Your Sales Funnel: Fiction or Reality?

How much business do you have in your funnel? That’s not a rhetorical question. Look up the number – and then remember it because by the end of this article, it’s going to be a lot smaller. That’s because most sales organizations’ funnels are based on selling activities, not buying activities, and thus the numbers tend to lean more toward optimism than reality. When you shift to a "BuyCycle Funnel," which aligns your selling activities to a prospect’s buying cycle, you get a far more accurate picture of where pending sales stand – and that "more accurate" picture is often bleaker than the one painted by your traditional funnel.

In a recent Webinar, The Secrets of Funnel Management in a Sales 2.0 World, Mark Sellers, author of The Funnel Principle (Breakthrough Sales Performance, 2008), observed that the traditional funnel used by most organizations has "really outlived its usefulness. It’s designed not from the buyer’s perspective but from the seller’s perspective, and that can lead to a lot of errors in managing opportunities." The traditional funnel tracks selling activities that most reps can recite in their sleep: prospect, qualify, present, submit a proposal, close – or some variation thereof. "It’s all about what the next selling activity is and we’re doing all we can to drag that customer along," says Sellers. "Often, the buyer feels he’s being dragged along." In contrast, Sellers’ BuyCycle Funnel tracks buying activities, such as:

• Problem recognition
• Define economic consequences
• Commit funding
• Define decision criteria
• Evaluate alternatives
• Select vendor solution
• Place initial order

By aligning your selling activities with these steps, your reps undertake activities that match with the buyer’s needs as the customer moves naturally through this progression. That way, you’re not pushing prospects along your funnel only to discover they weren’t really ready for your presentation in the first place. "We often see people submitting proposals, giving away samples, giving quotes, moving prospects through the selling process without making sure the person is coming along with them," says Sellers. "When you accurately place the prospect in the funnel according to where they are in the buying cycle, you have a much more accurate picture of where you are relative to closing business in the quarter."

Of course, when you first undertake this shift you might be in for a surprise. Remember our warning that your funnel would shrink? Sellers recently worked with a company that estimated it had $36 million in its funnel. When Sellers mapped the opportunities into the BuyCycle Funnel, that $36 million funnel shrank to $5.6 million. After executives recovered from their shock, they recognized the upside to this revelation: they could coach their reps more accurately and they had the advance warning that they needed to focus on getting new opportunities into the funnel if they were going to make their numbers.

On a final note, Sellers points out that shifting to a BuyCycle Funnel is only the beginning of better funnel management. Since funnels ebb and flow over time, the only way to stay on top of them is to analyze them on an ongoing basis. Sellers recommends sales managers conduct funnel inspections every 30 days. Sit down with each rep, he says, and have a "very specific conversation" about the rep’s funnel and his or her action plan to improve it. After a few months, you may find you want to inspect funnels more or less often than that, but every 30 days is a good place to start.

For more information, visit www.funnelprinciple.com.