The Front End to a Viable Sales Funnel

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The key to a healthy, viable sales funnel begins at Teleprospecting. Determine the number of Marketing Qualified Leads for each Teleprospecting team (I recommend at least 150 leads per person). Then, verify their access to these leads.  Lastly, apply the Teleprospecting Best Practices recommend in my blogs.

Be sure to keep these 6 points in mind, as you establish and expand your teleprospecting team.

  1. The Sales Funnel is King! Instill collaboration between Sales & Marketing to ensure a quality sales funnel. These departments must develop and agree on qualification criteria and other key metrics, to ensure consistent sales funnel growth. Revenue growth will cease without quality Sales Qualified Leads (SQL) and a healthy Sales Funnel.
  1. Hire experienced staff. The Teleprospecting team is most often the first contact a prospect will contact, within a company. Therefore, it is counter-productive to assign entry-level employees to these positions. They lack experience in selling complex solutions and communicating with senior-level executives. With a history of nearly 30 years, experienced professionals are readily available to hire. This is one decision your company will not regret.
  1. Focus Teleprospectors on one Solution. Efficiency begins to decrease as telemarketing teams become responsible to sell & learn multiple products or solutions, especially if they are complex. Focus delivers a quality sales funnel.
  1. Develop and implement Kay Performance Indicators (KPIs), or metrics, to manage a team. Once the KPIs have been established, assign each team to create a plan that outlines a process to reach their goals. This empowers team members to carry out each task and take responsibility to meet their objectives. Managers may work alongside the Teleprospecting teams to ensure the practicality of these plans. These plans also provide a blueprint to manage activities and measure results, for the Manager, as well as the Teleprospector. (See my blog for details here).
  1. Develop a Teleprospecting Playbook. A Teleprospecting Playbook is a set of tools that guide Teleprospectors through the qualification process for Complex Solutions. This playbook must be written and assembled by individuals with sufficient knowledge, such as expert from Product Marketing or Sales.
  1. Build compensation plans that drive desired behavior. A satisfying compensation plan motivates Teleprospectors to excel at their duties. Create compensation plans that focus on the Sales Funnel and generate revenue growth.

These 6 points will allow you to create a strong front-end for your sales funnel. By applying these best practices, your team will produce a healthy, robust sales funnel, providing for an increase in revenue growth.

 

Alicia Assefa has been managing Teleprospecting and Inside Sales teams for the past 15 years. She is the author of the bestselling eBook “Teleprospecting for Executives Who Sell Complex Solutions”, which is available on Amazon here.

6 Steps to Streamline Your Sales Funnel Process

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The Issue with Funnel Bloat

Many of the sales managers I have worked with at over 100 technology companies believed that having more deals in the sales funnel translated to a greater likelihood of hitting their sales goals. While they looked at the size of the sales funnel (revenue potential), they forgot to consider when the deals were put on the sales funnel. They also neglected to determine if the deals were really viable.

In general, the rule of thumb is that sales funnels should be about 3X-6X the revenue objective to ensure that revenue targets are met. Most of my clients showed me sales funnels that exceeded this range. At first glance, I thought that the Sales Managers were doing well at managing sales funnel growth, but as I browsed further, I discovered that 80-90% of the deals were over 2 years old and not viable. Week after week, these Sales Managers would review the deals, and week after week their Reps convinced them that the older deals would close at some point in the future.

The next issue that I uncovered with my clients’ sales funnels was the viability of the newer deals being added to the funnel. After the initial call, Sales Reps should be validating the quality of the lead. Questions to determine viability can vary: Has a decision maker been contacted? Is there real need and pain established? Is the prospect looking at solutions to solve these problems within a reasonable time period? Did the prospect indicate some interest but didn’t have a real need?

One of my clients believed that every prospecting onsite meeting was a true indicator that the prospect was interested in the solution. The Sales Manager required that a quote/contract be left with the prospect after every meeting. When I worked with my client, I found that the Sales Reps did a good job of “showing” the solution. However, they were ineffective at qualifying for need, interest, decision process, and timeframe. This client’s prospects were in the State and Local Government space, where prospects are more willing to meet and see presentations. My client had hundreds of deals on the sales funnel; however, he never hit his sales targets.

Finally, the last issue that I uncovered was movement of deals from the top of the funnel to the “closed” or “closed-lost” stage.  Many deals were stalled in the various stages of the funnel prior to “closed” or “closed-lost” for many months or even years.

These funnel symptoms created a false impression that the client’s sales funnels were healthy and viable. These issues arise when a Sales Manager lacks a good sales methodology or has not made sure that their Reps understand the methodology. In any case, all three symptoms kept my clients from hitting their targets.

6 Steps to Cure the Sales Funnel Bloat

Even though Funnel Bloat can be deadly to a sales team’s ability to hit targets, it can, fortunately, be cured. Follow these 6 steps to continue finding leads and ensure that you don’t fall victim to Funnel Bloat:

STEP 1: Develop a sales methodology that works for your company.

