Qualify or Disqualify? That is the question.

Posted on March 16, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales Funnel, Sales Management, Uncategorized | Tags: , , , |

I struck a chord with many of you last week when I blogged about the mindset of ‘qualify’ versus ‘disqualify’.  Therefore I have disqualified a few upcoming blog topics in favor of writing more about this comparison.

In my search I looked for clarity in the definitions of qualify and disqualify.  To qualify is ‘to become eligible to do something’.   To disqualify is ‘to debar from a competition because of an infringement of the rules’.  Unfortunately I don’t find either one to have a clear advantage in putting me in the proper mindset.

I don’t claim to be the first author or consultant to wave the disqualifying flag and I don’t claim to own it.  I went back through about 20 books on selling in my library to understand more credibly who is taking this angle and who is not.  I found the word  ‘qualify’ in about 90% of the books I reviewed.  Some of them had chapters devoted to the topic.  In two books the authors’ called it qualifying but their approach to qualifying suggested more of a disqualifying attitude.  This resonates with me.

For most part sellers have been raised in a ‘qualify’ house.  It could be that taking an explicitly disqualification approach rubs us the wrong way.  Salespeople tend to be hopeful and aggressive.  Disqualifying is skeptical or cautious.  We’re also cursed with the blessing of being stubborn.  We don’t want to think (or admit) that we can’t win that deal and we show our faith by pouring ourselves – and sometimes dragging others with us – into the pursuit.

Particularly determined sellers find it hard to take no for an answer.  They are convinced they can win even the ugliest, smelliest deals that most others would have rejected much earlier in the buying process.  The worst thing to happen is winning one RFP out of 29 you blindly responded to.  Like the once in a generation miracle you now have a victory that’s mounted in the bar of fame that proves that your determination pays off.

Your interpretation of what it means to ‘qualify’ is affected by the manager you work for and your company’s sales culture.  If the sales manager looks at your weak, at risk funnel and has a holy s— moment , he might scream that you’ve got to fill that funnel and fast!   When you do a Funnel Audit a month later and it’s loaded with new opportunities he says wow! That’s what I’m talking about.  But often the truth is that funnel is full of made up, ‘unqualified’ opportunities.

So does any of this really make a difference?  Am I making something out of nothing or is there value in adopting a disqualifying approach?  You tell me.  Take the poll, below.  I’ll continue the topic in the next post.

 

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Stop Qualifying and Start Disqualifying Part 2

Posted on March 2, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Velocity, Uncategorized | Tags: , , |

Recently I wrote a blog on qualifying sales opportunities. I suggested that you take a disqualifying approach to qualification. It makes you more productive.

One of the ways to make a shift to disqualification is to change your view of ‘qualified’ as a binary thing – that is, shifting your thinking from ‘the sales opportunity is qualified or it’s not’ to thinking of it as qualified to degrees.

In our BuyCycle Funnel™ model there are three funnel stages that serve to qualify to opportunity to progressively higher degrees. The first stage is Problem Recognition. The second stage is Define Economic Consequence. The third stage is Commit Funding. How can you use these stages to disqualify more effectively?

In 15 years of sales consulting the most common challenge I have seen facing salespeople is getting to the person who is authorized to make a purchase. This person is the PFA, person with financial authority. Many times salespeople don’t find this person and therefore don’t sell to him or her. They hold the money authority so it’s obviously a big weakness in the seller’s sales strategy.

Sellers often call on stakeholders other than the PFA because they have easier access to these other stakeholders. These other stakeholders could hold a key to getting to the PFA if they are approached right. Taking a disqualifying approach will help you.

After you’ve confirmed that the stakeholder you call on has a problem but no authority to act on it you have to find out if he or she has incentive or motivation to recommend and fight for change in the organization. Any amount of change will require energy, political capital, and credibility. Is it worth it to this stakeholder? A couple of disqualifying questions might look like this:

“I understand this issue is a hassle for you but honestly is it a hassle enough for others to make it a priority now?

