Sales are an investment, and like all investments, you want to ensure that your ROI is maximized. To achieve this, you need to ensure that your sales funnel is filled with high quality opportunities, which have a good chance of success, from clients you want to work with, and who want to work with you.
Selling is an intelligence-based process, and this intelligence is garnered through a mixture of effective market research (secondary) and strong client relationships (primary). The fewer the clients you focus on, the deeper your relationships can grow, together with your understanding of their business drivers and buying processes. Remember, when an opportunity matures and you are asking your salesperson for the intelligence required to win the job, this becomes much easier if you already have a strong client relationship, as many of the required data points will already be known.
Your sales funnel should mirror your growth strategy. If it doesn’t you should ask yourself the question why? Are you too attracted to large singular opportunities, or carrying over historical opportunities, just in case you might win? Do you have sufficient capacity within your business to effectively manage the quantity of opportunities within your funnel? Do you trust your growth strategy to deliver? Your sales funnel will drive future actions and investment decisions, so it’s imperative that it is managed robustly. Challenge, validate and optimize.
With your growth strategy platform and a high-quality sales funnel, you are well placed to deliver the growth that is required. What is then needed is for you to adopt the correct disciplines and behaviors to manage your opportunities through the different sales funnel stage gates.
Sales Funnel Management
Many businesses utilize a CRM (Customer Relationship Management) system to manage their sales funnel, which is typically broken up into 4 or 5 stages, structured around opportunity maturity. Your CRM provides you with opportunity visibility and allows you to manage your sales funnel through a stage gate management process.
This process helps you control sales activity investment, ensure robust development of opportunities and provide accurate financial forecasting data. With respect to the different stages of the funnel, whilst the names may differ, the importance of stage gate management (and CRM data correctness) across the funnel is of critical importance to maximize your chances of success.
Typical sales funnel stages are described below:
- PROSPECT: This initial stage of your sales funnel should be filled with potential opportunities based upon your growth strategy and ongoing market / client intelligence. These opportunities are not typically well defined and will require a number of assumptions with respect to scope, budget, duration and award date. This stage should form the largest section of your sales funnel, and provide the strategic focus for your sales team to begin to develop their client engagement plans.
- VALIDATION: The next stage of development is to validate the opportunity with your client. This may take a number of discussions to get to the point where scope and budget have been approved by the client. This is a key stage of the sales funnel where your ability to influence scope and differentiate your position with the client is at the maximum. This phase should conclude with a Go / No Go decision, where the business can decide whether to invest further in targeting the opportunity, or to remove from the sales funnel.
- TARGET: Once you have approval for further sales investment and the opportunity has been validated with the client, this stage offers you a limited time period to maximize your chances of success. Your highest investment in sales activities generally happens at this stage, so it’s critical to ensure this investment is spent wisely. During this stage, it is imperative that you collate all necessary win intelligence, solidify client relationships (zippering) at key levels within their organization, determine competitor landscape and understand your win strategy before the tender is released; at which time the client will typically restrict all informal supplier communications.
- TENDER: Upon receiving the tender documentation from the client, your business will need to conduct a Bid / No Bid decision to assess whether this final major opportunity investment should proceed. This stage is typically your opportunity’s largest investment of resources and time, so it’s imperative that this decision is given sufficient levels of executive focus, including a thorough review of the complete tender documentation and an assessment of your ability to win the work. It’s important to communicate and document the win strategy at the beginning of this phase, capturing all sales intelligence and giving strategic direction to your proposal team to develop a wining tender.
- EVALUATION: Once your tender is submitted, client evaluation will commence. This typically consists of ongoing formal communications to assess each supplier’s tender submission against agreed technical and commercial criteria, which will support a shortlisting of suppliers before final client decision. This stage is where the strength of your client relationship can come to bear, as a position of trusted partner status can often sway the client’s award decision due to perceived risk mitigation or trusted performance.
This stage gate process is typical of medium to large scale businesses, but can easily be adapted for smaller businesses, albeit with a lighter touch. The key point is that sales funnel management is a discipline which, if done correctly, can really maximize the effectiveness of your sales and marketing activities, which in turn will help you to deliver the growth you desire.
