Use Funnel Reviews to drive Customer Acquisition.
Adopting an effective sales funnel review process is essential for your organization to increase its pace of customer acquisitions and accelerate sales performance. Whether your company is well established, expansion stage, or in emerging growth, it is crucial to understand why a disciplined funnel process is necessary and how to use the technique to focus selling activities to drive customer acquisition.
Many sales leaders believe their funnel review process is ‘good enough’ and not a primary area of concern, according to a recent CSO Insights study of 1,500 respondents. 71% of the respondents felt this way. But when asked about the performance of their funnel review process, the results were uninspiring. The study indicated that of forecasted opportunities in their funnel, on average:
- 46% of opportunities were won
- 31% of opportunities were lost to competitors
- 23% of options were “no decision.”
Nearly 54% of forecasted opportunities in the funnel were lost or were ‘no decision.’ And only 46% of forecasted deals closed as ‘won’ – less than the odds of a coin toss (50%). Perhaps complacency, inertia, or fatigue has set in, but these results are not leading indicators of high sales effectiveness.
It’s Not About Forecasts
Funnel reviews are much more than a forecast. A disciplined review process identifies the potential in the funnel and directs action on improving the funnel's accuracy, velocity, and health.
But even better news is that the advantages surpass the forecasted win rate. Investing time, energy, and effort to build a robust funnel review process create significant important benefits for growth-orientated companies:
- Time to Results. Regular reviews ensure selling activities are prioritized and managers intervene to advance sales opportunities, thus improving funnel velocity.
- Organizational Scaling. The efficiency of funnel reviews dictates the number of sales professionals needed and the team cost structure, enabling the scaling of the sales function.
- Repeatable Customer Acquisition. Effective reviews align selling activities with the buying process and reinforce how the sales process moves deals to closure.
- Resource Allocation. Resource (talent, time) decision-making is optimized on high-quality deals and de-prioritized on low-probability ones.
- Cross-team performance. Accurate forecasts have a beneficial cross-team impact on other business processes, e.g., financial projections, operations, customer services, etc.
A good funnel review process is a diagnostic tool for sales leaders to manage opportunities and effectively drive sales force effectiveness. And this builds credibility and confidence in the sales forecast within the company.
Choose to Stay Healthy
What steps must be taken to build a robust funnel review process?
First, select the right opportunities by utilizing an ideal customer profile for sorting your prospects.
- Identify the characteristics of those prospects that are best suited to your company’s product, service, or solution and are most likely to result in a win-win outcome.
- Add these opportunities to the top of your funnel, and you’ll pursue only those with the best chance of closing.
Next, focus on understanding your customer’s needs and what they are trying to fix, accomplish or avoid.
- Understand their view of the business situation, their sense of urgency, and their willingness to accept the change your solution represents
- Ensure there is a fit between your solution and the customer’s concept
- Be very clear on their decision-making process and who’s involved.
Disciplined Diagnosis
An effective funnel review process diagnoses opportunities that need attention and prioritizes selling activities that move deals to closure. The critical steps in this process are:
- Inspect for opportunities that have spent too much time in one funnel stage, have yet to progress through the funnel sequentially, or have a long time of inactivity.
- Ensure documented pursuit plans exist for opportunities that your process requires. It would be best to have a strategy for managing opportunities at every level of the sales funnel.
- Review all pursuit plans, diagnose for gaps, and coach behaviors to close the gaps. This enables you to manage change and remove surprises.
- Use opportunity scoring at each stage as a quick funnel health check.
Customer Connection
Ultimate success comes back to how well you engage customers and align your solution to meet their interests and needs – not yours. To keep opportunities moving through the funnel,
- Make every customer meeting count. Ensure the discussion focuses on the customer’s needs and that you gain incremental buyer commitment that moves the sale forward.
- Develop effective meeting plan strategies, questioning sequences, and listening habits.
- Understand how to differentiate your solution on strengths that matter to your customer.
- Learn how to connect with higher-level executives and understand how they make decisions.
Take Action
Few actions have more impact on sales performance than a good funnel review process. Take the time to build an effective strategy, and not only will you improve forecast predictability, but the disciplined profiling, diagnosis, and customer engagement will accelerate repeatable customer acquisition. And then the performance of your funnel reviews will have greater odds of forecasting opportunity wins than the odds of a coin toss.