Your funnel maps the progress of leads through the marketing and sales process.  Some companies have separate sales and marketing funnels, and some combine them. For the sake of understanding the progressions, let’s combine them for now. 

It’s important to understand that only a small percentage of leads will make it from the first stage of your funnel to close.  The ratios are important.  You will need to be clear about how many leads are needed at each stage in order to close enough deals to hit your sales goal. 

Let’s say your marketing to sales funnel goes like this:  Engage, Download, Marketing-Qualified, Sales- Qualified, Cultivate and Close. 

Calculate the loss ratio at each stage, and how fast leads typically go through the funnel.  Once you know those ratios, you can calculate how many leads are needed at each stage to hit the sales goal overall, and for each product.  

Let’s run through an example:  For product 1, how many leads need to go in the top of the funnel, for one to come out the bottom?  We can work that backwards.  For one to close, we need at least 4 in Cultivate, 7 in SQL, 10 in MQL, 20 in download and 100 in engage.  Next you can figure out how long leads typically stay in each stage.  The speed from stage to stage is the velocity.  That could speed up or slow down at different stages. 

Some leads don’t come through marketing. Sellers may prospect in existing accounts, get referrals or cold call. These leads will have different close ratios and velocities.  

The first and most important thing to measure is if there are enough leads/opportunities at each stage of the funnel to hit sales goals. If your sales goal is $10,000 per quarter, your average sale value is $2,500, your sales cycle is 12 months, and your sales ratio is 10 prospects to one close, then you can figure out the math from there. 

 At any given time, the funnel needs to look like this:

Second, are things moving through the funnel at the right velocity? The KPI around that might be based on average number of days from sales qualified to closed.  If the average is 12 months, then the average should be around 365 days. 

Those measures may be the most obvious, but there are some other key KPIs that matter.  Many companies measure the number of calls or emails.  While that may matter if you have SDRs or sales reps who are cold calling, that number is less important once a lead is qualified.  

Once a lead is qualified, it is important to track the next actions.  Every lead must have at least one next action planned.  That next action should be very specific.  “Follow up” doesn’t work because if a rep is working on 100 leads, they won’t remember exactly what to follow up about. The next action needs to be a specific action, ask or deliverable. 

Another measure is how many qualified opportunities have the next meeting or phone called scheduled with the client.  If the client hasn’t agreed to a next action, chances are, the next meeting will never get scheduled. 

Before you hire, you will write out the type of salesperson you are looking for and exactly what you expect them to do. If you aren't clear on your sales process, from targeting your customers to closing, onboarding, retaining, and growing, you won't know who to hire. Which part of the sales process do you expect the salesperson to do? All of it? The prospecting only? Do you need someone to manage and grow your existing customers? Once you map out your sales process and determine what parts the salesperson will need to do, you will know what skills and experience you need to hire.  

Getting ready to build a B2B Sales organization? Schedule a FREE Strategy Call. 

Be strategic about targeting. Letting your sales team decide which companies to target is not strategic. In fact, without direction, they will always do what is easiest, not what is strategic. Outline your ideal customer profiles, then give your team a list of targets to pursue.   

Your ideal customer is the kind of company that is the best fit for your product and the way you deliver it. You can define this by size, industry, buying process, current software systems they use, or any number of other things that will determine how easy it will be to sell to them and how effective your solution will be for them. You want to avoid difficult sales and difficult implementations. Focus on the customer that will buy more in the future.  

Make a strategic target list of companies that meet your ideal customer profile that you want your sales reps to pursue or grow. Give each sales rep a manageable list for them to pursue. Let them know that these are the priorities.  

Understanding the lead generation process is critical to hitting your goals. How many prospects do you need to have at the top of the funnel to close the number of deals you have at the bottom? What is your lead-to-close ratio? Keep the qualified leads flowing if you want to hit your goals. Coach your team so that the leads keep moving through the funnel. Be sure to continue to prioritize qualified leads that are likely to close.  

