5 Fundamentals for Improving Win-Rates and Narrowing the Gap between Forecast and Results.
A common challenge we see in early and growth-stage companies is that they often do not have a well-defined sales process. Perhaps, not any formal sales process, at all.
Do they still manage to sell? Sure, they do, to a degree. But do they sell as much as they could, as quickly as they could? Not at all. And are they able to effectively manage their opportunity pipelines and forecast reliably? Certainly not.
Every company, no matter its maturity or stage of growth, can benefit from having a unified end-to-end sales process that begins with demand generation, and continues in a coordinated, consistent way through deal pursuits, pipeline management and forecasting, cross-sell / up-sell / renewals, and beyond.
This five-part series of articles focuses specifically on five fundamentals of a basic sales process that can improve sales performance immediately, and set the stage for building out a broader unified process over time. These five fundamentals are:
Define a Common Set of Sales Stages;
Define Typical / Recommended Activities Sales Reps should be doing at each stage;
Define specific, required Stage Gates that must be satisfied for opportunities to advance from one pipeline stage to the next;
Assign Specific Probabilities of Close to each pipeline stage;
Ensure that all stage definitions, activities, gate requirements, and probabilities are consistently and completely communicated, understood, and used throughout the sales organization.
Let us begin by exploring the first fundamental on my list in more detail.
Define a Common Set of Sales Stages
The first task in creating a basic sales process is to define a set of Sales Stages (a.k.a., "Pipeline Stages" or "Funnel Stages") that is appropriate for your business, and to enforce mapping of every opportunity to its most appropriate Sales Stage. A proper sales funnel picks up where the marketing demand funnel ends -- with the handoff of a Marketing Qualified Lead to the sales team. Note that for smaller organizations without a formal lead-management / demand-funnel process, the entry point into the sales funnel may just be a raw lead generated through any number of means or channels. In any event, there is clearly a starting point to the sales funnel at which a sales rep (and/or a Business Development Rep, in larger organizations) begins to interact with a lead.
In the early stages of the sales funnel, the objectives are to decide if a given lead is one you want to pursue, if the lead is sufficiently qualified to advance from a raw or marketing qualified lead lead to a Sales Accepted Lead, at which point the lead becomes an early-stage opportunity, and finally, to further qualify that early-stage opportunity, to determine whether it is worth the investment of selling time and expense that would justify continuing the pursuit. If so, it becomes a Sales Qualified Lead (in marketer's parlance, or a Qualified Opportunity, as a seller might call it), and the real selling begins. A typical sales process may have 7 to 10 stages, beginning with the Marketing Qualified Lead stage, and ending with a (hopefully!) Closed-Won opportunity.
Note that opportunities may be disqualified or lost at any stage, but by employing strong disqualification criteria in the earliest stages of the funnel, you can improve your success rate in subsequent stages, knowing that you are investing time and money in only those opportunities that have a reasonable chance of making it to the finish line. We will talk more about qualification techniques in a future blog post.
Our next post in this series will discuss defining sales activities to accompany each funnel stage. Thanks for reading!
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About the author
Eric Heine, Founder of Growth Point Solutions LLC, draws upon over 25 years experience in marketing, sales, service, and IT leadership to advise C-level executives and boards of directors of growth-stage companies, as well as growth-equity investors, to help organizations develop, refine, and execute the revenue strategies that power significant, sustainable year-over-year growth.
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Tags: #SalesProcess, #SalesStages, #Funnel, #Forecast, #WinRate, #HowTo
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