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Creating an efficient sales funnel and keeping it accurate is one of the primary goals of any business. A funnel full of invalid data will result in lower sales, lower revenue, and a host of difficulties for the company. In this article, entrepreneur Bhawna Patkar discusses five common sales funnel issues and how to resolve them.
1. Tracking the wrong information
Most sales funnels track information from the wrong perspective. Because sales professionals, not buyers, design sales processes, sales funnels often measure the incorrect information. Sales leaders want to track their methods, or the steps and sequence they believe will most likely lead to a purchasing decision.
These sales process-driven funnels can create an inaccurate picture because they measure what the salesperson or team is doing, not where the buyer is along the decision process.
2. Confusing probability estimate
If a salesperson reports that a prospect is 80% certain to make a purchase, what does that mean? It may mean something different to the salesperson than to the sales manager.
To the salesperson, an 80% probability may mean that if the prospect makes a purchase, it will most likely be from them. That doesn't account for the fact that the prospect may decide not to make a purchase, at least not now.
A manager may take the same 80% probability and report that there is only a 20% chance that the company will not close this deal. Your sales funnel must clearly define what a probability of closure estimate means.
3. Lack of verification
Optimism is one of the hallmarks of a great salesperson. That cheery outlook can, on occasion, lead salespeople to misrepresent the realistic chances that a deal may close. They're not being deceptive; they just naturally focus on the best outcomes.
Sales funnels, to be accurate, should be verified by a manager or team leader to ensure that probability estimates are not unrealistic.
4. Too much deadwood
Unless your sales funnel has built-in functionality to archive proposals that have become stale, you are probably not looking at accurate numbers. Each sales process is different, but prospective deals that have lingered too long in one stage generally have a lower probability than salespeople are willing to admit.
5. Poor shape analysis
The purpose of a sales funnel is to give management an accurate indication of what future sales will be. The information indicated by the funnel affects everything from materials ordering to staffing levels.
The shape of the funnel indicates the relationship between each of the measured stages. Understanding the desired shape is crucial to how a business can use the funnel to make decisions.
Your income projections must accurately reflect the shape of your funnel. A funnel that is wide at the top may look great because it indicates that the sales team is uncovering lots of new opportunities, for example. But, a narrow bottom under a wide top suggests you have problems closing sales.
6. Conclusion
A well-designed sales funnel is an essential tool for many businesses. It is critical that business leaders continuously track the accuracy of the funnel by comparing its predictions against actual revenue. If the funnel is misrepresenting opportunities anywhere along the sales process, the misinformation provided can lead to serious business mistakes.
About Bhawna Patkar
Bhawna Patkar is an entrepreneur and business leader with over a decade of experience launching and developing new business ventures in Silicon Valley. She is the founder, president, and CEO of Ziphawk Inc. — a technology service provider for the rideshare industry. Bhawna's creativity, drive, and knack for problem-solving allow her to solve challenges in both her professional and personal life. Her success aside, Bhawna's mission has always remained the same: "If businesses believe that doing good can be profitable, then doing good will be sustainable."
