Every business wants to increase sales and grow market share. Businesses will spend a large amount of time & money on improving their sales team’s negotiation skills, their ability to close business and ultimately, their ability to retain that business. There is one approach that companies use to simplify the entire sales process. Companies of all sizes use the well established sales funnel to manage the sales process from initiating first contact, assessing opportunities, providing a proposal, closing the first sale, and finally, growing & retaining business. However, success depends upon a simple sales funnel, and one that isn't predicated on passing through multiple levels in order to close the sale. So, what is a sales funnel? More importantly, how can you simplify yours so that your sales people find it easy to work with?
Understanding the Sales Funnel
Sales funnels are simply a company’s way of managing the sales process from initial customer contact, all the way to closing the order and growing the customer’s account. Sales funnels have been around for a long time and there are a number of ways to express the steps within the sales funnel. However, for the most part, all sales funnels have the same approach.
First, establish customer contact. Second, assess opportunities for business. Third, provide quotation. Fourth, close first order. Fifth, retain the business and grow the customer’s account. While I've quickly ran through these five steps, it's important to note that keeping it simple has some merit. Focus on helping salespeople move from step to step and shorten the process altogether. It keeps it simple and straightforward.
If your sales team needs insight on how to handle customer scare tactics and threats, then please read: Sales Negotiation: Defend Price, Customer Scare Tactics & Managing Concessions
Simplifying Your Company's Funnel
Admittedly, sales consultants, and consultants in general for that matter, love to put their own spin on well establish approaches. I’ve seen sales funnels that have up to 10 steps. However, trying to reinvent the wheel has never made much sense to me. I adhere to the basic concept of KISS – “Keep it Simple Stupid”. So, if you need to create an easy to use, and easy to track sales process, keep it simple. Here is what the sales funnel should look like.
1. Establish Customer Contact
This likely needs little to no explanation. However, make sure to clearly identify what this first step means to your company. It could be those leads generated by trade shows, conferences, meetings with potential customers or incoming calls and visits to your company’s web-site or blog.
2. Assess Opportunities
This second step of the sales funnel doesn’t just mean to identify the potential business. More importantly, it means to clearly identify those opportunities and individuals in charge of making the final purchasing decision. In this sense, make sure to clearly identify the opportunity and the decision maker within the customer account.
3. Provide Quotation or Proposal
Identifying the business opportunity, and the decision maker, within the sales funnel must always coincide with identifying the need for the quotation or business proposal. When you’ve successfully identified the opportunity and the decision maker, make sure to provide a quotation/proposal that addresses the customer’s needs. It is at this point that some sales funnels add a step. They separate this third step by saying that one step is to accumulate the proposal criteria and the next step is to provide the proposal. However, we need not complicate things and I am sure you realize that to provide a proposal involves assessing the specific criteria for proposal.
4. Close First Order
Now, some of you may get to this step of the sales funnel and immediately claim it’s the hardest one of all. Some claim that closing the first order is easy, but the last step of getting repeat business is the hardest. If closing business is your concern, don’t despair. Closing business isn’t always easy, and there are bound to be times when your company will be unable to close orders, no matter how many times you provide aggressive pricing or have everything working in your favor. However, if you find your sales people are stuck at this step, take a good look at the overall situation. Ask yourself the following questions.
- Is the sales person having a hard time closing sales in general?
- Is it just this one customer that’s unwilling to follow through with a purchase?
- How many customer accounts are stuck at this 4th step of the sales funnel?
Don’t be overly concerned about having some customers stuck at this step. Some customers have a longer sales cycle time than others. Still, if you find your customer is merely using your price to lower other competitive bids, then read the following two posts on how to protect your price and move the process forward. Are Your Sales People Protecting Your Pricing? & Protecting Your Price Against the Price Shoppers
As mentioned, some claim that closing the first order is the hardest part of the sales funnel, while others claim it’s retaining and growing the customer’s account. In this case, try some simple and straightforward approaches to building customer loyalty. For instance, use customer reward and incentive programs. If you need insight on how to build customer loyalty and retention, then read the following post.
The Customer Retention Plan That Keeps Customers & Grows Sales!
When it comes to using a sales funnel, be sure to clearly identify your criteria for each and every one of these steps. Make sure your sales people are tracking their customers as they move through each of the various steps within your company’s sales funnel. If a sales person is stuck at a step, then take the time to review what is working and what isn’t.
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