“Whoever has to authorize spending money to buy a new solution here, what reasons would this person have to spend political capital and money to do something about this situation now?”

“Can we talk about the culture of change in your company? What are some things that might be used by other stakeholders to say that now is a bad time to change how the organization approaches this part of the business?”

These non-PFA stakeholders can be crucial to your sales strategy. To disqualify you need information and insight. If this stakeholder has incentive to change she might be useful. Find that out more quickly by disqualifying the opportunity.

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Are your sales reps chopping enough wood to survive the winter?

Posted on February 3, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales Metrics, Sales pipeline, Sales Quota, sales training, Sales Velocity | Tags: , , |

(animated stereo) A 19th Century Sod House in ...

Image by Thiophene_Guy via Flickr

Would your reps survive a life on the range in the 1800s?

Several years ago Public Television sponsored a competition called Frontier House.  Several families traded in their comfortable homes and modern day lifestyles for a life in 1880s Montana.  From late spring to fall they lived the frontier experience, Montana style. No modern nothin.

In the competition they had to prove they could survive the winter.  This meant stockpiling food and wood and equipping the home to withstand the snow and cold and elements.  One husband built a complex root cellar, an inventive chicken coop, and a labor-saving water system for irrigation.  Another one built the home from scratch.  They worked night and day with one goal in mind – surviving winter’s fury.

It was critical that the families correctly calculated their needs to get through the winter.  Then they worked back from that to know how to spend their time every day preparing.  If they calculated wrong, or worse just got lazy in their execution their lives would be in jeopardy.

A panel of historical experts judged them on how well they prepared.  Only one family won, but the judges said even they would have barely survived.

So here we are in February and I’m wondering:  What are your salespeople doing today to survive the coming winter?

The coming winter I refer to is this year’s selling season, 2011 for those of you on a calendar fiscal year.   There are several reasons why your salespeople must commit selling time now to building a healthy funnel:

1)     Delayed decisions make for longer sales cycles.  Let’s say your average cycle went from 6 months to 8.  That means your reps have 2 fewer months in the funnel year to find, qualify and win net new sales.  Anything they find after April will now be less likely to close by year’s end, instead of anything they find after June.  The two month loss in sales could be a staggering 16.667% of annual sales.  A territory that does $1.2M a year could lose $200,000 in annual sales for any rep who waits too long to prospect.

2)     Funnels took a beating in the recent economic slowdown. Getting funnels back to a pre- slowdown state can take more effort.  It’s like an athlete coming back from an injury and taking longer for her to regain her pre-injury level of performance, let alone achieve higher performance.

3)     Less low hanging fruit to make up quota deficits. Every salesperson gets his or her share of deals that seem to come from no where.  Maybe it’s a small percentage of the overall sales, but it seems to be even smaller.  No rep admits he relies on that ‘gift’ business but his funnel might tell a different story.

4)     A bunker mentality by customers shrinks the overall size of the opportunity pool. Some companies froze spending to survive, and some haven’t transitioned out of that mode.  Your reps may have to dig deeper and wider to find the same number of opportunities to chase.

So what’s a sales manager to do?

1)     Manage with facts. Don’t simply scream ‘prospect more!’  Help your reps see clearly how big their funnels will have to be to hit this year’s quota.  For example, if close rate is 25%, multiply by 4.  A $2M quota needs an $8M funnel of Viable opportunities.

2)     Help them be more selective in the opportunities they pursue. As they bring opportunities onto the funnel reward the volume of activity but use a filter to spend quality selling time on opportunities that meet high standards for fit.  Nothing improves funnel efficiency like purging the crappy, unreal deals.

3)     Help them target, set, and execute account plans for the best accounts. Now is a great time to invest in the long term account development necessary to penetrate new accounts.  Target a handful of accounts that are a good fit to everything about your company.  Develop a plan for introduction, penetration, and pursuing sales opportunities.

4)     Get into a Funnel Audit routine. There’s no better muscle memory to build than to get on a schedule of diagnosing the funnel and setting action plans.  Try it monthly at first.  Spotty diagnosis is a sure way for execution to suffer.  Don’t let that happen.

