FIVE KPI's TO IMPROVE YOUR FUNNEL MANAGEMENT SKILLS

FIVE KPIs TO IMPROVE YOUR FUNNEL MANAGEMENT SKILLS

• How can you effectively assess your sales funnel's health?

• What KPIs should you watch to manage it better?

• How can you use these KPIs?

Our research and observations have identified 5 KPIs that help you rapidly identify the sales activities that are the most likely to increase your success rate and shorten your sales cycles.

1. SIZE

THE SIZE represents the total sum of opportunities (in $ or other units) in the sales funnel, regardless of where the opportunity is located in the sales process.

Two important rules regarding the SIZE:

• The SIZE of opportunities in the sales funnel for a given period must be an amount at least THREE TO FOUR TIMES the sales objectives for the same period. 
• If the SIZE is not at least three time your sales objectives, activities must be executed to increase the SIZE present in the sales funnel.

However, be careful, you must increase the SIZE in the right step of the sales process! In which step of the sales process is the funnel SIZE deficient? Prospecting? Discovery? Offer or even the conclusion?

The SIZE by itself is therefore an imprecise KPI. We must therefore look at the SHAPE.

 

2. SHAPE

The SHAPE represents the total amount (in $ or other units) of opportunities in the sales funnel, at each step of the sales process.

The funnel shape for a given period should be similar to the targeted optimum profile for the same period. Obviously, the optimum profile is based on the assumption that the majority of opportunities that enter the funnel will eventually come out.

In addition, the more demanding you are with respect to the quality of opportunities in your funnel, the more the optimal shape will be horizontal. (see graph below)

If the sales funnel profile is not optimal, concentrate on sales ACTIVITIES that improve the situation.

Dashboard example for SHAPE

 

 

 

3. SPEED

SPEED allows you to assess your effectiveness in moving an opportunity through the sales funnel.

It measures how many days on average an opportunity stays in the sales funnel at any given step of the sales process.

SPEED objectives must be set for each step of the sales process. For example, how many days, maximum, should an opportunity remain in the prospect step? In the discovery step? In the offer step? In the conclusion step?

By setting goals that take your sales cycles into account, you will be able to identify activities that can be carried out to shorten them or question the quality of certain opportunities.

Indeed, is it shown that the chances of concluding opportunities that are "dormant" in the sales funnel greatly reduce with time.

Dashboard example for SPEED

 

 

 

 4. SUBSTANCE

 

The SUBSTANCE represents the average quality of opportunities in the funnel at each step in the sales process.

We measure SUBSTANCE by calculating the average quality indices assigned to each opportunity, and for each sales process step. 

The quality index of an opportunity generally depends on your quality criteria. However, here are five that we have suggested to several of our customers: 

A good quality customer or prospect is someone...

1. Who is aware of his objectives and concerns
2. Who has the legitimate authority to buy and commit
3. Whose purchase decision is the subject of a sense of urgency
4. Who trusts you and your organization
5. Who listens to you and takes into account your point of view.

By assigning 0, 0.5 or 1 point for each criterion, it becomes easy to measure the SUBSTANCE of your sales funnel.

5. SUCCESS RATE

 

The SUCCESS RATE represents the percentage of opportunities won during a given period.

The success rate is calculated by dividing the total number of opportunities confirmed over a given period by the total of opportunities in the funnel for the same period.

A good success rate is usually around 45% to 60%.

If your success rate is not up to your expectations (less than 40%), it is important to review your execution at each step of the sales process. 

 

If you would like to have customized support in implanting these 5 KPIs in your company, don't hesitate to contact us at info@talentuum.com.