Customizing the Opportunity Sales Funnel Process for your business

“What if you could build a process, where opportunities went in the top, the machine is cranked, and money pours out the bottom?”

Of course, I’m talking about the Opportunity Sales Funnel Process, which brings together the unique selling processes of your business with opportunity pipeline management. Developing and executing a strong sales funnel is a critical tool for both sellers and sales leaders to win more business!

Too many companies attempt to drive growth by buying a CRM Program and then hope it fits their sales process. This is backward and results in a less than optimized selling process and limited new sales growth. This article outlines and encourages sales leaders and company executives to define their sales process and opportunity sales funnel first and then incorporate it into a CRM tool that supports your sales team’s success. The primary focus will be to provide examples and guidelines on how to develop a customized sales & opportunity sales funnel process for your business.

“Selling is a process!”

A process is defined as; “A series of actions that produce something or lead to a particular end result” (re. Merriam Webster)

All processes can be improved and optimized to reduce wasted time and resources to drive higher efficiencies, productivity, and results. Defining, mapping, and finetuning your selling process, will result in increased efficiencies and more new sales.

Below is an overview of a traditional sales process. It has several steps, which can be designed to meet a unique market’s needs. It can be taught to sellers how to sell a product and/or service to their potential customers. Over time sellers will learn to optimize the sales process to become more efficient in closing new business at a faster velocity.

Building a version of this process for your business and market is the starting point to building an opportunity sales funnel process.

Step 1:?????Is getting your foot in the door with a customer willing to consider your solution, from which trust and relationships can be built to lay the foundation to do business. These relationships need to be developed high, wide, and deep within customer organizations and their partners (ie. Engineering Firms), with all the decision-makers and influencers. Remember “People” still conduct business and they will only work with other people/companies they like and trust. (In-person or virtual)

Step 2:?????It is critical to develop a strong questioning plan using a technique like SPIN Selling, to support the development of the best and most competitive solutions. This allows you to fully understand the customer’s needs, problems, issues, and benefits from buying a new solution before it is developed.

Step 3:?????Once the needs are fully understood, the seller jointly works with the customer to develop a solution to build commitment across their customer’s organization. The seller will also work with the customer to align on the value of the solution, which includes clearly defining the quantified benefits for the customer.

Step 4:?????Formally recommending a solution and asking for their business; Overcoming objections; and Closing the deal.

Step 5:?????Winning and securing the business with the first order(s) and continuing to work with the customer to expand and grow additional new business.

Ultimately "Selling is a Numbers Game!"

In simple terms, it is the value of opportunities times a closure rate, which results in new sales. Increasing either or both components increases sales. There are many ways to increase both, which we’ll save for another discussion. At a high level they include:

• Increasing Opportunities: Leads & Qualification Process; Marketing; Increased customer touches; Expansion of existing business; Cold calling; Specifications, Net Promoters …
• Increasing Closure Rates: Coaching & Support, Improved Value Proposition; Training; Marketing/Selling Tools, Better Prioritizing Opportunities; Stronger Sellers …

Building and working the opportunity sales funnel will help the sellers and sales leaders better manage multiple opportunities. It will also help them learn from their experiences, to increase closure rates and sales wins. Thus, improving their sales process efficiencies. Additionally, it will make it easier to forecast and communicate the size and timing of new deals throughout their organization.

Building and Executing the Opportunity Sales Funnel Process

So how do you build an “Opportunity Sales Funnel Process” that is designed for your unique market and business needs?

Start by defining and mapping the sales funnel process, which is often referred to as an opportunity pipeline. Laying out the process on paper to define the steps and common language allows your team to stay aligned and manage expectations on where each opportunity is in the sales process. It also supports collaboration to prioritize and better allocate internal resources to win more new business.

A pipeline concept depicts everything flowing through it without opportunities leaking or going away. In the real selling world, everyone knows that we will never close 100% of all new opportunities. Many fall out over time due to changes in customer needs, funding, alternative solutions, competitive activity/relationships, or our inability to develop a competitive solution.

A sales funnel is designed to take these dynamic factors into account, with the understanding that you must start with many irons in the fire (qualified opportunities) and expect/plan that you will only win and close a certain percentage (ie. 15-20%). A healthy sales funnel will be shaped with more opportunities in the top stages and narrow, as you approach the winning new business stage. It is important to always have a strong sales funnel pipeline, to keep the process flowing.

In addition to developing information about each opportunity, we will capture and update the following key elements throughout the opportunity sales funnel process as the core Key Performance Indicators (KPI’s).

1. Estimated Value of the Opportunity ($) – What is the new sales potential?
2. Estimated Close Date – When could we see first orders? (forecast)
3. Estimated Probability% of Winning – What is the Confidence level we will Win this opportunity?