5)     Every time a rep closes a sale, remind him to evaluate his funnel condition. A sale is what we want, but it also takes Viable Revenue off the rep’s funnel.  That revenue likely needs to be replenished.  And there’s no better time to do that than after they’ve closed a sale.  They’re feeling good, they can take the rejections, they’ve got energy.  Help them channel that to produce future sales.

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Sales Velocity and the Funnel

Posted on February 2, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales Metrics, Sales pipeline, Sales Quota, sales training, Sales Velocity | Tags: , , , , , , , , , , , , , , |

One of my clients, a director of sales, gave me solicited input in a meeting I was preparing to facilitate for him and his colleagues and the VP of Sales last year.  This was an existing Funnel Principle client looking for ways to leverage the system they installed a few years earlier.  “Let’s make sure we talk about sales velocity”, he said.

“Absolutely”, I replied.  Then I asked, “If you had better or more information about sales velocity for your region funnel how would you use that information to manage better?”

He replied almost before I finished the question.  “I don’t know.  But it seems like I should know more about it.”

Metrics like sales velocity are valuable for many reasons.  Whether your company has a sophisticated system of metrics, or keeps metrics to a bare minimum, or has no metrics at all you all share a common need to make the information you gather meaningful to your troops.   Ultimately, their greatest value is the role they play in changing or reinforcing selling behavior.

Funnel value (we call it TVR, Total Viable Revenue) is probably the most common metric that I hear VPs of Sales say they want to have and provide for their salesforce.  I agree it’s a valuable metric but only if it’s acted upon.  I continue to see a gap in having that information and in driving change.  I see two reasons for this.  One is because the users don’t trust the data on their funnels.  Therefore, the funnel value has little credibility.  Two, there’s a lack of connection between funnel value and actions to run a territory.

TVR is a key leading indicator to the true health of a funnel.  It’s all the sales on the funnel that have reached a critical stage of the customer’s buying process called Commit Funding.  At this stage the customer has committed funding and possibly significant resources to making a change one way or another.

The best way to connect TVR to actions is to inspect the funnel regularly and use the information to plan, organize and execute.  Think ‘lean’ for a second.  If a rep’s TVR is in the red, the action plan has to include ways to get it to green.  These ways are tied to working specific accounts and opportunities at specific sections of the funnel, namely the non TVR sections.  These are the early stage opportunities.  You go there first to find more TVR.

An action plan to find more TVR if that’s what the diagnosis suggests is not a loose, airy, feel-good next step kind of thing.  It’s specific and therefore accountable.

It’s the sales manager’s job to help the seller define this plan and keep her accountable to it.

Ain’t rocket science.  But man it is powerful.

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Taco Tuesdays for Better Sales Funnel Coaching

Posted on January 27, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales Metrics, Sales Quota, sales training, Uncategorized | Tags: , , , |

Our chief want in life is someone who will make us do what we can.   Emerson

Do you dread the question ‘What’s for dinner tonight?’

I’ve got a house full of people who are constantly coming and going.  Me for one (often gone), my wife with her own career, two teenage daughters active in school and athletics, and a son in third grade.  Eating together as a family is hard, but figuring out what to eat is often harder.

Except for Taco Tuesdays.

Someone at my house came up with this brilliant idea to simplify dinner at least one night of the week.  The kids look forward to it.  We plan for it by making sure we don’t run out of ingredients like cheese and hamburger and lettuce.  In a way we’re executing on two important values in our family, eating together and simplifying the process.

Facilitating execution is the third of three key themes for you to get the most from your salespeople.  Depending on who you talk to you’ll likely hear that the lack of sales execution is a major gap in sales effectiveness.  You can relate to this.  Your people often know what to do regarding sales strategies and managing their funnels but they sometimes don’t do what they know they should do.

It’s kind of like that intuition argument.  The salesperson says selling is intuitive to natural born sellers.  Maybe so but I say ‘knowing’ doesn’t guarantee doing, and knowing doesn’t guarantee doing well.

