Secret Sales Funnel Habit #1

Posted on January 11, 2011. Filed under: Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Management, Sales pipeline | Tags: , , , |

Top salespeople are well into planning mode now for how to achieve their quotas this year.  One way is to work back from the quota and break down the goals by quarter or month.  This tends to be less overwhelming than looking at the big number for the year.  It’s easier to track your monthly or quarterly progress too.

One problem with sales though is it is a lagging indicator.  You can’t do anything about it once it’s done.  What you need is a leading indicator like TVR.

TVR has nothing to do with recording the shows you missed on TV…TVR is part of the Funnel Principle system that stands for Total Viable Revenue.  It’s the dollar value of all sales opportunities on your funnel that have reached the Commit Funding stage.  TVR is the true value of your funnel and one of the most important leading indicators to manage to.  Intuitively you already know what it means so I’ll review it briefly.

Because you don’t have a 100% win rate, you need to chase more opportunities to win the number of sales needed to achieve quota.  If you have a 50% win rate then you need to have roughly twice as much funnel value in opportunities.  If you have a $1M quota you’d better have $2M on your funnel.

The $2M is your Target TVR.  If you find yourself with a funnel of anything less than $2M when you still have $1M left to close you’re at risk of not achieving quota.  While most sales people understand this, many of them don’t actually manage to it.  If you’re one of these salespeople, stop now.  Start managing to a Target TVR.

When you manage to a Target TVR two positive things happen.  One, you’re constantly aware of the true health of your funnel.  If the real funnel value is more than the Target TVR then your funnel health is adequate.  If the real funnel value is less than the Target TVR then your funnel value is inadequate.  Either way you’re completely aware of funnel value and this knowledge puts you in the driver’s seat.  You can act on this leading information to your advantage.   Second, you’re focused on what you can control – adding value to your funnel.  Nothing’s stopping you from devoting time next week or right now to adding one more Viable Opportunity to your funnel.  On the other hand, controlling the customer’s buying process is not something you can do.

Early in the funnel year your funnel value might be a lot less than the Target TVR.  Don’t be too alarmed by this but let it be the wakeup call you need.  If your TVR for a $1M territory is $400,000 in February I don’t have to tell you what your sales priority is.  Start filling your funnel with TVR!  Every day that goes by where you aren’t adding value to your funnel is a day lost to the TVR crusade.  If you let that go too long into the year you will pay the price in missing your quota.

Managing your funnel to the Target TVR will prevent you from ever being surprised about the likelihood of achieving your quota.  If you know your win rate then you know how big your funnel has to be for that win rate to do its job.


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2 Responses to “Secret Sales Funnel Habit #1”

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[…] Whoo boy there’s a sexy blog title!  Seriously, this week we are covering the Secrets to Success through good sales funnel habits.  Today’s post is Habit #2: Set Monthly Goals and Actions.  To read about Habit #1, click here. […]

[…] Secret Sales Funnel Habit #1 ( […]

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