Expect these elements to continually change over time as more information is developed while working the funnel. Capturing the most current numbers allows us to manage, align and communicate the value of our sales funnel, the estimated forecast of new business and your seller’s confidence level as the probability% of winning the opportunity.

Designing our Opportunity Sales Funnel

We start designing our sales funnels, by defining the different stages of the unique sales processes for your business. The example in this article uses 5 stages plus a Lost Business Stage.?Your funnel may have fewer or more stages to capture your business or market’s unique selling process. Best practices have shown that fewer and simpler is better.

Each Stage of your sales funnel should define two (2) criteria:

1. What step(s) of the sales process is going on in the stage?
2. What are the specific tasks that need to be completed, before moving an opportunity to the next stage?

You should name each stage of your opportunity sales funnel to help everyone understand where an opportunity is within the process. In this example, I have used the following definitions:

Stage 1:??Is called the Universe, because it is the start of the sales funnel process. Like the universe, it is expansive and has lots of pre-qualified opportunities. Some of these will never move out of this stage and should be removed when they are no longer real opportunities. (Doing this keeps your funnel clean.) The main sales process in this stage is Opportunity Identification and Development. At this early point in the process, we expect the opportunity to have a low probability of closing (ie. 0%-10%) and will take a longer time to close. (ie: 1-2 years)

Stage 2:? Is called the Top, because the opportunity is fully qualified, you understand the customer’s requirements and it is starting to move. The sales process in this stage is Value Solution Development. At this point, the probability of closing starts to increase (ie. 11%-25%) and the expected timing has shortened. (ie. 6-12 months)

Stage 3:??Is called the Middle, because you are approaching the mid-point of your selling process. The sales process step at this stage is Positioning to Win the opportunity. By the time you get to this point the expectations for the probability of closing go up again (ie. 26%-90%) and the timing to win is shorter (ie. 3-6 months)

Stage 4:??Is called the Best Few, because these are your highest priority opportunities, with the highest probability of Winning (ie. 91-99%) in the shortest time (ie. Next 30-60 days). The sales process is getting Customer Commitment to Buy.

Stage 5:??Is Winning the business and realizing actual new sales! Opportunity Won

Stage 0:??Captures Lost Business. These are opportunities that fall out of the sales funnel at any stage. Tracking these allows us to learn why we lost the business, so we can develop better solutions or processes to win in the future and increase our closure rates%.

Opportunities that are no longer viable, should be moved to this stage on an ongoing basis to keep your sales funnel as clean as possible. This helps sellers to focus on the best real and highest probability of winning opportunities.

Note:?Each business or market will have different selling steps, expected ranges for the probability of closing, and expected timing to win for each stage. You should establish these ranges for your specific business sales process.

Some businesses may sell into multiple markets, which have different sales cycles and sales processes. If this is the case for your business, recommend trying to establish the same names for your stages, but create different sales funnel parameters for steps, probability of closing, and timing to win. (ie. An ongoing component or material sales process is different from a design-bid-build process) Doing this helps establish consistency within your selling methodology.

Developing Specific Tasks by Stage

Once the Stages are set, you will define the critical tasks that must occur in each stage before moving the opportunity to the next stage. (Remember, these tasks will be different for each market and may require you to develop multiple sales funnel templates for each market’s sales process.)

It is important to align the sales team on the sequence of tasks that need to be completed, so the sellers do Not waste time or efficiencies by skipping around. (See the examples below)

Examples:

• You would NOT want to waste a lot of effort on an opportunity unless there is money and an expected timing to start new business.
• You would NOT want to send a sample or recommend a solution until you clearly understand the customer’s needs. Doing this out of sequence often results is the wrong sample or solution being recommended, which wastes time and reduces the probability% of Winning.
• You would NOT waste a lot of time trying to close an opportunity if the customer didn’t or couldn’t pay their bills.
• Ideally, you would like to have the customer set up and approved in your internal system and be ready to supply before the 1st order is received.

You should work closely with your sellers to develop and fine-tune the critical tasks in each stage of your sales funnel process. Doing this supports making sure everyone is aligned with your business selling processes' best practices. Be aware, this takes some upfront hard work, but has high returns on investment (ROI), because it will help everyone better utilize, accept, and own their opportunity sales funnel process.

Stage 1 Example: Opportunity Identification & Development

• Is this a real opportunity? Does the customer have money and a timeline to potentially buy our products/service?
• Who are the key decision-makers, influencers, and potential detractors regarding the decision to buy our products/services? What are their needs? How will we build relationships and trust with everyone involved?
• Develop and complete an in-depth written questioning plan. (ie. SPIN Selling)
• Estimate the new sales volume and timing to receive the first order.
• Confirm that the customer has good credit and can pay their bills, to avoid wasting a lot of time. (ie. No payment = No commission)?