One of the best ways to facilitate sales execution is to have a framework for selling.  Frameworks save you tons of time interpreting what she means and what he means.  Jim Collins devoted an entire book to frameworks for running businesses and you have probably read it (Good To Great).  Frameworks for selling allow you to reinforce a repeatable way of setting strategies and using the funnel.  This has huge value.  You can more easily spot variances in performance.  You can coach more effectively.  For example, if your selling method says you’ve got to discover early the person who has the authority to fund a project and one of your sellers consistently falls short in doing this you know what to focus on with this seller.

Another way to facilitate execution is to have your own version of Taco Tuesdays.  Having a fixed time and date and rhythm of review of deals or inspection of funnels ensures that a regular time for practicing and applying the frameworks for selling will be done.  Funnel inspections (Funnel Audits™) done every month like clockwork facilitates execution throughout the year.  In some ways it’s like going to the golf driving range and practicing.  Show me an accomplished golfer who doesn’t do that.

Facilitating execution is the structure your salespeople need that they’ll never ask for.

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What a Teenage Driver Can Teach You about Coaching

Posted on January 24, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales pipeline, Sales Quota, sales training, Sales Velocity | Tags: , , , , , |

I absolutely believe that people, unless coached, never reach their maximum potential. Bob Nardelli, former CEO Home Depot

So how do sales managers help their salespeople reach their maximum potential?   By channeling your coaching efforts down three different paths:

  • Promoting discovery
  • Challenging assumptions
  • Facilitating execution

Today’s post explores the path of promoting discovery.

I’ll relate this to my world which might be your world too. I have a teenager learning to drive.  In my state the teenager gets her ‘temps’ and has to put in fifty hours behind the wheel with mom and dad.  For each sortie my daughter takes my wife and I flip a coin to see who gets the wingman assignment.

With my daughter driving down the road, I sit in the crow’s nest playing the role of lookout boy.  Things I have been conditioned to process and assess when I’m driving have suddenly been elevated to orange and red threat level – watch out for people crossing the street at this crosswalk! – don’t assume someone won’t blow through that red light! – watch for black ice there it could be slippery!– look through the turn, not at the turn! – get your hands at 10 and 2 on the wheel! – slow down!

I realize she’s probably retaining 8 ½ % of what I say.  At least that’s an improvement over how much she listened before she started driving.

Your salespeople are in a similar, frenetic zone of selling every day.  They’re multitasking like mad,  managing multiple sales and at different stages of the buying process, trying to log everything into CRM, taking care of issues at key accounts, and more.  At this pace they can easily slip from the sales habits they know they should do.

You can help by promoting discovery.  Let’s say you have ten minutes at the end of a call with one of your reps.  Why not pick a sale she’s working on and go through a ten minute drill to make sure she’s on the right track with her strategy?  You could safely begin with the common mistake many salespeople make – selling to too few stakeholders.  Ask her to quickly state all of the stakeholders that she’s aware of.  If she gives you two you’ve probably found a hole right away.  One way to find other stakeholders is to look for bosses and colleagues.  If you sell to a VP of Sales who does that person report to?  It’s possible the VP will need approval.  What’s your plan to sell through the VP in this case?  Is there a VP of national accounts on a similar level?  Why wouldn’t that person participate in the buying process?  Is there a VP of sales in another region that might be looking at the same situation?

Promoting discovery is more effective when you position it as a ‘net’ to catch stuff the busy seller might miss.  Don’t make your conversations penal.

Your seller knows that personal motivations drive decision making big time, but has he thought through what the motivation might be right now for a key stakeholder?   It’s easy to toss out ‘wants a promotion’ or ‘be seen as a leader’ but the real value is not in knowing the information.  It’s in the stakeholder knowing that you know the information.  Does her strategy include a plan for that?

Finally, helping your sellers see the health of the funnel is critical.  The eye opener though is when you break down the tasks that have to be done to achieve even a short term action plan.  Let’s say your seller needs to add $1M of funnel value.  That could take weeks or months if the average sale is $50,000.  In fact, if he added one sale per week at this level it would take 20 weeks to reach $1M.  That’s 4-5 months, which might be too long.