Determine the following:

  • Who are your targets?
  • What pain does your solution solve?
  • What is an average time frame in which most deals should close?

STEP 2: Once you know these elements, figure out the number of stages most of your deals go through. Is the number of stages 5 or more? During each stage, decide what triggers must happen before the deals move to the next stage.

STEP 3: Retrain your team on the new sales methodology and make sure that they understand it.

STEP 4: Take a fine-toothed comb to your current funnel. Any deal that is older than your required time frame, whether that is 3-months, 9-months or 18-months on average, should be removed and re-qualified or put into a nurture program.

STEP 5: Build Sales Engagement tools that support the movement of each deal through the sales funnel.  For example, build an ROI calculator which is easy to use and shows cost savings or build a “standard” demo that can be used by your team in a middle stage to keep prospects interested.

In the final stage, before close, send your prospect a Memorandum of Understanding. The MOU should outline an overview of the prospect’s needs/pains, how your solution can solve their problem, the outlined ROI, and the agreed price. The MOU should also include a date for when the prospect will finalize and legally sign documents and procure the product.

STEP 6: Be ruthless with any deal that is added to the funnel. Your Reps should have to justify why a deal should be added based upon your company’s sales methodology. One of my Sales VP’s used to say, “Get the bad news early.” If there isn’t really pain or necessity, then you don’t really have a deal.

After the cure has been applied, though painful, you will have a viable sales funnel. Once you have a viable sales funnel, you will probably need to ramp up your marketing efforts to get the sales funnel to a level of 3x-6x your revenue objective. Funnel bloat is deadly, so apply the cure and hit your revenue targets.

Teleprospecting Best Practices for Complex Solutions

For the most part, my experience has been in the design and implementation of Teleprospecting organizations for companies that sell complex technology solutions. During my years as a consultant and employee, I have developed a set of Best Practices that enable Teleprospecting teams to successfully drive Sales Funnel growth. Essentially, there are 6 Teleprospecting Best Practices that I have found to be the most effective:

  1. Marketing and Sales should be focused on the Sales Funnel. The Sales Funnel is King! Marketing and Sales should both be responsible for building a quality Sales Funnel. These two departments need to work together and agree on the lead qualification criteria and other key metrics that will ensure that a quality Sales Funnel is being built and is consistently growing. Both teams should be responsible for the quality of sales qualified leads (SQLs) since they are the source of a healthy Sales Funnel that produces revenue growth. Therefore, the implementation of a process for tracking the quality of SQLs is a key factor to the growth of the Sales Funnel.
  1. Hire experienced staff. In most cases, the Teleprospecting team is the first contact that prospects will have with your company. It is therefore counter-intuitive to put your most junior people on the front lines. They have neither the experience to navigate the complexities of a complex solution nor the ability to speak with Senior Level Executives. Furthermore, since Teleprospecting has been around for nearly 30 years, “Seniors” are readily available. Hire experienced people and you won’t regret it.
  1. Focus Teleprospectors on one solution. You can’t expect your teams, Juniors or Seniors, to be effective if they have to learn and sell multiple Complex Solutions.  From my experience, Teleprospectors are more successful when they are focused on qualifying for a specific solution. If your company sells multiple solutions, divvy out responsibilities and focus each person on a specific solution. This focus enables team members to become experts at qualifying for the specific solution and will result in better leads for your sales teams.
  1. Develop and implement Key Performance Indicators (KPIs), or metrics, to manage your team. Effective KPIs can include metrics such as:
  • Total Key Conversations with prospects who can move the sales process forward
  • Size of the Teleprospecting Funnel, which should be at least 3X your monthly SQL quota
  • Achievement of the monthly SQL quota

Effective KPIs are the metrics that directly impact your ability to meet your stated objectives. Total daily dials are important because dials lead to conversations. Key Conversations are more important than dials, because they help to generate the Teleprospectors’ Funnel growth. Know your KPIs and weigh them based on priority of importance (Key Conversations are more important than Dials). Once the KPIs are established, have the team build plans, outlining how they will achieve their assigned objectives.

  1. Develop a Teleprospecting Playbook. A Teleprospecting Playbook is a set of tools that Teleprospectors will use to guide them through the complexities of qualifying for prospect need and interest. The playbook should be written and assembled by people with sufficient knowledge, such as experts from Product Marketing, Marketing, and Sales. It will serve as a consistent source for your Teleprospectors to maintain professionalism while also increasing efficiency.
  1. Build compensation plans that drive desired behavior. Good compensation plans motivate Teleprospectors to excel at their jobs. The role of Teleprospecting is to generate leads that build the Sales Funnel. A good plan will compensate Teleprospectors for meeting a pre-established “approved” lead quota, as well as provide compensation for leads that go into the Sales Funnel. While Teleprospectors aren’t responsible for closing deals, they are responsible for generating quality leads that build a Sales Funnel. Deals that close generate revenue and these deals come from quality leads, therefore Teleprospectors should receive some compensation for their leads that close. When Teleprospectors are paid for the process from the beginning (leads) to the end (closed deals), the quality of leads becomes very important and motivates them to consistently generate viable leads.