Stage 2 Example: “Value Solution Development”

• Confirm and fine tune the needs & specifications you have identified in stage 1 with the customer in writing. Special attention should be placed on specification requirements, budget, and warranty needs (Validates the targeted customer needs)
• Identify potential competitive and/or alternative solutions and develop a SWOT (Strength, Weaknesses, Opportunities & Threats) analysis vs your solution to help prepare to position you to win.
• Work with the customer to figure out and align on how to differentiate your solution from the competition. This helps build their confidence that they should buy your solution and have made a good decision when they do.
• Develop a written working draft of the solution with your customer, which includes all quantified objective and subjective benefits. (ie. Price will go up 10%, but the customer will realize an additional $1MM of margin = Net Win?)
• Run a product demo and/or testing to formally get your product approved at the customer. Some industries may require successful case studies, customer testimonials, and field trips to see installed solutions.
• Move on to Stage 3 when the solution is fully approved and in the customer’s specification or on the RFQ approved list.

Stage 3 Example: “Position to Win”

• Develop and deliver a formal written proposal to ask for the business.?This will include summarizing the total $value to the customer. (Value Proposition)
• Identify and overcome objections from each stakeholder.?If necessary, go back to stage 2 to fine-tune the solution and benefits to the customer.
• Close the business and get a commitment from the customer to buy your solution.
• Align on estimated timing, Terms & Conditions of Sale (T&C’s), and specific steps that will take place to ship the 1st order. (ie. Establish lead times, rolling 12-month forecasts, use up competitive materials …)

Stage 4 Example: “Customer Commitment to Buy”

• New Business is formally awarded.
• Develop an estimate of the first order date and a future forecast of demand. (ie. Next 3 to 12 months)
• Alignment with the customer on any additional specific requirements not covered in the specification. (Up-sell additional products or services if possible)
• Schedule and conduct training or logistics/site planning to be ready for 1st order.
• Make sure your company is set up internally to receive and ship the first order.

Stage 5 Example: “Opportunity Won”

• Everyone is ready and the customer places the first order.
• Material and Services are shipped/provided when, where, and how ordered.
• Sales and/or technical service is on-site to provide support if needed to assure success.
• IF the competition tries any last-minute efforts to overcome their loss, help assure the customer that they made the right decision. (Avoid Buyer’s remorse)
• Receive 2nd and/or ongoing orders

When all of Stages 1 to 5 are complete, recognize the opportunity as Won!

Stage O Example: “LOST”

When an opportunity falls out of the sales funnel at any stage, the opportunity moves to Lost Stage 0.

• Confirm with the customer that this opportunity is no longer available, and not just delayed. All Efforts Stop on this opportunity! We focus on other opportunities
• Ask and confirm why this opportunity was lost.
• Capture reasons for the loss. (ie. Price, Performance, Service, Relationship or Other)
• Review reasons for the lost opportunity to learn why we lost the business, so we can develop better solutions or processes to win in the future.
• Keep your opportunity sales funnel clean, by moving no longer viable opportunities to this stage on an ongoing basis.

Summary

Once the Sales Process and Opportunity Sales Funnel Process are defined, documented, and “Understood & Accepted” by all stakeholders, you are ready to incorporate it into your CRM tool. Recommend starting off with a simple basic process and then adding on more functionality as your team learns how to successfully utilize this tool. (Keep it Simple)

While not covered in this article, the next steps are to develop a strong opportunity sales funnel management process for both your sellers and sales leadership. This will include developing key helpful metrics, dashboards, and reporting, to manage opportunities in each seller’s territory. These will be reviewed and worked on an ongoing basis. The sellers will review daily and the manager 1-2 times per month. Building this rhythm helps the sellers prioritize their efforts, obtain support from the business and “Win” more sales to maximize their bonuses.

Sales leadership should use the opportunity sales funnel process as a sales management tool to help their sellers be more successful. This should include ongoing one on one monthly “Sales Funnel Reviews” with each seller. Leadership’s role is to utilize the common language and processes to better coach and support moving opportunities forward faster. These opportunity sales funnel reviews will also help improve prioritization of internal resources, forecasting, and communications throughout the company to maintain alignment of expectations.

Please invest the time upfront defining and mapping your sales processes and building your sales funnel(s) with your sales team’s buy-in. Building these customized processes to support the sales team’s success will be hard work, but it will pay off and result in more new sales wins.

Build the Process!?

Crank the Selling Machine!?

Watch the Money pour out the bottom of the Funnel!