Improving funnel accuracy and forecasting with a Buyer-centric Sales funnel
When the hunt is on for bogies, fighter pilots detect targets from many miles away. Using radar, sensors and long-range cameras, agile tactics are decided upon and a plan of attack is put into motion. Long before we merged into the same airspace with a bogie, the plan for how to best “turn and burn” (dogfight) was in place.
Managing a sales funnel throughout a reporting period is similar. You work with your technology, people and systems to create an accurate forecast, and it all comes to reality on that last day.
I’m writing this post in the middle of September, approaching the end of the quarter when I know an unfortunate spate of tension-filled sales management discussions are being repeated on email trails and conference calls far and wide. “What’s going to close before the end of this quarter?”
The reason so many sales leaders of all levels struggle with this forecasting challenge is that their funnel is a snapshot of a selling process and not their prospective customer’s BUYING process.
To ignore your prospects decision-making and buying process within the sales funnel is folly. And results in unnecessary end-of-reporting period “What’s closing?” anxiety. You’re coming to the merge with too many unknown variables.
Traditional seller-focused funnels have stage names and criteria that sound like: Meeting Scheduled, Demo Completed, Pricing Approved, Proposal Delivered, etc. Tasks your sales folks accomplish, but nothing related to the Buyer’s actions. That’s a Seller-focused sales funnel.
The most damaging and misleading element of these Seller-focused sales processes and funnel stages is that “Proposal Sent” always comes at the end.
Do you still believe that delivering a Contract in a complex B2B sales deal is nearing the end of the process?
Acknowledging the basic functions that Buyers undertake towards a buying decision is the much preferred and more accurate manner to gauge their journey through your sales funnel. (key words: their journey)
A Buyer-focused sales funnel creates value for Sales and Marketing well beyond better forecasting:
- Marketing can see when and where smart content can contribute to moving Buyers through their decision-making process
- Focusing and understanding real Buyer activities and behavior improves the validity of your pipeline, revealing unqualified or stalled opportunities that should be ejected
- Buyer-focused sales funnels lead Reps, Marketing and management to consider the right activities at the right point in the buying journey. Close rates will improve and sales cycles will shorten.
- Defining funnel stages from the Buyer’s perspective will lead to more accurately projected close dates that align with the Buyer’s final approval process
- Ramping up new Reps is easier when they can see and understand the Buyer’s process and adapt their approach to their Buyer’s needs (agile selling)
Despite the fact that many prospective customers have researched solutions well in advance of contacting your company, there are often dozens of decisions, validations, collaborative buy-ins and approvals that take place beyond what you’ve discovered or captured on your Blue Sheet or strategic account plan.
Buyer-focused sales funnel stage names better reflect the Buyer Decision-Making Process. I like several options such as: Discovery, Evaluation, Validation, Approvals, Negotiations, Decision-Won/Lost… all indicative of stages in the Buying journey.
Just as important, stage criteria and timing should define each buyer-focused funnel stage, limiting the amount of subjective stage movement.
Buyer empathy should rule the day when designing your sales funnel stages. Put yourself in your Buyer’s shoes, and consider these and other elements that will influence the process and timing of their decision, and the criteria that define your funnel stages:
- Early qualification stages – Did the buyer request an initial meeting to learn more about your solution or to leverage an opportunity, or were they corralled into it? Did they request follow-up activity, suggest next-steps or specifically schedule a next meeting? Are they really entering into a buying discovery process? How do you know?
- Early Discovery or Evaluation stages – Is the prospect ok with signing an NDA to further the conversation or data exchange? Are they providing the data or additional information needed to scope or consider pricing for their solution? Are additional stakeholders being brought in for follow-on discussions or meetings? Are they meeting commitments for scheduled calls or meetings? Have they asked for a Proposal or Contract? (Note: this doesn’t imply that they are ready to sign. It usually indicates a need to understand ballpark pricing or general terms of a potential agreement.)
- Later Evaluation or Validation stages – How well are you understanding what needs to happen before your prospect makes a decision and signs a contract? RFP? How well do you understand how your solution and any implementation processes will impact their business? Are they willing and able to discuss a contract, implementation, and go-live timeline with you?
- Approval stages – Do you know who/what group has final approval authority? Any issues with a procurement/sourcing department that is or will be involved? Will this expenditure require a CFO or Board approval? Legal approval process? Inside or outside counsel?
Timing – I’ve written previously about criteria for declaring a Deal or Opportunity stalled (Recognizing Funnel Stalls) and I like to have some form of time limits for each stage. There are certainly exceptions, but no firm needs Deals in their funnel that are stalled or dead. Those go back into a nurture or marketing stage.
Understanding your industry’s buyers and their typical decision-making process takes time and sharp customer-facing sales pros that understand the importance of this effort. The goal is to build and maintain a sales funnel that contains opportunities that are valid, positioned in the right stage, with close dates that the entire organization can trust as accurate.
Accurate forecasting for the C-suite and calm sales leadership prior to the end of reporting cycles are hallmarks of sales professionalism. Avoid missed forecasts and end-of-quarter freak-outs.
Just as Top Gun pilots pass a bogie at Mach 1 with a thought-out game plan, use a Buyer-focused sales funnel to win every dogfight and nail your number.
Jack Liles is a Partner at TechCXO, providing on-demand Chief Sales Officer duties to client companies in need of go-to-market plan development, improved sales performance, leadership and structure. Jack is a veteran Naval Officer and recovering F-14 Tomcat flyer. Following his service, Jack earned leadership roles at the ad agency Leo Burnett, Coca-Cola, UPS and at numerous successful (and unsuccessful) start-ups. Jack is a TechStars Corporate Innovation Mentor, and can be reached at email@example.com.