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The Sales Funnel

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Qualifying-in | Flow management | Funnel shape | The marketing funnel | See also

Selling is like pouring water down a leaky funnel. You guide water into the top of funnel, but the only useful water is that which reaches the spout. This gives you some big problems around getting water in and managing leakages.

Qualifying-in

In the sales funnel the first job is qualifying in, deciding who to nudge into the funnel in the first place. This is a tricky decision, as once they are in the funnel you will be spending significant effort in getting them to buy -- effort you would rather not waste. On the other hand, if you qualify them out, you may be throwing the baby out with the bathwater.

Qualifying-in is thus a very important process. Get it right and you will have some brilliant prospects. Get it wrong and you will waste time on people who will not buy and, perhaps worse, lose those who will.

Flow management

Once they are in the funnel, the job is to progress them through it at maximum speed and with minimum effort. Along the way there may be a number of points where you progress them further or qualify them out of the funnel.

In the speed-effort equation, a common factor is that by adding effort, which often takes time, you may increase the value (to you) of the deal. This in itself needs careful qualification and monitoring -- it is easy to waste time selling just a bit more when your time would be better spent on another deal.

Some deals get stuck or move rather slowly through the funnel, making qualifying-out an important job. It can be easy for the funnel to become clogged and regular clean-outs are a good idea. Depending on your situation, this can mean getting rid of them completely or otherwise putting them on the back-burner.

Funnel shape

The size and shape of the funnel is important. The total volume of the funnel determines how many potential customers can fit in the funnel at once. If deals move slowly or if you have a larger sales force, then the funnel may be larger. If qualifying-in is difficult, then the funnel can be wide at top and then narrow down rapidly as you have early qualification-out exercises. It can also be stepped as successive qualification checks lead to prospective deals being qualified out at specific points.

You can make a better tunnel and work here can pay dividends. For example you can speed passage through it by improving qualification, greasing the sides (with less delays) and shortening the whole thing by simplifying the overall process.

The marketing funnel

Upstream of the sales funnel is the marketing funnel. The processes that drive potential customers to your door or which drive you to their door also have aspects of qualification and choice. If marketing sends the wrong message, then you may find the top of your funnel crowded with the wrong people. The marketing funnel should accurately feed the sales funnel and it is generally a very good idea for sales and marketing people to collaborate on this.

Not all selling needs a complex sales funnel, and if you are in retail sales, then your customers likely buy in one go. Yet the funnel principle can still be useful for you. Think about on a micro-scale -- how can you speed each sale? Think also of the upstream marketing funnel -- how do customers decide to come to your store rather than go elsewhere?

See also

Sales Funnel Metrics

Sales Books