Do you use the income statement approach or the balance sheet approach? Not sure? Here’s how to know and then how to use your sales funnel to win more sales.
Most salespeople, sales managers, and other business developers do know that the “sales funnel” plays a key role in making a sale. But too many do not know just what that role is or how to turn it into an Oscar-winning performance.
And that’s surprising. After all, the sales funnel touches nearly every step in the sales process: networking and prospecting at the top; discovery on the way down; following up after quoting before closing the deal, and, finally, using the funnel’s metrics to reflect success—or lack of it. (Closing is not part of the funnel but the destination of a well-navigated journey through the funnel.)
To make the most of your sales funnel, you first need to know the type of sales you make. Are they transactional or consultative?
Transactional sales are simply straightforward exchanges of value that are immediately clear: You pay for medication at a pharmacy. You sell cookies door to door. Your kids sell lemonade to people who are thirsty. Most door-to-door selling is transactional. Nearly all on-line selling is transactional. Nearly all of the value is in the product or service sold, and it occurs after the sales process is completed.
Consultative Negotiation: What It Is, How to Do It
How can you use your consultative selling skills in consultative negotiation? Find out as Productive Strategies President Phil Krone and Senior Consultant Tom Hazlett cover the topic for the Valley Industrial Association at 9 a.m. on April 23. In the 90-minute presentation and workshop, negotiation styles, skills and principles will be explained along with the minute-to-minute, face-to-face tactics the best negotiators have always used. Attendees are encouraged to bring their negotiation challenges and opportunities, too. The event will be conducted virtually. Members can attend for $25 and non-members for $35.
Consultative selling is not so straightforward. Readers of this column are overwhelmingly business-to-business sellers and, as a consequence, consultative sellers. Our definition of consultative selling is providing value during the sales process—that is, before the deal is sealed and apart from any value the product or service provides. After the sale, a salesperson often is, in effect, part of the deliverable. They provide expertise or skills a customer needs to get the most value out of the product or service itself.
Here’s an example of what can happen if you take the income statement approach used for transactional selling when you’re making—or trying to make—consultative sales.
A sales rep for a client whose service assisted hospitals with their finances was spending most of his time at medical conventions meeting hospital CFOs, and he made many strong contacts. Yet when we asked when he followed up, he said he didn’t have time. He was too busy meeting people at the industry trade shows. In other words, he was pushing as many leads as possible into the top of the funnel but not pulling any of them through to gain a sale!
Keep in mind, too, that these were all highly qualified leads. They were decision-makers who could purchase his firm’s services—and he had met them face to face. You can’t tee up a sale any better than that. But teeing up is not the goal. Hitting the ball is the goal. Not surprisingly, CFOs rarely followed up with him and actual sales were even rarer. We advised his bosses to cut the number of conferences he attended in half, improve his discovery skills, and then use those skills to guide the best prospects through the funnel to a sale. That’s the balance sheet approach, which our popular consultative selling course, FOCIS® teaches.
Here’s a one-minute video example of how to think about the sales funnel and the numbers behind it: Phil Krone: Sales Funnel Metrics—Know Your Numbers.
To recap: The first step in improving your use of the funnel is to determine whether your sales process is transactional or consultative. Once you know that you will know if you should take the income statement approach or the balance sheet approach to managing your time in the funnel. If you want help thinking this process through and ideas on how else to use the funnel productively, please get in touch with us at 847-446-0008 Ext. 1 or firstname.lastname@example.org.
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