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Challenges with Managing via the Sales Funnel

One of the most common models for managing sales activities and sales teams is the concept of a sales funnel.  This model is built on the premise that you put in some amount of activity into the top of the funnel and out of that you will get a certain number of conversations.  And out of those conversations, you will get a certain number of appointments set.  And out of the appointments that you execute, you will get a certain number of sales leads.  This pattern continues leading to the fact that a certain percentage of the leads produced should be closed and this is what comes out of the bottom of the funnel. 

While the math and logic with the funnel is all sound, there are three pitfalls that can limit the reliability and consistency of this model.


1.   Assuming Effort = Results

If we subscribe to the sales funnel model, then we are believing that putting in some amount of activity into the top of the funnel will lead to some amount of results.  But in the world of sales, effort alone is not guaranteed to lead to any results.  If we work hard and put in a high level of effort but our messaging and technique is not where it should be, we could actually see little or no results for our hard work.  This is because the business world is very competitive and if we come in second place, we will not get any points for trying real hard.  As a result, if we put any amount of activity into the funnel and have an expectation that results will be produced, we could be creating an expectation that is built on a weak foundation.


2.  Assuming Ratios are Static

Another pitfall that we can fall into is believing that the ratios throughout the sales funnel are somewhat fixed and should be the same for everybody.  This would allude to the expectation that everyone on the sales team should have the same conversion rates throughout the funnel – creating conversations from cold calls, converting conversations to meetings, and for converting leads to closed deals. There are many factors involved and every sales person is unique so it is would be fairly unrealistic to have expectations for different members of a sales team to have similar funnel shapes.

In addition, we can also get hung up on assuming that the conversion rates are what they are and that there is not a whole lot that we can do to improve them.  We may believe that hit rates, lead rates, and close rates are somewhat fixed and that the main variable that we need to focus on and manage is the activity level that is put into the top of the funnel. 

 


3.  Only looking at the top of the funnel

Picking up where the previous pitfall leaves off, we can get hung up on only focusing on the top of the sales funnel and the level of activity that we are putting in.  We need more sales so we throw more callers and more actual dials at the problem. While we definitely need to make calls as we can’t just wait around for prospects to call us, this strategy is flawed on the basis that if our message or our technique is off, we could just be doing more of a misdirected approach and the extra effort might not yield results and could be a waste of time and money. 

 

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Launch Pad Solutions provides sales consulting helping managers to improve the sales funnel.
 

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This article was published on Saturday 05 November, 2011.

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