14 Sales Funnel Management Red Flags
By Damon Baker
July 10, 2018
Closing a sale is a deceptively straightforward process. The sales funnel helps demystify that process, moving it along more smoothly and efficiently. With its four basic steps of attracting customers, the sales funnel does not just generate an organization’s leads and finalize sales. The sales funnel makes the job of sales management more measurable and much less vague. An efficient sales funnel quantitatively shows what percentage of “suspects” becomes leads, or prospects, finally traveling all the way through the funnel and becoming customers (Mercer 2018).?
Certainly, effective sales and marketing leaders can elaborate on sales fundamentals without so much as batting an eye. This is largely how they have become so effective. Sales and marketing gurus have popped up nearly everywhere, extolling both the necessity and virtues of the sales funnel. But an effective sales department should also beware of the 14 sales funnel management red flags. Recognizing these 14 red flags is essential to transforming your leads into valued customers.
1. The pipeline is filled with potential, not signed business. Many sales managers forget that their funnel is not yet filled with customers, much less leads. Potential customers may exist in sales forecasts, but a sales forecast is not always a reliable predictor of who, what, where, when, and how contracts are signed. Somewhat akin to counting chickens before they have hatched, successful sales managers recognize and avoid this red flag.
2. The business in the pipeline is not evenly distributed but is clumped together at one period. A good sales team knows how to sell. A great sales team knows exactly which point they are in the funnel. Are they devising new targets? Are they closing deals? Gaining new prospects or leads? When the funnel is clumped at any one period, a good manager must adapt quickly. Thus, devoting more resources to that one “clump” is a top priority, ensuring a smoother flow through the funnel. Effective CRM (Customer Relations Management) is the watchword here.
3. You have no idea who the prospects and targets are that constitute potential entries into the pipeline. When a potential market is neglected and left out in the cold, failure to attract new customers is a given. A successful sales team has pre-defined its market, stays the course, and is prepared to effectively utilize its sales funnel to turn potential prospects into actual customers.
4. Every organization in or around the pipeline is an existing client - there are no new prospects represented. Of course, a consistent buyer is a great boon to business. However, you risk stagnation and even decreased revenue when existing clients are your only customers. This is one point in the process where the sales team needs to especially hustle. While existing clients are being served, the opportunity cost is lower and attracting new prospects should be that much easier.
5. Repeat business from current clients is absent from the pipeline. This is a glaring red flag, and should lead to a lot of questions from sales management teams about customer satisfaction, competitor pricing and quality, as well as where sales resources are being prioritized.
6. No referrals appear or make it into the pipeline. If your sales team is devoting its resources to generating a high sales volume without using referrals, they are expecting to meet sales goals by running in place. Referrals are ready-made leads, and should play a key role in the sales funnel. You need to stand back and take a look at your CRM.
7. All business enters the pipeline at the same entrance, for example, two weeks out or three months from now. When sales suffer due to predictable funnel entry, sales management should keep its eyes and ears wide open. The team must ask itself: Where is the redundancy? At what point in our process are we stuck? How can we speed up this process? Where is the distortion in the funnel? With prospects, leads, or customers? Are potential targets showing a lack of interest? Of course, a quantitative analysis should be able to diagnose the problem(s).
8. Pipeline business disappears without warning. Another glaring red flag. A new market must be immediately targeted before your existing customers disappear as well. Sales management teams must make immediate adjustments. Has a new technology disrupted the market? The numbers may not tell the whole story here.
9. There are clumps and gaps instead of a smooth flow. Generally, clumps and gaps indicate too much, or too little allocation of sales resources at any one period in the funnel. You must keep your sales team in the loop.
领英推荐
10. Some pipeline business is contractual, and some is simply probable. Are sales team members trained uniformly? If not, this could explain why some of your business represents customers, whereas other business is simply “probable”. Both groups may be receiving different types of information, at different times. You need to re-examine who is entering the funnel as well, and what their expectations of the company are. Effective CRM is crucial.
11. Projects that do come to fruition are invariably at lower fees than expected. Again, you need to) ensure that all members of the sales department are (excuse the cliché) on the same page. At some period in the process of the sales funnel, prospects and/or leads may be negotiating their contracts independent of management oversight, or even be receiving promotional discounts in exchange for contractual business. You may want to assess whether consistency is lacking in your sales department.
12. The inputs to the pipeline are reduced to just one or two conduits. Every sales funnel should be constantly flowing. When inputs are minimal, sales management teams may become frustrated or even demoralized. Accurate customer tracking will likely indicate what is stopping up the flow. Accurate sales data and sales funnel visuals are extremely helpful in tackling this problem.
13. You don’t physically view your pipeline weekly because you don’t expect any changes. Sales management teams must remember that change is the only constant. This saying is universal, and applies to everything. You must put the microscope on the funnel on a weekly basis in order to keep abreast of even the most minute changes. So-called minutiae have a tendency to amplify their effects over time, becoming serious obstacles to changing readily. Besides, fueling your organization with expectations is the antithesis of reality-based decision-making.
14. You’re getting business that was never in your pipeline (meaning that you aren’t controlling potential very well.) You may want to take a closer look at your target market, and invest some time focusing on what you can offer your ideal customers as well as what kind of value you are offering current customers. Be prepared to revamp your marketing process. Just who are you marketing to and what kinds of methodology are you using (email campaigns, surveys, etc.) to identify your suspects? Answering these questions is crucial to avoiding this red flag and regaining some control over your potential.
In conclusion, Funnel Management is a critical growth tool that allows an organization to identify its revenue targets and gaps, assess and target critical customer segments, and design a diligent, transparent, and measurable sales process standard by which to train, measure, and hold sales teams accountable for revenue contribution.?At Lean Focus, we work with clients to deliver results-oriented Sales Funnel Management processes using a 5 day, Hands-On Boot Camp installation process.
If you like this article, you can read more by following our Lean Focus LLC company page on LinkedIn below...
At Lean Focus, we help businesses overcome their biggest challenges by transforming them for the better, and for the long-term.
? 2019 All Rights Reserved. Do not reproduce this document without written permission from Lean Focus LLC. Damon Baker??(630) 800-8519
References
Mercer.?(2018).?What is a sales funnel??Seriously Simple Marketing. Retrieved from https://seriouslysimplemarketing.com/what-is-a-sales-funnel/?
Business Partner Opportunity ? Futures Trader ? Above Average Returns ? Animal Lover ? Curious? Read On
6 年Damon good article on the what to look out for category.? Being very new to this process, plain marketing as opposed to sales is my newest foray in the world of business.? How does one set up a sales funnel from scratch and what points are essential.? At this stage, if I maybe so bold, I am looking for an outline type of thing as you presented here versus a 300 page book.??