Most business owners are familiar with their sales funnel—the accumulation of new business prospects that are in the process of choosing to buy from you (or not). The sales funnel is arguably the most important process that a growing business needs to track. How are we turning people who are “interested” in buying from us into people who are “actually” buying from us? (Or for bonus points, how do we apply our marketing efforts to people who are merely “interested” and turn them into buyers…?) The growth and success of your sales funnel drives the growth and success of your business.
One of the most common misconceptions about the sales funnel is that it can be managed.
We can be diligent in following up with prospects; we can make sure they have all the information that they need to make a decision. We can pressure and poke, but at the end of the day, prospects decide when they decide. The only way to get more sales out of your funnel is by putting more qualified prospects in the top of the funnel.
Yes, we should optimize our interactions with each prospect to make sure the maximum number of inquiries turn into meetings, and the maximum number of meetings turn into proposals, and the maximum number of proposals turn into customers. We should track those conversion rates and find ways to improve them…but this alone will not have the impact we are looking for.
What I have found is that most business owners spend too much time focused on the bottom of the funnel—on working hard to close all of their proposals—when the truth is that many of those deals they are trying to close either were never qualified in the first place! The truth is, at the proposal stage, many of those deals are going to close (or not close) regardless of any additional effort we put into them.
Instead of working harder to desperately close deals that are in the funnel, spend that time building better marketing that will bring in more qualified leads. Having a sales funnel that is full of qualified leads (and knowing that there are more coming) makes you act differently. Instead of trying so hard to close the last lead, you shift your focus to the next lead (and the next, and the next). Instead of stretching to close a deal that you might be good at, you focus only on the deals that are a slam dunk for your team. Instead of coming across as desperate and needy, you present as confident: your business is a scarce resource that can only be deployed to the most worthy clients. What would that be like?
With a full pipeline, and confidence that you can keep it full, you will actually close more deals! That confidence and scarcity is attractive to your ideal prospects!
So you’ve done it. You’ve got more qualified leads in your sales funnel. You’re closing more deals and feeling great about it. And then you slowly realize: your sales pipeline is not the only pipeline you need in order to grow your business.
For most businesses, when your sales pipeline grows you’re going to need to hire more employees. We usually demonstrate our worst sales behaviors when we need an order; and, similarly, we do our worst hiring when we are desperate for help! If you are overworked and stressed out, any warm body looks great (but trust me, they aren’t)! So, we hire quickly out of desperation. Then we try to make do with poor quality employees. We have more turnover, and in the long run it’s more work for us and more costly for our business.
Instead, you need to be building a pipeline of potential employees to match your sales pipeline.
If you have a strong sales pipeline, you should be able to forecast the employees you are going to need to add before you need them. Getting a job posting up and starting to gather candidates before you need them means that you don’t have to settle for a “good enough” candidate, but you hold out for the candidate you really need. Also, having a pipeline of prospective employees means that you’re less likely to tolerate poor performance or bad attitudes in your business. You can have the confidence that when you cut that problem person loose, you’ll have someone just as good (or better) to fill in.
When it comes to sales and hiring, the best kind of pipeline is a full pipeline. By focusing on filling the sales pipeline with qualified leads, the whole sales process becomes more efficient. When you allow that to drive and inform a hiring process that you begin before you need it, the hiring process is more efficient, too. You operate with more confidence and attract better leads, closing the best ones with more efficiency. By only focusing on the best deals—and the best people—and you are less likely to tolerate any that have issues or “red flags”. Instead, you feel freed up to focus on just the ”good ones”.
Does this sound great to you? Drop us a line! We’ll schedule a time to chat about how to create these two pipelines for your business.