You’re good at promoting discovery I’m sure.  Remind yourself to make time to do it.

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For all the Warrior Sales Managers out there…

Posted on January 21, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales Metrics, Sales pipeline, Sales Quota, sales training, Sales Velocity, Uncategorized | Tags: , , , , , |

This blog entry is for the warriors out there, the sales managers.

The past several blogs from The Funnel Principle have been directed at salespeople and the opportunity that this time of year gives them to review, renew, and refocus on the upcoming sales year.

I’ve suggested they take a little time to learn from the past year and not let the numbers fool them (good or bad).  I’ve suggested they renew or establish good sales funnel habits.

So how do you add value?

You’re their leader.  That’s a big responsibility.   You have to carrot and stick your way through each day with each of your salespeople.  It’s a challenging but potentially very rewarding job.

I’m curious as to where the sales funnel fits into your priorities.  Take a second to complete my poll before reading on.

When it comes to the funnel your leadership is mostly around driving process.   If you’ve been through other change management programs you know that some people will buy into it, some will resist it, some won’t really care one way or the other.  Every program is subject to this kind of response.  Because of this you must be the ultimate salesperson every day in selling your team on the need to embrace the tools and processes to help them succeed.  And for all of these constituents my advice is to find ways to constantly make the funnel relevant.

One of the ways to make the funnel relevant is to use it within the cycle of the year.

At the beginning of the year funnel focus is on building a healthy funnel steadily.  A healthy funnel sets the salesperson up for a successful year and avoids the stress of scrambling to make numbers.  Your messaging this time of year is building good habits.  Since the results sometime lag the effort be sure to encourage  your people to keep up the good work.

At mid year the funnel focus is on how to prepare for the second half push.  If their funnels are healthy you want to focus on advancing and winning the higher percentage deals.  You also don’t want them to stop building a healthy funnel because you never know what surprises could occur.  If the funnel isn’t healthy and there’s still time to reverse that there’s probably a very short window of time available.  You’ll have to be very focused on selecting the right accounts and opportunities to develop and eventually win.  Finally, this is a good time to remind your sales people about the next year.  It’s never too early to be building a healthy funnel for the following year.

In the last couple of months the funnel focus is on winning the few deals that will make their year, and making a hard shift toward next year’s funnel.

Don’t look at this as having to work so hard to convince your people to use the process.  This is your job. And your salespeople deserve to be sold.

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The Missing Link in Opportunity Management

Posted on January 19, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Goals, Sales Management, Sales Metrics, Sales pipeline, Sales Quota, sales training, Sales Velocity | Tags: , , , , , |

If you want your salesforce to be more effective at working sales opportunities through the process, the missing link could be the sales funnel.

Let me say it another way – using the funnel can help your sellers be more effective at qualifying and winning sales opportunities.

Recently I talked with a prospect, the VP of Sales of a successful high tech company.  He said he was using a method of selling from a well known company and wasn’t completely satisfied with the results.  His people were trying hard to follow this method, defining the opportunity, identifying the right people, getting to the decision makers, and learning their needs.  They’re doing ok but he thinks they could do better.

He wanted to know how a funnel could possibly help with opportunity management.   After doing some discovery I told him the funnel, when designed right, is the missing link.

This wasn’t obvious to him and I know it’s not obvious to much of the larger market, including some of you reading this blog.  There’s a clear explanation for this.  But first, why is it the missing link?

Sales pros have always had a mental map in their minds of the steps they need to take to advance and win sales.  Using this to guide their sales efforts for each deal is a great way to stay organized.  Being organized is valuable.

The funnel intuitively sets up a way to organize the steps.  You can easily visualize a deal starting at the top of the funnel, wiggling its way down and popping out the bottom as an order.

The challenge is in knowing what happens in between.  And you’ve got to do something very important with the funnel first.   You’ve got to temporarily set aside your steps for selling and replace them with the customer’s steps for buying.

