Systematically manage sales with the sales funnel

While there is software for the "customer relationship" (namely a CRM-system), winning new customers still proves difficult for many companies. It is rare that companies - Apple being the best example - are able to create demand for their offer again and again with new products. Instead, a company has to entice with other means to fill the sales funnel.

Today, process quality is of high relevance for customer acquisition. In particular, it is a matter of competence and quick action that must be communicated to the potential customer. It should be obvious that in this case, sales takes first place in the acquisition of new customers. However, the market research company Gartner Group found out that up to 70 percent of all enquiries are not answered at all or much too late. However, the Costs in marketing for new customer acquisition continuously.

This circumstance is not surprising if the potential customer contacts gained from this are only used to a limited extent. However, in a time when process quality in sales should be writ large, this is more than a cause for concern. After all, the relationship between effort and return in marketing is not easy and success can only be achieved with high strategic discipline.
One of the most frequently used and proven means of increasing sales efficiency and improving the handling of new customer contacts is the "sales funnel". This "sales funnel" system shows the phases of the sales process in the company.
To work with a sales funnel, there are seven phases to go through:

Phase 1: Break down the sales process

In the first phase, the sales process is divided into individual steps. For example, receiving enquiries, sending information, determining requirements, presentation, the offer and subsequent conclusion. The number of steps varies depending on the company and there are no limits. The steps in which the company could lose the prospective new customer are particularly important. Here, a documented system should provide steps to convince and retain the prospective customer. It is better if more steps are defined. In this way, the company can focus more specifically on the "weak" steps and discover and avoid mistakes.

Phase 2: Define the processing times

In the second phase, the time that each step may take is defined. This "target processing time" specifies, for example, when the customer will be contacted once they have received the information documents. However, such fixed times are not exactly popular and reference is often made to the individuality of each order in sales. Without a certain definition of the target processing time, it is difficult to determine best practices or make comparisons. Moreover, time is one of the most important factors by which the customer chooses his purchase. Whoever offers first is often taken. It is therefore necessary to define at least the "desired" - i.e. the "target" - processing time.

Phase 3: Determine the processing quota

The third phase is usually the most difficult for "sales funnel" beginners. Determining a processing quota, i.e. how many interested parties are actually relevant for the next step - i.e. the on-site presentation - is rarely done in sales. In this case, it is often simply a matter of testing. Customer feedback can be very helpful for issues such as response time and reaction behaviour. The sales team should neither act too slowly nor overburden the customer with too much effort.

Phase 4: Determine the (distribution) process costs

The fourth phase consists of determining the process costs of the distribution process. Normally Sales and marketing costs calculated on a cost centre. However, the costs incurred to acquire a customer can hardly be defined in this way. This is why process costs are rarely calculated in sales. However, the "sales funnel" should be able to make a more precise statement about these costs. Defined processes and quantity structures are the basis for this.

Phase 5: Introduce the control system

The fifth phase serves to introduce a control system with so-called early warning indicators. A sales funnel is useful when it controls processes and, above all, detects undesirable developments in good time. Graphical early warning systems are usually used for this purpose. Often, traffic light colours are used to urge the sales department to be cautious at critical points in the sales process.
Green = All areas in which the individual process steps of the sales funnel can be made without specific measures. So, for example, the establishment of contact.
Yellow = All areas where caution is needed such as identifying the needs of the potential client.
Red = critical areas where the potential customer can be lost, e.g. contract template. Here, the potential loss of time and money spent on the contract is particularly high.

Phase 6: Determine the responsible persons and capacities

The sixth phase is devoted entirely to defining areas of responsibility and establishing capacities. Here, the cooperation of Marketing and distribution important. After all, marketing should only generate as many real potential customer enquiries as sales can handle. An employee must have enough capacity to be able to handle the corresponding sales processes - e.g. taking care of new enquiries or presentations, as well as maintaining existing customers. However, the sales employee should also always be sufficiently busy to be able to achieve the sales goals.

Phase 7: Check & fill the sales funnel

The seventh phase serves to examine the sales funnel. This is done primarily within the framework of the question of how many enquiries - taking into account all defined times and quantities - are needed to achieve all sales goals. A calculation should be made to determine which possible scenarios and results of the sales process are possible. In order to always be able to work with correct and current data in the sales funnel, the use of software for controlling is necessary.

On the basis of sales funnels, marketing can now use campaigns and actions in a way that promotes sales but also conserves resources. Sales can adjust to the market at the same time and meet all requests. The insight into the sales process that the sales funnel provides leads to a better process quality, which is an advantage for the customer.

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