Most of us know Pareto’s Principle or the 80/20 rule as it’s better know. An estimated 80% of your revenues come from 20% of your customers. But what does working the 20 percent mean?
You can identify where each prospect is in their buy/sell process with you by managing your sales funnel. Remember not all of your prospects that start out in the top of the funnel will make it to the bottom, they are not suppose to. The percent of those who make it through the different parts of your process determine your conversion rate.
There are specific steps within your funnel that should move a prospect closer to opening a relationship, one step at a time.
To make sure you are managing your sales funnel, take these following steps:
1. Create a system for your sales process. Give some thought to this by answering questions such as, “What happens when a lead calls in?”, “What marketing material do we send to interested prospects?”, “How do we follow up on sales inquiries?”
2. Chart the prospects and where they are in the sale process. This way at any given moment, you know where your prospects are in your sales cycle.
3. Identify the steps of your funnel. Define all the steps you and your sales team take from the time your process begins all the way until the deal is closed. It’s better to have to many sales steps than not enough
4. Make sure that your sales steps match your target market’s buying steps. If your target market primarily uses the internet, make sure you have a strong website. Make it easy for them to buy. If you are requiring prospects to jump through hoops that they could find tedious, you could be losing out on sales.
5. What’s “moment of truth” in your sales funnel? Identify your own moment of truth in sales process. Too many business owners who are also their own sales people spend way too much time chasing prospects that are not interest, the 80%. Instead, I recommend that you focus your time on the one’s that are, the 20%. Understand when to hold them and when to fold them.
6. Measure your conversion rate. Implement Key Performance Indicators. KPI measurement’s for the conversion rate from lead to sale. Also, consider additional indicators that measure other conversion rates in your sales process.
By knowing where your customers are in the sales process and the conversion rate through each step, this also helps you identify area’s that could use some improvement.
Lee Huffman is a serial entrepreneur and is known as “The Business Catalyst” because of his contribution to business leaders around the world. He has presented to thousands of business leaders in over 30 countries, coached and mentored dozens of successful leaders, and launched over 20 successful businesses. Lee now represents ActionCOACH as their Master Licensee in the states of Arkansas, Kentucky, Tennessee, and West Virginia. If you think you have what it takes to be a coach take our free coaches test at http://www.leehuffman.actioncoach.com or for information give our office a call at 1-866-404-7495.
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