Sales Funnel Management

The sales funnel is a great measure of your company’s health. It provides a clear view of the opportunities currently available to your sales team, showing you the revenue that your team is going to make in the months ahead. A well managed sales funnel will get all of your sales efforts well organised and put you in control of your sales results.

What is a sales funnel?

A sales funnel is a visual representation of the steps required to sell your product or service. The sales funnel gives you a complete overview of where in the sales process your money is.

A sales funnel reveals how many prospects you have in each stage of your sales cycle, and also details the conversion rates for each stage. This will tell you whether you have enough deals in your funnel to meet your goals, and whether you need to appoint special attention to certain deals.

The sales funnel typically contains the following four metrics:

Number of
deals in your funnel.
Average size of a deal in your funnel.
Close ratio - average percentage of deals that get won.
Average deal lifetime before it’s won - or sales velocity.

How to effectively manage the sales funnel?

Measuring the sales funnel metrics of your business is the first step to effective sales funnel management. The following graph provides an example of a small team’s sales funnel with figures for the whole sales funnel as well as for each stage separately.

These figures are useful for benchmarking against current results and future trends. For achieving ongoing improvements, it’s good to complete this exercise at least once a year.

What you can measure, you can manage

If your team has currently just 6 deals in the first stage of the funnel instead of 13, then it’s a clear sign that you should find and add at least 7 new prospects in order to achieve the numbers you’ve made previously.

This exercise will also start showing you positive trends – for example, you’re making great progress if you’ve increased the average deal value in your funnel to from 13,080 to 14,500.

You might pick up other things your team could do to improve:

  1. Get deals from stage one to stage two quicker
  2. Increase the volume of total deals
  3. Increase the size of your deals by upselling

Use sales funnel management software

Measuring all these funnel metrics is not easy. Collecting the data on a regular basis takes effort, and sales funnel software such as Pipedrive will help you do it effectively.

Interested in sales funnel management tips? Read them on Pipedrive’s blog.

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Sales Funnel Management | Pipedrive
Sales Funnel Management