Companies that have asked me to turn-around their Teleprospecting teams had initially set up Teleprospecting as an after-thought. None of the companies had these Teleprospecting Best Practices in place. Then, in each of the turn-around situations I implemented these best practices and saw not only the Sales Funnel grow dramatically, but also significant revenue increase.

How the “Care Factor” Impacts Revenue

When I was VP of North America Teleprospecting at a $3B Global IT Solutions company, I managed a team of 40+ Teleprospectors based in the US, EMEA and AsiaPac. Our job was to feed quality Sales Qualified Leads (SQLs) to the 1500 person Field Sales team. Our focus was Global2000 companies with budget to purchase solutions in the $250K-$2M range. Typically our calls were with CIO/CTO’s, VP’s of Development/IT, etc. Each Teleprospector was to generate, on average, 8-10 highly qualified SQLs each month. Our annual SQL to sales pipeline quota was $7.5Million per Teleprospector.

After the first few months in this position I noticed a strange cycle that occurred at the end of every month and especially at the end of every quarter. What happened, at these times, was that the SQLs from our department were completely ignored by the Sales team. The worst time was at the end of every quarter, when SQLs would not be called until some 15 days, or longer, after they were passed to sales.

My managers and I started to track this cycle, which we called the “Care Factor”. We dubbed it so, because Field Reps were very interested (cared) in SQLs during the first month of every quarter and they ignored SQLs during the last week of every month. During the last month of the quarter, after the 15th day, the Field wouldn’t touch any new SQL at least for a few days after the quarter ended. This was often as long as 2 full weeks after the SQL was passed. By now, the SQLs were stale. Stale SQLs require requalification.

The Care Factor impacts revenue in several ways:

  • Constant requalification of leads is a waste of limited resources. Most companies, including our, don’t have enough Teleprospecting horse-power to support their sales organization. Rather than going after new prospects, we were regularly required to re-qualify solid SQLS that had already been contacted and previously qualified. Thus preventing a steady stream of new SQLs to Sales.
  • The SQL-to-pipeline quota was impacted and delayed.
  • Field teams delay in follow-up can give prospects the impression that your company is not responsive. Many of our SQLs were with C-Level Executives who took the time to answer the Teleprospectors questions and/or gave us the right person to contact. The delayed response made our company look bad because of the slow follow-up by sales. I have heard, from clients, that many of their deals were lost due to lack of Sales responsiveness.
  • Growth of the Sales Funnel is hampered, as quality SQLs are delayed. In some cases, SQLs won’t make the funnel because of the delay in follow-up. The delayed funnel growth has a direct impact on when deals will close.

We had a SQL follow-up rule in place for the Field. SQLs needed to be contacted within 48 hours. There wasn’t one Regional VP of Sales who cared about this rule at the end of the quarter. Our company, like most, suffered from the ”hockey stick” factor; a few deals close at the beginning of a quarter while most deals are closed at quarters end (spiking up, like a hockey stick). The “hockey stick” factor caused the Field to be super busy with trying to pull in revenue. They had no time to reveiew potential opportunities (SQLs). The combination of these 2 factors “hockey stick” and low interest (Care Factor) create a vicious cycle that impacts pipeline and revenue growth.

I have yet to find a company who has vanquished the “hockey stick” factor. From my perspective this hockey stick sales pattern implies that deep price discounts are being offered at the end of the quarter in order to meet quarterly quotas, which in turn, trains customers to wait until quarter end to buy. Here are a couple of suggestions for managing the”hockey stick” factor:

  • Following up with SQLs, quickly throughout the quarter, helps to build a larger sales pipeline, consistently, throughout the year. When more opportunities are in the sales pipeline, more opportunities are available to be closed, throughout the year, not just at quarter end.
  • Conducting a financial analysis to see whether deals were won or lost, each quarter, by utilizing deep price discounts. If Sales Reps use a strong sales methodology like Power Base Selling or Solution Selling to build need and create pain, they should be able to close deals anytime and without utilizing discounting as a sales method.

My solution to the “Care Factor” problem is this. Each Regional Sales Office should assign one person to review SQLs, as they come in. SQLs should go to the Sales Rep who has the bandwidth to work the deal, at the time the lead is passed over. It is far better for your company to be responsive to the needs of your prospects than to let quality SQLs slip away or to stall, due to lack of timely follow-up. If you must, create a commission sharing model to keep the peace amongst your Field Reps. In the end, your company will build quality sales pipeline and a lot faster. The Teleprospecting resource will be utilized efficiently, as time will be spent garnering new SQLs, vs. re-qualifying old SQLs. The benefit to your company will be a consistent flow of opportunities to your sales pipeline which will mean more revenue, each and every quarter.