Businesses can avoid a dry January! – Understand How Sales Funnels Go Wrong!

Martin Allison

By Martin Allison

How’s your sales funnel management? Probably if you’ve read even this far it’s not 100% where you want it to be. At least you sense it could be better.

Risk management is key:

  1. To avoid the risk of coming in below predicted target with implications for individuals and organisations
  2. To reduce the risk of business plans and cash requirements being driven off course;
  3. To capacity plan and manage the risk of non-delivery if unexpected business does come in at unexpected times.

We believe good funnel management does not just improve forecasting accuracy. It identifies potential problems in the sales process at the point when it is still possible to do something about it.

Why sales funnels go wrong:

Some sales funnels just seem to have worked out in the past. By some mysterious process you’ve always come in more or less on budget. No one quite understands how it happens but because it does happen, no one worries. But when the situation changes it’s very hard to fix what we don’t understand.

There are usually four “sales” characters that cause issues:

  1. “Keep it up your sleeve” – the salesperson who likes to surprise the business with good news. Sales appear as if from nowhere with a fanfare! The salesperson is quite hurt when project managers and service deliverers get frustrated with him or her. He doesn’t like to talk about opportunities until they are “in the bag”!
  2.  “The optimist”; this character is forever predicting sales that never seem to materialise. They genuinely believe the deal is going to happen (or perhaps don’t dare believe it won’t). There is always a good reason for a delay but the deals don’t happen.
  3.  “Don’t you trust me?”: With this character the conversation goes like this:
    “So how’s the deal looking” “Oh fantastic!” “How big do you think it will be?” “Massive!” “How confident are you it will convert?” “It’s for sure!”
    “When will we get the signature?” “Any day now”
    Any questioning is met with resentment. “Why don’t you trust me? Just leave me and MY customer alone and I’ll deliver. You’re just cramping my style!”
  4. “They’re all different”: In this case the salesperson has no understanding of sales process and can see no pattern to his sales activities. They believe the only way you can know what is going to happen is when it does happen!

So what are your options?

  • Do nothing and hope. Not really an option if you want to be in control.
  • Ask more questions of individuals: Increase the focus on pipeline in 1:1s. Keep the conversation anecdotal but make good notes and draw your own conclusions and make your own calculations.
  • Place a probability on steps in the process. You may have enough data and insight to be able to attribute these percentage probabilities.
  • Another way of using generic rather than case specific calculations is used by a firm of advisors who win most of their business through tenders. They divide the number of competitors by the likelihood of the project happening at all and then add a weighting for their competitive position in the bid.
  • There is one final approach: The Sales Leader keeps a weighting for each of his people. Before submitting a pipeline they increase the weighted pipeline of the pessimists by X, accept the pipeline of the accurate realists and reduce the figure offered by the optimists by Y.

If you would like to increase the accuracy of your forecasting, the efficiency of your sales funnel or your conversion ratios then please speak to us at martin.allison@saleslevers.com

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