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Companies interesting in growing sales revenue eventually focus on building a sales funnel. A sales funnel is a company’s collection of sales opportunities. A sales opportunity is a sales person’s seller relationship with a prospect for a purchase.
More succinctly, a sales opportunity is a progressive relationship between a buyer and seller for the purpose of creating a transaction. A sales opportunity, in it's easiest form, most often exists between a sales person and a decision maker from a prospective company. This is a primary sales relationship. It comes about when a sales person is prospecting for new business. A first contact is made with the prospect and the relationship is started. If there is any degree of interest on the part of the buyer in the seller's product, the sales opportunity relationship will start to take shape.
Any company who is creating customers has sales opportunities. As companies become more sales savvy, they learn to manage their sales opportunities using software. The popularity of Customer Relationship Management (CRM) software has brought sales opportunity management to the forefront.
The sales opportunity relationship is a very progressive relationship. It exists for the sole purpose of completing a transaction. Sales relationships have an accepted pattern that both the buyer and the seller have come to expect:
- Mr. Buyer, has a problem and needs a solution.
- Mr. Seller has a solution and is proactively looking for Mr. Buyer.
- Mr. Seller solicits Mr. Buyer and a sales opportunity is created.
- Mr. Buyer asks Mr. Seller some qualifying questions. Mr. Buyer doesn't want to waste his time.
- Mr. Seller asks Mr. Buyer some qualifying questions. Mr. Seller doesn't want to waste his time.
- Mr. Seller tells Mr. Buyer about the features and benefits of his product.
- Mr. Buyer works through his problem-solving steps to determine if Mr. Seller's product is the right solution.
- If it's a fit, Mr. Buyer and Mr. Seller develop a strategy to complete a transaction.
- Mr. Buyer purchases the product from Mr. Seller to solve problem.
The sales funnel is a collection of these types of sales opportunities. A sales person has a sales funnel consisting of all the individual sales opportunities. A company has a sales funnel consisting of all the sales people's sales funnels.
It's called a sales funnel because of the progressive relationship between the quantity and quality of sales opportunities in a funnel. The higher the quality the lower the quantity. There are more leads than qualified prospects. There are more qualified prospects than customers.
A sales funnel takes on its own unique characteristics because it's relationship driven. Like a family has character traits, so does a sales funnel.
A sales funnel will have traits also. It depends on the product or service being sold, the type of target market being approached, the price of the product or service and the competitive environment. Most importantly, the sales person who organizes and builds his or her own funnel will exert the most influence over its growth and development.
To get the most out of a sales funnel, identify the sales stages of the funnel such as lead, prospect and customer. Track the stages in a contact management software program so you can manage the details of the sales relationship.
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