The sales are the lifeblood of any business regardless of whether young or old, startup or corporate, B2B or B2C, they are the only thing that gives long – term viability of companies.
The companies have the need to manage a commercial function properly and establish a process to sell. It is essential to know the process to follow since a potential customer comes into contact with the company, assign who is in charge and what kind of presentations or materials are needed, what must be done to close the sales and even be clear at what time A sale must be considered closed.
At the same time, controlling execution through indicators becomes particularly important, because you can not improve what you do not know how to measure.
“As we move forward with the prospects, we are likely to lose some of them: they did not like our service, they did not require our product, they did not find our price accessible, or at the end they chose the competition,” observed Gonzalez Gasque, CEO of G2 Consultants. “Therefore, the graphic representation of the customers we have at each stage of the process is usually similar to a funnel, which is also called” funnel “sales”
González Gasque explained that although a sales funnel is a complex task, once elaborated and with clear ideas about it, it allows analyzing the evolution of our sales process, seeing the behavior or evolution in each of the phases and the conversion rates from one phase to the other.
In a normal process of customer follow-up, the company starts with contact with the customer and once interest is detected it is defined as a prospect. Then, a qualification process is carried out and, when approving it, it is considered as an opportunity. When the proposal is presented, it is defined as negotiation, and if there are reasons to believe that the opportunity is being determined, the closing status is assigned.
Each company must design its own sales process and define the stages according to their characteristics and needs.
“The important thing is to measure what is happening and what we need to happen. First, what is the conversion rate of our process and what is the conversion rate of each of the stages “explained González. “If we close one out of ten customers, we have a conversion rate of 10%. If half of the prospects who seek us do not qualify, then the conversion rate of the qualification stage is 50%, “he said.
Measure the conversion rates, compare them between the different channels and agents, benchmark against the industry and the competition, allows to focus energies on the weak parts of the process and optimize it.
If, for example, after a presentation you lose many prospects, maybe your presentation is poorly focused, you did not rate the clients you were attending in the first place or you need help to better understand your market and how to approach it.
On the other hand, it is essential to understand that there are enough prospects in the funnel. To close 10 accounts each month, knowing that the conversion rate is 50%, then you need to have 20 prospects active that month. If the sales cycle takes 6 months, then the funnel should have 120 prospects in various stages. That is, if you do not ensure enough opportunities, you will not sell enough, even when optimizing conversion rates.
Managing the sales funnel and understanding how it has behaved, as well as the conversion rates of the process, is essential to have an organization that sells consistently.