There are three specific tools in sales management. They are all crucial and take a high degree of discipline to adhere to, however they will provide a vital insight into sales performance snap shot, short and long-term basis.
The specific tools are the sales forecast, sales funnel and the sales pipeline.
Sales Forecast – a document detailing the prospects that have stated their intention to buy a specific product or service for an agreed price at an agreed time. The bold criteria are very important, if you don’t have one of these criteria then I would question making it an inclusion on your sales forecast.
A sales forecast should be able to forecast sales in advance with some certainty, with the degree of certainty increasing as the time frame shortens.
A sales forecast is not cash in the bank – it should be regarded as a document of record and vital to business planning and cash flow. Lack of accuracy in your sales forecast is dangerous
Sales Funnel – a lead to prospect to sales forecast sales ‘container’ that feeds unqualified leads in to the wide mouth of the funnel, and through a very careful qualification process the leads are either carried through and converted into prospects for inclusion in the sales forecast at the sharp end of the funnel, or are rejected at any point in the funnel due to their lack of suitability.
Sales Pipeline – is a stepped, criteria driven sales qualification process that sits inside the sales funnel. The sales pipeline is standard within an organisation so that all sales people understand what it means if a prospect is at a certain point in the sales funnel.
The Sales Funnel houses a sales pipeline process that feeds into the sales forecast.
Clean Data and Dirty Data
We also need to make the distinction between clean data and dirty data.
Dirty Data is an unqualified lead/enquiry – you will have 100’s or maybe 1000’s of these floating around, maybe from exhibitions, opened eshots, directory listings etc
Clean Data is Dirty Data that has gone through some form of qualification, Clean Data should be in your Sales Funnel as it goes through your Sales Pipeline activity until it lands on your Sales Forecast or it is rejected. Unqualified Dirty Data should be held in a separate file.
A Sales Forecast that is consistently inaccurate needs investigating immediately – an inaccurate sales forecast is a key indicator of other issues that will be definitely costing your business money in lost business opportunities.
A Sales Forecast has to be complete. A Sales Forecast that appears without specifics – client name, price agreed, order date, quantity, delivery date, terms is not a sales forecast. A sales forecast should have a very high degree of certainty. If it doesn’t then this is a likely indicator that the sales process lacks that same degree of certainty.
A Sales Funnel should have a high degree of movement – prospects added and taken out on a very frequent basis (frequency will depend to a degree on the industry, product/service sold, order value etc).
The Sales Funnel is a proactive way of managing prospects, by using the universal criteria laid down in the Sales Pipeline – managers should be keen to look at the age of prospects in the funnel, last contact dates, etc.
Managing the sales pipeline should be the key driver for the sales person and the sales manager as there is a high cost to getting the prospect even half way through the Sales Funnel…too many unqualified prospects in the sales funnel and the worthwhile prospects do not get the attention they deserve, too few prospects in the sales funnel going through the sales pipeline process indicate that the sales person needs to increase their time spend in lead generation and lead nurturing.
Universal Standards set down by the Sales Pipeline Criteria – Sales Teams definitely benefit from having a universal understanding of what a Sales Funnel should do and what the criteria are for moving from one stage in the Sales Funnel to the next.
The danger is to have a very full Sales Funnel. This is extremely dangerous. Too large a Sales Funnel means that some great prospects will be ignored whilst poorer quality prospects may get attention they don’t deserve. The aim of the Sales Funnel is to bring focus to the sales process and the progression of quality prospects and sales opportunities.
Qualification is a key skill in managing the Sales Funnel effectively – using good solid sales questions with the prospects is vital to gain knowledge and information that can be relied upon to present to the rest of the business in the Sales Forecast….ensuring a high level of accuracy, certainty, transparency and accountability.
Sales Managers would find it time well spend to concentrate on all three of these sales tools as they provide a great and solid indicator regarding sales activity levels, sales capability, and skill.
Major caveat here…don’t be fooled by thinking high numbers in the sales funnel mean a bumper time ahead….often means quite the reverse
For more information about how you can get the most out of your Sales Funnel and deliver certainty and accuracy to your Sales Forecast call Carol Griffiths – Lead Consultant and Director at Morton Kyle Limited on 0779 002 1885, or email firstname.lastname@example.org