The steps as a whole are the customer’s buying process.  The buying process is simply how a bunch of people are working together to figure out what to do about a problem or an opportunity for their company.  This is what you’re trying to discover when you sell.  They’re looking for a solution, but first they’re looking to understand the situation better.  And then they want to know if the situation (problem or opportunity) is worth the trouble and expense of fixing.  Then they want to find a solution that best fits their needs.  Then they buy it.  There’s always been this buying process dynamic going on even decades ago when the common sales approaches were much less customer friendly.  Today there are so many choices and so much access to information and opinion that customers have more control over their own buying process.   That’s ok because you don’t need to control things to be successful at selling.

Let’s bring in the selling steps.  The goal of any sales activity is to move the opportunity further toward a sale.  The biggest productivity killer for sellers is doing selling activities that are ill-timed and have little impact on advancing a sale.   For example, doing demos when the wrong people are in the room, spending hours preparing a proposal that will not be read, giving samples that will not be used, and more.  But sellers often do things to stay busy or in the hope that something positive will come out of the activity.

The funnel, when designed right, is the missing link because it serves as the productivity protector, the ideal check and balance system for deciding what selling activity to do next.

When it’s designed right the funnel tells the seller what the customer has committed to and how far along the process the customer is.  It then tells the seller what activities are most appropriate to do for this stage of the customer’s buying process.  For example, if the funnel design says do a demo once the customer tells you enough about the problems or vision of better,  then you’re less likely to do a demo before the customer has committed to sharing information with you.  Or, if the funnel says prepare a proposal after the customer commits to a proposal review with you, you’re more likely to get the customer to commit to a proposal review instead of emailing it and letting the main contact read it on his own.

If this sounds simple and straightforward that’s because it is.  However, I can tell you that over the past 15 years I’ve seen many salespeople, even accomplished ones, that don’t consistently sell this way.

The VP of Sales I talked to was not getting the right performance from his current sales method because it is not linked to the customer buying process.   The method had ideas and concepts that categorize aspects of the sale, things like labeling the players and their motivations and whether or not they’re champions or coaches for you.  This can be helpful.  But these categories are at best a collection of good isolated ideas.  They’re in no way intuitively connected to the buying process.

The funnel, when it’s designed the right way, makes this link and gives the categories a lot more relevance.

Ok, so why isn’t this missing link obvious to more people?  The simple reason is because of the traditional funnel.  You know, the funnel where the stages are defined by seller activity.  It’s been around forever.  It’s a seller centric design.   It’s what most people think of when they hear funnel.

As I said three years ago it’s time to rethink the funnel™.   One deal at a time.  The BuyCycle Funnel™.

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Secret Funnel Habit Number 4: Funnel Audits™

Posted on January 14, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Management, Sales pipeline, sales training | Tags: , , , , , , , |

I have to admit.  It’s going to be hard for me to avoid writing all day about my favorite topic, Funnel Audits.  I’ll do the best I can.  I believe this is the most powerful funnel habit you can have.

The reason I love Audits so much is that they’re proven to be the glue that holds much of the funnel process together.  It takes a good idea and makes it practical and effective for the sales manager and seller.  Novel concept, right?

First, let’s define the Funnel Audit™.  These are the structured inspections of the funnel that are part of the Funnel Principle system.  They’re simple, yet powerful.  They don’t take much time but have a disproportionately large impact on the seller’s results.   In an Audit you’re inspecting one thing – your funnel’s health.  You end the Audit by defining goals and actions for the next 30 days.

Second, let’s review why you should inspect your funnel regularly.  With your funnel changing all the time throughout the year you’ve got to stay on top of the changes and know where you should be committing your priorities and time allocation for opportunities.  Doing this diagnosis and action planning monthly is suitable for 90% of the selling population.  This has a dramatic impact your mission of achieving quota.

Without a rhythm or diagnosis and action planning you’re committing precious selling time and resources based on assumptions.  It would be like setting out on a weekend long hike deep into the woods using your compass only once, at the outset, and never confirming during the hike that you’re still on the right track headed where you want to go.

