How to Create a Sales Funnel
Imagine rock climbing for a moment, even if you haven’t done it. You’ve picked a route you’re going to follow, or at least you know the destination – the top – even when the route might vary a little from what you first expected. To climb to the peak without any protection would be foolish, so you have safety pins (aka nuts, hexes, and camming devices) that you drive into the side of the mountain on your way up. As the pins are the only thing stopping you from dropping to the ground if you were to fall, you make damn sure they’re pinned to the wall properly. All you can do to move forward is to rely on the pins to stay in securely, and take steps.
Now imagine the same process in sales. To reach your destination – the close – you can’t simply jump to it without going through the necessary steps of your sales process.* Think of these steps as the metal pins you need to drive to the wall – you can’t start climbing toward the next step before the last pin is fastened and strong. To put it another way, if you don’t fall, you have moved on.
*Assuming your product/service is priced high and has a sales cycle that lasts for weeks or months.
Building A Sales Funnel
Each of these safety pins is a yes – an indication or confirmation of some interest from a prospect.
- Yes, sounds interesting, it makes sense to discuss the need.
- Yes, there’s a need for a solution.
- Yes, the solution is good.
- Yes, the terms are good, and finally
- Yes, I’m buying.
Make sure the yes you hear is strong – if it’s an uncertain yes, there’s no reason to move forward.
What feeds each of the yes replies are the activities in your sales process. In our most recent post covering key sales activities – the activities under your direct control that have the highest possible impact on achieving your sales goal – we outlined the following crucial steps:
- Demo prospects.
Think of where they are in your sales process – what kind of yes answers do you need to hear as a consequence of each key activity? Once you’ve done that, what’s missing from the equation for these to be your whole sales pipeline?
Building your sales funnel from your ‘Yes Tree’
Each of your sales funnel stages should be a defined outcome of an activity or series of activities. Therefore, you should look at your sales process and figure out which activities take the prospect to a new yes.
When you add these activities together with your yes-stages, you get the “Yes Tree.”
To build your sales pipeline, you need to transform the “Yes Tree” into sales pipeline stages. Simply name the pipeline stages as the state you’ve reached together with your prospect.
In the example above, your “Approach” via email and phone call has an outcome of prospect responding, “Yes, sounds interesting, it makes sense to discuss the need” and meet. “Meet” leads to an understanding by both parties that there’s a need for a solution, which in turn leads to a “Demo” and an agreement between you and the prospect that the solution looks good.
Reaching the close, however, usually takes a couple of more steps. Sending a proposal is often the last safety pin you’ll have to drive into the wall before you make the final climb toward the close. The final step in our example is sending over the contract. If everything goes fine, you’ll have a signature and a final yes, and you can execute or start planning the delivery process.
In this example, the decision to buy comes after a considerable amount of time has been spent on working toward it.
An alternative scenario would be the one-meeting-to-close business model where the first meeting (needs are established) and demo (prospect likes the solution and wants a quote) can happen during the same meeting. That meeting process is visualized below:
Some other sales processes require multiple buy-ins from technical and management sides of your prospect’s business. An example of a granular pipeline with four distinct meetings is here:
Depending on your preference, you might want to add a stage called “Qualified Idea” to the beginning of your pipeline. To approach someone, you first need to find prospects to approach – that means either research and list building, list purchasing, marketing lead generation or other inbound interest to lead engines. The point here is that in your sales cycle, you have to generate ideas of prospects whom you are going to approach. However, lead qualification itself should happen outside the pipeline so that you don’t clutter your first stage – the shortlist – with unsuitable leads.
How should you name your pipeline stages
There’s often a discussion about what to call your sales process stages. My thought is that it doesn’t matter as long as you have an agreement in your team on the following:
- What each of the stages means.
- What activities are required to reach each stage.
If you want to get your team on the same page, we suggest modeling a British tech company we recently spoke with, which has been granular in its approach to sales stage definitions and stage-to-stage qualification. You can find it here.
Once you have established your sales pipeline stages, the importance of careful stage-to-stage qualification needs to be emphasized. You should only move a deal into the next stage if the yes you hear is real. Remember, the yes is your safety pin – if it’s not driven in solidly, it can lead to a hard fall.
If you can’t “drive your pin in,” you should not move on with that prospect. By moving unqualified deals forward in your sales pipeline, or keeping those deals in your sales pipeline at all, is wasting both your time and that of the prospect’s, while at the same time eating away attention you could be giving to other – winnable – deals.
The snack-sized takeaway
To build a great pipeline, you should first construct your personal “Yes Tree” that describes your sales process, keeping in mind that you should only move forward with the prospect if the yes is strong and certain. You can construct the “Yes Tree” by thinking about all the activities that need to take place for you and the prospect to reach a new state, a new yes. Once you’re able to describe each of these new states, you’ve effectively built a sales funnel.
Image courtesy: Flickr