How Real is Your Sales Funnel?

Would you bet your next paycheck that the sales funnel you're looking at is real?

The sales funnel (pipeline) is getting more attention these days. This is definitely a good thing, given its pivotal role in a company's overall sales process. This attention is largely being fueled by the software and 'saas' companies (like salesforce.com) providing CRM and salesforce automation services.

The focus on CRM has given managers, reps and the head of sales a visibility of the sales funnel like never before. Visibility makes it possible to run reports, analyze, and be more productive at working the funnel.

In the draft of these path cutters is something that's being missed - low integrity of the data that's on the sales funnel.

What's the cost? Missed forecasts, insufficient prospecting, chasing bad deals, low productivity, longer sales cycles, lower hit rates, missed quotas.

A client of mine recently said his CRM investment is a mixed blessing. He's got visibility in one place, but he's got very low confidence in the funnel data he's looking at. Another client tells me he routinely cuts by 50% the forecast his salespeople send him. He has little confidence that they're giving him accurate forecast information.

So the first VP used to spend lots of time gathering funnels from all his managers and reps, and now he spends lots of time trying to determine what's real and what's not.

This missing link is good funnel data. Funnels of high integrity.

You know what integrity means: honesty, wholeness, soundness. In a word I'll say how real. And funnel integrity? How real is the sales funnel information on the funnel.

For example, is that deal at stage 3 really a $300,000 deal? Or is it a $75,000 deal that might lead later to a $225,000 deal? And if it might, then it also might not.

CRM's not the bad guy here. It's just that VPs who hoped that CRM investments would transform the accuracy and consistency of their forecasting and funnel data integrity underestimated the continued effort it would take to get the outcome they were buying.

The VPs and sales managers need to refocus on the funnel process itself, especially the funnel stages. Those stage definitions are the key to accurate placement of the opportunity. If the stages are misleading or not defined at all, the rep's more likely to place the opportunities at the wrong stage and he or she will have bad funnel data. If one hundred salespeople place 100 sales opportunities at the wrong funnel stage, now the VP of sales has a real problem on her hands.

Here's something to think about:
1) What's your confidence level in how real your funnel data is?
2) What adjustments do you make to compensate for less than 100% confidence, and how consistent and accurate are you in those adjustments?
3) What else would you be doing if you didn't have to spend your time making those adjustments every week, every month, every quarter?