Every newbie sales rep learns about the funnel: prospects go in one end, and with any luck at all, a sale comes out the other end. But unlike sausage-making, we really do need to know what happens in between, because if we don’t, we might as well attribute those sales to voo-doo, or the stars, or our lucky socks. The funnel is very simple, and we all have one. The labels might change, but the categories are constant, so let me show you what your funnel looks like:
1st Category: Everyone who is currently alive today. You might eliminate some portion of these people depending on your product, so you don’t market female items to men, adult items to children, home-owning items to renters, human items to animals, consumer items to corporations, or anything to people with no money to spend, etc. Use your common sense here, so that you aren’t wasting your marketing dollar.
2nd category: Subset of Category 1 who have indicated in some slight way that they may, at some point in their lifetime, possibly consider looking into the idea of using or purchasing your item. Calibrate your sensors correctly here, again to spare your marketing dollar, because you don’t want to this subset to be too large or too small. Or to have restraining orders filed against you
The next one is tricky: Subset of Category 2 who have voluntarily given you their contact information, AND communicated that he or she would like to see a demonstration, sample, ‘glossy’, or presentation. Why is this tricky? Some people use this tactic as a way to dis-courage you from contacting them further, apparently having traveled here from an alternate universe. So learning to read body language is very important (see above re: restraining orders.)
4th category: This is the subset of those who have seen your product or service in action who ask for pricing on paper or ‘in writing’. This is a strong indication of interest, although if you have direct competition, your quote can often be used to bludgeon better pricing out of the current vendor. So don’t start celebrating too soon.
Finally: Buyers! The smallest category of all! [Except for the category of re-buyers, but that’s a different funnel (The Repeat Business Funnel)].
Why is the funnel important? The briefest answer is this: you need to know your ratios so you know how to organize your activity.
Scenario A: Meredith meets 150 new prospects a week, and delivers 50 quotes a month. She makes 10 new sales a month. She’s very busy.
Scenario B: Meredith meets 50 new prospects a week, and delivers 10 new quotes a month. She makes 10 new sales a month. She’s very effective.
The same number of sales, but the ratio of new prospects, to quotes delivered, to sales won is very different. The specific numbers will tell you where you are finding the prospects who are buying, where you’re finding the non-buyers, what quotes are producing sales and which aren’t, which marketing touches are generating quote requests and which aren’t, and the list goes on. You can’t live without knowing what’s in your funnel , because this is your livelihood, not Pin The Tail On The Donkey!
Meredith Gronroos, owner of VoiceBox Communications, can be reached at www.facebook.com/voice.boxcomm, with questions about the funnel, her delightful sense of humor, or how she can ghost-write your blog, website or sales and marketing materials with that special touch.