Sales reps need qualified leads to close and you need a great plan to get them. Work with marketing to determine the best sources of leads and make sure marketing knows exactly what they are expected to deliver from each activity. For instance, if you are going to a trade show, you need a plan for getting a certain number of qualified leads from the show.  

If you want your sellers to be successful, set them up for success by clearly communicating the company vision, positioning and value proposition. Then provide them a profile of the ideal customers in your target markets and a list of target customers for them to pursue. Make a detailed plan that can be broken down into individual sales plans and quotas and make sure marketing is working to generate qualified leads to pour into their funnel. Everyone will be far more effective when they are clear on who they are selling to and why.  

If you are ready to start your sales strategy read 7 Steps to Build an Effective Sales Strategy or download the Sales Strategy Guide .

Now that you understand the critical pieces of your strategy, it should start becoming clear how strategy acts as a filter for decision-making. If your team doesn’t understand your strategy, they may not be able to make good decisions about resource investment, partnerships, product development or even sales strategy. 

Values become a filter for solving problems every day. Goals become a filter for resource allocation. Ideal Customer Profile helps focus your marketing and sales teams on the clients you want most. Positioning determines the story you are telling and impact decision making from marketing to ops. All of these things affect decision making in every part of your organization, including sales. 

If you are ready to start your sales strategy read 7 Steps to Build an Effective Sales Strategyor download the Sales Strategy Guide .

A revenue goal alone won’t result in the long-term strategic sales you need to sustain growth. But building a great sales strategy will help ensure the success of your team. 

To create a great sales strategy and to effectively execute it, your sales team needs you to answer six big questions: 

1. What’s the bigger picture? 
2. What Ideal Customer Criteria can they use to prioritize prospecting? 
3. What are the top companies we want to reach and sell to successfully? 
4. What is your position in the market? 
5. What value proposition is appropriate for each buyer persona? 
6. What support can sales depend on from every department in the company? 

Here’s how you can answer each question and position your sales team for success. 

Did you know that in some companies as many as 90 percent of leads never receive a follow-up call? Sure, some of those leads may be unqualified or may not be worth your sales team’s efforts—but what about the one that is? 

If your sales team has a glut of mediocre leads and no way to prioritize them, it’s likely they’re missing the opportunity to sell to the right person. To help them prioritize leads, provide sales and marketing Ideal Customer Criteria they can use to measure a potential client. This information will help your reps filter prime opportunities and pursue them in a focused way. 

For your sales reps to effectively sell your company and products, they need to be able to communicate your position in the market. Look at the strength of the market, brand awareness, competition, and outside factors such as technology landscape or economics to clarify your positioning. Once you’ve completed your analysis, provide your team with a summary of your findings and a positioning statement they can use. 

Even with the answers to all of the above questions, your sales team will still be unsuccessful if they do not have buy-in from every department in the company. Many companies have at least one sales prevention department. It could be a production department that can’t fulfill the orders that the reps sell, or legal holding up contracts, or maybe it’s accounting. 

Every member of your company needs to understand the sales team’s goals, how they are expected to achieve those goals, and how they can support the sales team. To get there, make sales a fully integrated part of your company. And ensure that other departments know the value and critical nature of a high performing sales team. 

As I said in the beginning, sales strategy doesn’t start with sales. It ends with sales. If your sales team only receives a revenue goal, they will never be able to understand how to reach that goal in a way that grows your company for the long-run. 

If you want more information about writing a winning sales strategy.  Read 7 Steps to Build an Effective Sales Strategy and download the Sales Strategy Guide. 

More importantly, the funnel is the tool you use to manage your leads/opportunities. It is the single source of truth about all your opportunities. It might be a spreadsheet, or a view/report in your CRM. Whether you keep it in a CRM or spreadsheet, it is a depiction of the status of all your leads. It is also a way to see how well you are positioned to hit your goals. 

Some people use the word pipeline, but funnel is more accurate because the shape represents what actually happens as leads move through the sales process.

