The sales funnel is a collection of sales cycles. A sales person has a sales funnel of all the sales cycles assigned to him or her. 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 cycles 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 contains sales cycles from all sales stages ? lead, prospect, and customer. A sales funnel takes on its own unique characteristics because it’s relationship driven.

Like a company has character traits, so does a sales funnel. Sales funnels can be small or large. Sales cycles can move slow or fast. Some products are impulse buys and sales cycles are easy to complete. Other products require a lot of change on the part of the buyer and sales cycles are very complex.

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.

Here?s a brief story about a sales funnel.

A product company had just lost its largest customer. Nearly a third of the company?s revenue was gone. The owners were looking for a way to get the revenue back. There were eight sales people in the company including the sales manager. People were using Outlook, ACT, and even Excel to keep track of leads and prospects. Sales cycles were all over the place

I told the owners the only way to get the business back was to strategically build the company?s sales funnel.

We reviewed each person?s sales funnel. We gathered together the sales cycles for each rep. We found out how many sales cycles each rep had and at what state the sales cycles were in. Each sales person?s funnel was unique. They each had different target markets and varied interests so the funnels were quite different.

We collected each person?s sales funnel and combined them to create the company?s first formal sales funnel. Unfortunately, the company had too few sales cycles. They were several hundred short. If the company wanted the revenue back it was going to have to grow its sales funnel.

Over the course of a year the company tripled the size of its sales funnel and grew its sales strategically. Not only did the company get the revenue back, the company?s profit margins improved.

Every operating business has a sales funnel running now. It?s a matter of how formal, defined and controllable it is.