Sales managers who want to improve and optimize their sales processes can start by examining any number of areas – their sales leads, the daily sales activities of their representatives, and so on. However, for our money, we believe that the best place to look first is the team funnel for sale. Specifically, sales managers should intensively analyze conversion rates between different stages of the sales funnel.
But where do we start even when it comes to analyzing sales funnel conversions?
Start at the top and make your way down
A natural place to start would be at the top of the funnel. From there, you want to handle bids won at the bottom of the funnel by calculating conversion rates between stages.
These conversion rates refer to the percentage of opportunities that your sales team progresses from stage to stage, and so on. Take a look at this example below:
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Of the 1005 opportunities that entered this company’s pipeline at the top of the funnel, 206 were won as bids. This gives a sales manager the overall earning rate of his team – which is great information to know – but what is really interesting to him is what happened between the two stages of the funnel.
Look at the second stage – demo. Of the 1005 opportunities created and worked on by sales representatives, only 704 (70%) reached this second stage. From there, 45%, or 314 opportunities, reached the third stage (Technical Fit). Of the 314 opportunities, only 190 (79%) reached the closing stage.
These are incredibly valuable ideas! Now, the sales manager who performs this sales funnel conversion analysis can determine at what stages the team loses the most opportunities. They can go to work by connecting the leaks that occurred in those specific stages. In this case, it is clear that the Demo stage is the one in which the representatives fight to convert.
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Now that they have this actionable idea, the sales manager can rely on applying it and solving the problem. They can sit down with their rehearsals during demonstrations and look for what they are doing wrong. Maybe they spend too much time promoting features, rather than looking for pain and talking about solutions. Maybe the representatives make off-hand comments that make the potential customer feel uncomfortable.
The key is that with the sales funnel conversion analysis, the sales manager now knows where to look to diagnose the problem. All he has to do now is dig deeper to find it.
Comparing individual rehearsals with the team
The sales funnel conversion analysis doesn’t have to stop here. Instead of looking at the whole team in an overview, the sales manager could also compare the sales channels of the individual rehearsals with other rehearsals or compare them to the sales team averages.
Look at this side-by-side comparison between Josh’s funnel and the company’s funnel. It should be clear here where Josh is struggling, performing considerably worse than the rest of the sales team in several key stages of the sales funnel. Instead of fulfilling the entire team in a single sales coaching session, the sales manager can now design and customize individual sessions that best fit the needs of the sales representative.
Every salt sales manager needs to understand the basics and best practices of sales funnel conversion analysis. If you need more help with sales funnel conversion analysis, check out our FREE sales channel app on the Salesforce Exchange App.
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