Decide on a naming protocol you are going to use and stick to it. Think about how it will show up in the different views that you use and make sure there is enough information to understand at-a-glance.  The naming protocol should tell you what order and what to include. You will probably want to put the company name first and then the product? Remember that there may be multiple opportunities for any one company. 

Depending on the program you are using, you will have another space for company name. That is OK. You may also have another place to put the product name. That is also OK depending upon the views that you use. 

Once you get past qualify, make sure you have an amount in either volume or dollars or both. Keep that updated as you get new information. Also include stage and close date. These two should be closely tied together and updated as the opportunity moves through the sales process. Finally, include a next action or task for each open opportunity. Don’t let those get out of date. 

Find me on LinkedIn and tell me how your challenge goes -Liz Heiman

If you want to read more about the funnel. Read The Magic Funnel and Manage Your Business with the Funnel. 

I believe in strategy. More importantly, I believe in a well thought out, successful sales strategy. I have seen what happens when sales teams of all sizes forge ahead without a clear plan. In short, it’s chaos.

A business strategy, market strategy, or successful sales strategy should deliver these critical results:

• Clear priorities everyone understands
• Clear outcomes everyone can measure
  
• Clear guidelines everyone can follow
• Clear goals everyone can work toward

Without a strategy, sales teams and leaders make decisions based on what is best at the moment. Not because they are selfish or short-sighted, but because they don’t know the big picture. The best analogy I can think of is a ship. Imagine if the captain yelled “Cast off,” but the crew didn’t know the plan. How would they know which way to steer? How to trim the sails? Or even how to stay out of the way? A strong crew works most effectively when they are well trained, have clear instructions, and know where they are going. If any of those elements are missing, then that’s a recipe for a shipwreck.

Your sales team may not need to know how to trim the sails, but they do need to know the following for a successful sales strategy:

• An accurate Ideal Customer Profile
• A SWOT analysis
• A well-thought out market strategy
• Precise revenue goals
• Clear positioning
• Detailed action plan
  

Too often, sales strategies start with someone at the top coming up with an arbitrary growth number based on investor demands, new product development, operational capacity, or some other factor that has absolutely nothing to do with sales. That growth expectation gets divided among regions and reps in ways that are equal, arbitrary, or based on some often-unsubstantiated belief about which markets or reps can support the most growth. Unfortunately, these poorly-planned strategies often result in declining morale, increased attrition, and ultimately poor business results.

Whatever orders come from above, they must become a strategy that can support the desired growth.The secret to sustained growth is creating a powerful sales strategy to support it. Here are the seven steps I recommend to create this type of strategy.

A SWOT analysis will tell you how well you are positioned to grow existing accounts, find new accounts like the ones you have, and land new ideal customers.  A SWOT includes an assessment of  your Strengths, Weaknesses, Opportunities and Threats (SWOT).

A SWOT is not an exercise in imagination. It should be as rooted in reality as much as possible, so pull your sales, marketing, and product teams together to do the SWOT. 

Your job is to figure out how to leverage your strengths to capitalize on opportunities. Consider your weaknesses and threats, the internal and external obstacles that will hinder your ability to achieve those goals. Ask yourself and your team what needs to be done to minimize these threats and weaknesses. Be specific in your efforts. Look for the reasons you are not selling more to existing clients and the reasons reps are having a hard time closing business. Understand which products sell well and why. You will need this information to build your plan.

The market strategy you created will help determine how you need to position your company and products to achieve growth. Remember, you have different market segments that each need a clear positioning plan.

• Large Accounts
• Opportunities inside existing accounts with different product lines
• Opportunities inside existing territories and markets
• Companies that meet your ideal customer profile
• How will you identify them?
• How will you make them aware of your product?
• How will sales and marketing work together to prospect and sell
• New Markets, New Products.

It is not sufficient to ask salespeople to figure out the positioning. The sales, marketing, and product teams need to work together to create buyer personas or positioning statements and value propositions that meet each different need.

