product is the source of confidence behind the salesman’s pitch.

He understands his customer

The prospect is the person or business that could need the salesman’s product, either in the present or in the future. The Awesome Salesman knows when, where, how and how much the customer could use his product. In simpler words, the salesman should know the context of the customer’s usage: the place, time, frequency, manner and quantity of usage. The knowledge of these parameters allows him to better relate to the customer.

He understands his company

The Awesome Salesman knows what business his company is doing, and also that this would be the same business he is doing. He embodies the company’s brand, its image,what it means to customers, its values and mission. That gives him credibility in the customer’s eyes

He understands relationships

The Awesome Salesman is a relationship manager and a point-of-contact for his customers. He brings them news of his company and products to keep their interest and business alive and kicking. He lets the customers know that they matter to his business.

He understands how to communicate

This is the most critical of them all. The Awesome Salesman knows what, how, when and whom to say the right words and use the appropriate mannerisms to sell his product, discover his customers’ needs and habits, and leverage his company’s brand correctly and efficiently. His communication skills and his knowledge of the above join forces to make that flawless pitch.

 

awesome salesman - 5 characteristics

 

This guest post by Afzal Hussain, a student at the Indian Institute of Management, Calcutta. We present you this post as part of the “World View” series on our blog. This is a business-schooler’s world view of what makes an awesome salesmen.

Yavvy CRM Android App – Sales tool for the mobile salesforce

Thursday, November 1st, 2012

Quite a few of our sales users actually are on the field, meeting people, answering appointments and doing their sales on the move. So we are making it easier for them and you to remain active on your sales funnel even while on the move.

Yavvy Android app is out and it’ll remind you about your meetings and follow-ups; it’ll help you record your interactions and it’ll help you find contact numbers and addresses of people you have on Yavvy CRM.

We have a big long road-map about things to come for the mobile users. Expense Management is in active development and you’ll be able to book orders as well in the subsequent version.

And did I forget to mention, there is no additional charge for the app! Go on, install it, Its available on Google Play.

https://play.google.com/store/apps/details?id=com.yavvy

Yavvy-CRM-android-app

Qualify your leads better – Building a better top-of-the-funnel strategy

Wednesday, September 5th, 2012

Unless your product is perceived as 200x of your competitor’s, it’s your sales process that determines how painlessly and how many customers you’ll add. It is therefore immensely important for every organization to meticulously understand and define their sales process and in turn their sales stages. Every sales lead or opportunity moves through different stages before the sale is closed. These stages themselves may be categorized in one of the three – top of the funnel, middle of the funnel and bottom of the funnel stages.

Top of the Funnel

Top of the funnel sales stage are those stages where you have to establish if the lead has intent and budget to buy your product. This is also referred to as “qualifying your lead”. A head of sales of an IT company told me once that he was losing a lot of his opportunities really late in the sales process. A possible reason for such behavior usually is incorrect qualification of leads. If you allow everyone to move deep into the sales funnel, you would end up spending a lot of time and effort with leads that weren’t actually leads. The flip side could also be when you impose such rigorous qualifying criteria that they sieve out even the fence sitters.

One of the ways to manage this is to have different stages of qualifying, each with its own specific qualifying criteria. For example, in the first stage, you could simply qualify the lead on whether he has need and budget. It’s only in a subsequent stage that you re-confirm whether the person you confirmed the budget with was a decision maker or not?

Every funnel will have drop-offs, which is why it’s important to sieve out the drop-offs as early in the funnel as possible. The later they drop, the more time and effort they would have consumed. It also impacts morale.

Balancing the qualifying criteria – How do you know if you are over-qualifying your opportunities

Mimosa Basu, a marketer with an IT products company told me that one of the reasons for their low conversions was that they were spending too much time qualifying the opportunities. Even when a prospect has shown interest, her sales team would continue asking and confirming the interest. “They would lose their interest and once a prospect loses interest, your chances of closure drop significantly.”

