November 23, 2014

The 4 Biggest Mistakes in Managing Your Sales Funnel

managing your sales funnel2

Many sales people are familiar with the concept of the “sales funnel,” with the idea that every sale starts with a large pool of prospects. Then they are eventually narrowed down by the various steps of the sales process (qualification, presentations, proposals, etc.) leading to a much smaller number of customers who actually decide to buy and close the deal.

A big part of success in managing your sales leads is developing a better way to understand how you should be managing your sales funnel.

Below are a few of the biggest mistakes that small business leaders tend to make in managing their sales funnels – and ideas on how you can get better results.

Managing Your Sales Funnel Mistake #1:

No Balance Between Lead Generation / Lead Management

Many companies make the mistake of thinking that they can get better sales results just by constantly engaging in lead generation activities to “dump more leads into the funnel.” But lead generation alone is not enough.

You also need to focus on your lead management activities:

  • Ranking
  • Sorting
  • Nurturing
  • Following up on your existing sales leads

You can almost always improve your sales results by doing a better job of managing the sales leads you already have. Instead of constantly hunting for more and more sales leads.

Mistake #2:

Focusing on CRM Technology Instead of Your Sales Process

Many small businesses make the mistake of investing in expensive customer relationship management (CRM) software but without a clear understanding of how they want to use the CRM software to improve their sales process.

CRM technology can be a valuable tool, but it cannot replace a smart strategy for understanding and adjusting your sales activities to line up with your biggest priorities in your sales process.

For example, you as a small business leader, need to understand what is happening at every stage of your sales process. Are you failing to generate enough appointments during your initial contacts with new sales leads? Are your sales appointments failing to result in enough follow-up sales presentations? Where in the sales process are you having the most difficulty, and what can you do differently?

These are the questions that CRM tools can help you answer. But you can’t rely solely on technology to do the hard work of identifying and fixing the problems.

Mistake #3:

Not Getting Proper Sales Training

Sales training is not just for new hires. Small business owners need motivation, coaching and a clear idea of what they’re selling and how to adjust to customers’ changing needs and expectations..

Mistake #4:

Not Measuring Each Stage of Your Sales Funnel

Many organizations focus too much on their final deal closing ratios, and don’t pay enough attention to the conversion ratios that lead up to the final negotiations with the buyer.

Take a look at all stages of your sales process and measure your success rate at each stage. For example, out of 100 sales leads, how many will agree to an initial appointment? How many of those appointments lead to a more extensive sales presentation? Where in your sales process are the biggest successes and the biggest opportunities to improve?

Managing your sales funnel needs to be part of an ongoing effort to see what is happening within your sales process and adjusting along the way.

If you have a clear understanding of where your challenges are coming from, which parts of the process need to improve, and constantly coach your sales team to improve their efforts at each stage of your sales funnel, you will start to see a better result in the most important number of all – sales.

Sales Funnel Photo via Shutterstock

12 Comments ▼

Al Davidson


Al Davidson Al Davidson founded Manage Your Leads in 1989, where he helps deliver B2B lead generation and appointment setting solutions for clients around the world. Under his leadership, the company has generated over 7 million sales leads, resulting in millions of dollars to his clients.

12 Reactions

  1. Al,

    Thanks for the valuable tips! I would like to highlight your Mistake #2. Focusing on software than the process. This is, in fact, a mistake many made for any business operations.

    I am in online business. It’s perhaps embedded in our genes that we always seek for software to help us run our business. Unfortunately, I often fall in love with a particular app then decided to buy that app and THEN decide what I’m going to do with it. When building a website, I was also a bit obsessed in tools, pluging and add-ons – and forgot to focus on my site visitors’ needs and wants.

  2. I agree with #4 here. Too many people don’t measure inside the sales funnel. They are merely contented with looking at sales and conversions. This is wrong. You should meticulously measure everything so that you can make little adjustments. Sometimes, the little adjustments can make a huge difference.

  3. Really useful

  4. Clear. Useful. Thanks
    Gideon Gilda

  5. Al, I love this article because of Mistake #2: Focusing on CRM Technology Instead of Your Sales Process.

    The sales process is the whole point of doing Customer Relationship Management but a lot of CRM software is really nothing more than a glorified contact manager. I deal with many Small Business Owners and the most successful ones really pay attention to the lifecycle of their customer.

    They’ve delevoped a CRM process to manage their Lead Generation, Lead Conversion, Client Fulfillment, Client Satisfaction, Client Retention or Repeat Biz, Referrals and Upsells. Pretty simple if you know what to do. It starts with figuring out your ideal client and then building a CRM process around their needs and your business.

    -Tim Evans – Largest U.S. Publisher of Coffee News,
    The World Largest Restaurant Publication now in 30 Countries and 10 different languages.

  6. I agree. In fact, a lot of young entrepreneurs these days have already taken for granted the very basic thing which is training. We have to consider this as a stepping stone to be successful in our business in the future.

  7. #2 is exactly right and it’s the problem that many companies have. All in all, I don’t blame them too much: CRM companies have been telling them they’ll solve all their problems for a long time now.

    It’s more about how a company builds their strategy and then supercharges and simplifies their strategy using software. CRM isn’t a solution, but a hyperdrive for a solution.

    Brad Hodson
    JobNimbus – http://jobnimbus.com

  8. I agree with #1. This is a very common mistake that businesses tend to make. Getting a huge number of leads but not doing anything more to those leads will not help the business. It’s like filling a cup with water but then not stopping so tendency is for the water to eventually spill.

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