The sales process is the process the salesperson follows from the beginning of the sale through the close of the deal. Ideally, it should mirror the buying process your customer goes through.

For some sellers, deals close in one or two conversations in a matter of days or weeks. For others, it takes a lot longer and many more interactions. The more complex the sale is, the more conversations are required over a longer period. Some sales have as many as a dozen buyers and can take 12-24 months to close.

The more complex the sale is the more moving pieces there are to be tracked.

Now, imagine (yes, I know some of you don’t have imagine this) there are 100 sales opportunities (deals) with 10 buyers each and each deal is in different stage in the sales process.  How can you possibly keep track of that?

Start by breaking the sales process down into stages.  I usually recommend 5 or 6 stages.  Then you can track the opportunity (deal) through the process from prospect to close.  During each stage, you will have questions that need to be answered, activities that need to be completed and a gate you need to pass through to move to the next stage.

Gates are the rules for moving an opportunity from one stage to the next. They go something like this.  The gate to move from prospect to qualify is an agreement by the prospect to have a meeting to discuss the opportunity. 

 
The gate to move from qualify to cultivate is that you have confirmed a need, fit, estimated budget and estimated timeline.  Those may change some during the next stage, but you have enough information to determine the customer is serious and there is potentially a good fit. 

The gate to move from cultivate to close is that you have enough understanding and agreement to provide a final contract. You may have gone through some proposals to get here, but at this point you agree on what they need, how you will provide it, what it will cost and when it needs to be paid for. You move into close when you deliver the contract for signature. 

You move from close to won once you have a signed contract and at least an initial payment. 

You move to lost at any point along the journey that you determine they aren’t a good fit, or they decide not to buy from you.  Be careful that you don’t assume a few unanswered emails means the deal is dead.  It can take 8 calls to get a prospects attention even once you are in the sales process. 

If you are using the funnel/sales process to prioritize your work, which I hope you are.  You are qualifying out those leads least likely to close so you can focus your attention on the leads you are most likely to win. That is the first way you can use your sales process to prioritize.  The second is to look at the shape of your funnel and determine what you need to do to get it back to the right shape. What work have you been slacking on? Is it prospecting or follow-up where you need to put some focus?

The third way is in your everyday activities.  The most productive way to prioritize your selling work is to start with the bottom of the funnel. Close what needs to be closed. If you have gotten this far, you don’t want to waste all that hard work.

The next priority is filling the top of the funnel. If you close something, you need to put 10 things in the top of the funnel to replace it.  Next, qualify and finally, cultivate. You will spend the most time cultivating or covering all the bases, so make sure you make time for top of the funnel work. 

So, if that is how you prioritize it, you still may not be clear how to manage it all.  There are a few easy things to do.  First, document everything.  You may hate updating the CRM because it is time consuming and tedious. I get it!  It is also the best way to manage all the information you need to manage.  Put in notes from every meeting or call, even emails if it helps.  Then, now this is important, after every action, plan your next action and create a task.  Whether you use a CRM or a spreadsheet, having that next action planned with a date attached will help you manage your time. 

The final thing I recommend is to plan your day.  Looking at your CRM or funnel may seem overwhelming, so each day plan what you are doing that day.  This may seem crazy, but you might want to look at the funnel and tasks in your CRM and make a list of what you are going to do today.  Remember, you have 4 kinds of selling work to do every day, prospecting, qualifying, cultivating, and closing.  Put your work into 4 categories and only put on your list what you can accomplish today. Maybe put 4 in each category.  Now only use the CRM to find what you need to do the work you have decided to do today. 

Last warning, I recommend doing that the night before or first thing in the morning. Once you set your priorities, listen to messages, and read email.  Before you drop everything to react to your email and voicemail, look at your list for the day and decide what is more urgent, and what is more important.  There will always be more urgent activities than prospecting, but there will be few things that are more important in the long run.  Don’t put off prospecting. Make time every day if you can, or at least every week.