With deeper analysis of their sales funnel, managers can determine which stages represent weaknesses in the sales process, where individual reps are struggling to convert, and forecast future quotas and conversions more accurately. Here are some key sales funnel components to consider.
- The shape of the funnel
Maintaining the shape of the sales funnel is one of the most important considerations in having a functional and accurate one. The shape of the funnel has to be widest at the top and narrowest at the bottom, with a distinct drop-off through meaningful conversion points at each stage. A distinct event or change must occur for prospects to go from one stage to the next. With each subsequent stage, prospects are becoming more qualified and thus, are more likely to buy. A funnel that doesn’t maintain a smooth gradient – but instead has dramatic indents and sharp drops, or the narrowest differences at each level – will not provide managers with venues for meaningful analysis.
- Sales Funnel Conversions
At each stage, less qualified prospects drop off. The conversion rates at each stage should therefore reflect this, with a smooth gradient all the way down between stages. With this information, managers can hone in on the specific stages with especially dramatic drop-offs, coaching reps who are losing a great percentage of opportunities at any particular stage. Additionally, managers should always be monitoring their sales funnel over time to note how historical conversion rates have changed. The historical data of the sales funnel can be extremely useful in forecasting future opportunities.
- Time spent in each stage
Your historical sales funnel, when managed properly, lets you forecast future opportunities more accurately. For instance, if, traditionally, deals that end up being closed/won spend 7 days in the trial stage of the sales funnel, an opportunity that has lingered in that stage for 20 days is not likely to close successfully, despite the most optimistic protestations from the responsible rep. Careful monitoring of the time spent by opportunities in each stage will let you know which opportunities are worth spending more time and attention on, as well as how to project for the future.
InsightSquared is the sales reporting and analyzing software you need to take control of your sales funnel. A leaky sales funnel with unfulfilled leads at each stage can result in a great deal of opportunities lost, so make sure that doesn’t happen with InsightSquared.
InsightSquared was like shining a light in a dark room for us.
- Steve Richards, Co-Founder, Vorsight