Now, let’s review what you actually cover in an Audit.  One of the first items is your TVR, or 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.

Because you don’t have a 100% win rate, you need to chase more opportunities than the number you need to win to achieve quota.  If you have a 25% win rate then you need to have roughly four times as much funnel value in opportunities.  If you have a $1M quota you’d better have $4M of TVR.

The $4M is your Target TVR.  If you find yourself with a funnel of anything less than $4M 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 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.  On the other hand, controlling the customer’s buying process is not realistic.

Another part of the Audit is a section we call what’s changed.  Knowing how your funnel has changed is key to knowing how those changes will affect your mission of achieving quota.  Changes are also a great way to link cause and effect of selling actions – knowing if some selling action is paying off or not is obviously good to know.    Since it’s common to see funnels that need more TVR you’ll want to monitor each month how much new TVR is being added.  This helps you know early on if you’re on track to achieving your Target TVR or not.

Finally, the Audit ends with an action plan.  Without it, the dialogue and diagnosis is like ending a wine tour without taking a sip.  Yeah, that doesn’t work for me either.  The actions hold you accountable and help you measure your progress.  At the beginning of the next Audit you start with the actions from the previous one and proceed from there.

I’m proud of myself.  Only a page and a half dedicated to the most powerful part of the funnel system.

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Habit #3: Use Your Sales Funnel to Drive Deal Reviews

Posted on January 13, 2011. Filed under: Funnel Audits, Lead Generation, Pipeline Measurement, Sales, Sales forecasting, Sales Funnel, Sales Management, Sales pipeline, sales training | Tags: , , , , |

Secret Funnel Habit Number 3: Use Your Funnel to Drive Deal Reviews

When your sales funnel is designed correctly, it’s a great tool to set strategies for qualifying and winning sales deals.

Correctly designed funnels have stages that map to the customer’s buying process.  What constitutes a correctly designed funnel is a topic all by itself.  I’ll avoid that to stay on point – let’s reinforce the good funnel habit of using your funnel for deal reviews.  Let me define a deal review and how the funnel can help you do them effectively.

A deal review is a structured conversation about a sale you’re working on.  A review is different from a passing, casual deal update.  Those probably happen all the time either with you as the sales manager coaching them or as you the salesperson leading the review.  Nothing wrong with casual updates, but they don’t yield the same value as a review.

In a review you want to cover key issues and update your strategy as a result of what you’ve discussed.  The issues you want to know about usually have to do with the players or stakeholders, your advocates or coaches, competitors and alternatives, and the fit of your solution to the problem.

The key to making these conversations productive is to follow a repeatable agenda for each conversation and to put a limit on the time for the conversation.  I recommend you get in, get out and get going in 30 minutes or less if possible.

Try this for your next review:

  • What stage of the buying process is this deal at?  What tangible evidence do we have that proves it’s there?
  • Is this any different from the last time we reviewed the deal?  Regardless, why isn’t it different (eg why hasn’t it moved stages, or why did it move stages)
  • What’s changed about the way the customer is buying, if anything?
  • Are the key stakeholders still participating the way we know them to be participating?
  • Are there any new key stakeholders participating?  What role are they playing?
  • What key missing information is there about about stakeholders, the buying process, or competitors that could create trouble for us?
  • When we evaluate the effectiveness of our champions and advocates, what is it that we most need them to help us with?
  • What’s the next commitment the customer must make to advance the purchase and which stakeholders will be responsible for making that happen or delaying it?
  • What commitment of selling resources seems most appropriate for us to make right now?

The benefits of using your funnel to drive this dialogue are several.  One, it keeps the dialogue focused on the customer buying process.  Two, it highlights key stakeholders who will likely have most influence on the purchase.  Three, it forces you to challenge assumptions, the constant nemesis of setting good strategy.  Four, it seeks to identify customer commitment as the next step.  And five, it ends with you identifying your commitment moving forward.

Granted, some deals deserve longer, more detailed conversations.  Fine.  Make those the exception not the rule.

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