Ask her how did she find that out?

“I saw that 80% of my Educate the Opportunity stage opportunities would convert. If 80% of opportunities in the second stage of my funnel were closing, then Educate the Opportunity was effectively my closing stage. I also looked at how much time prospects are spending in the top-of-the-funnel stages. If that is a lot, you are definitely over qualifying.”

The two quick metrics that can tell you whether you are over-qualifying or under-qualifying your opportunities are

-       Amount of time opportunities spend across stages.

-       Percentage of drop offs across stages

Yavvy offers you both these metrics. You can view them in CRM Analytics under Opportunity Reports. This data is also available in the funnel view.

The individual influence – Some salesperson over qualify, other under-qualify

An individual salesperson’s impression is probably the most important qualifying criteria in a sale. Unfortunately, not all salesperson come with the experience and the functional knowledge to take the correct judgment. You therefore run the risk of one salesperson being too lenient and the other being too strict.

An easy way to get around this is by using checklists. You could have a series of checklist questions, which could help salesperson qualify the opportunity.

In Yavvy, you can use milestones to achieve this. You can place a milestone in between two stages. That way, opportunities move from the first stage to the next only when the intermittent milestones have been achieved.

Yavvy Sales Funnel stages

 

A product company on Yavvy CRM places the Demo/Webinar milestone in between Needs Understood and Proposal Submitted stages.  That way, the salesperson remembers that he/she must give a webinar/demo before submitting the proposal. The checklist associated with the demo/webinar usually brings forth more information, which is then added to the proposal.

When you are qualifying, you are also being qualified

Top of the funnel stages are all about getting to know your opportunity and your opportunity getting to know you. Therefore another important outcome of the qualifying stages should be better prospect profile. You should ideally have more data about the opportunity.

Financial profile, IT Systems profile, No of Employees, Sectors, Subsectors, no of offices etc are just some of the profile data that B2B companies may want to capture for an opportunity.

 prospect profiles for sales CRM

Use Configurations >> prospect-profiles in Yavvy to achieve this.

And while you are building familiarity with the opportunity, share information about yourself too. You could have different email templates with information about your product etc to share with the customer. When the opportunity reaches a certain stage, you should shoot out the email.

The better top-of-the-funnel strategy

Is the one that adapts with time. Be prepared to spend time tweaking your top of the funnel strategy. Analyze outcomes and benchmark them against past performance. Trust me, it’ll be time well spent.

Using milestones to build a better sales process

Tuesday, August 21st, 2012

Sam, the Head of sales came back with a simple request. How many sales opportunities had seen the product demo? He went inside his sales funnel and saw 250 opportunities in Need-Analysis stage, 150 opportunities in Give-Proposal stage but there was nothing telling him how many of those 400 opportunities were given a product demonstration.

He now went inside each of these 400 opportunities and searched for the words “Product Demo” in the comments. It would have worked but Cathy had the habit of writing “Product Demo rescheduled again” and the words showed up across 429 comments.

At the end of day, Sam downloaded all the comments into an excel and spent 4 hours reading and figuring out how many opportunities had been given a product demo.

The next day he opened up a new stage called Product Demonstration but it did not work. Opportunities would come into this stage and then exit out to the next stage. Also it disrupted the entire flow because an opportunity would suddenly ask for a second product demonstration after closing the order.

If you are facing this problem, chances are that your CRM does not support the concept of milestones. Every funnel has milestones or tollgate stages that you want to capture. They help you understand where the problem is and where the opportunity is. If 90% of all those who see the product demo convert to an order, you just need to make sure that you are able to give as many product demos as possible.

This is also the reason why we created the concept of milestones in Yavvy. Yavvy manages milestones within the workflows so that you can understand how your sales funnel in progressing over a period of time.

 

Every_sales_process_needs_to_track_milestones

Go on give it a spin on Yavvy. You’ll love it! And you can always call our friendly neighborhood Solutions Advisors should you need us to set them up for you.