Customers don’t just “buy”, it takes time to get onto lists and databases, then you get the opportunity to demonstrate your affordability with a quote, and maybe then demonstrate your capability with an order. It can feel a lot like you’re doing a dance, steadily moving from “enthusiastic but awkward” dance moves to finding your natural rhythm with your dance partner. Someone needs to take the lead and choreograph the dance, why not you? Provide the guidance, move your dance partner in the right direction and find your sales & marketing rhythm. That's where your sales funnel comes in…
Even if you haven’t documented, drawn up or formalised your process, YOU have the makings of a sales funnel. Every existing UK Manufacturing business has the potential to create a Sales Funnel. So what is a sales funnel? Sometimes referred to as a “sales pipeline”, put simply a sales funnel represents a pool of sales opportunities that are at different stages of the sales process.
Your business has this pool of opportunities. However, you may not be categorising and formally organising these opportunities into the “stages” of the sales & marketing process. You already instinctively know that not all opportunities are equal, and not all opportunities are going to come off. You also know that you need to communicate differently with different prospects and potential customers. You know this through experience.
So What Benefits Does A Sales Funnel Bring To The Table?
It gets everyone in your business on the same page when it comes to communicating with potential and existing customers, and it helps you identify where your sales and marketing efforts need to be focussed. A sales funnel can also serve a much wider business purpose. Financial planning and forecasting can be pure guesswork, a sales funnel eliminates a lot of the guessing. It brings a lot to the table!
Those 3 again:
How Does A Sales Funnel Do All Of This Awesome Stuff!?
Once you think about the sales journey your customers go on, you’ll start to understand what the needs of your potential customers are based on “where they are” in the journey. Further to that, once you have your actual leads and prospects plotted on the sales funnel it becomes clear which parts of your sales funnel is looking sparse. By identifying the weak areas, you can understand where you need to direct your sales & marketing efforts.
As far as financial and sales forecasting goes, your team get a much better idea of when customers are actually likely to start placing orders, the size of the orders and potentially their frequency. Without looking at your “pool of opportunity” as a funnel, it can look a lot like “anything is going to drop at ANY moment”. We all know from experience, this is not the case. Sales may seem sporadic, but if you start looking at opportunities as part of a sales funnel, you’ll start spotting the signs of those that are “going to drop” pretty soon.
The key to this answer is visualisation. Even by visualising the things you have within your own mind, you can discover patterns and opportunities that weren’t apparent to you until they were written in front of you. (We’re busy people, we can be forgiven).
How Do I Start A Sales Funnel For My Subcontract Manufacturing Business?
Here are 4 steps you can take to transform your "disorganised pool of opportunities" into a fully flowing "Sales Funnel". Stick around to the end and you'll even get some bonus tips about how you can make maintaining and managing your Sales Pipeline as easy as 1-2-3...
Starting a Sales Funnel - Step 1 - Map The Journey
It all starts with a list of names - customers, new and existing - understand where they are in the buying journey, are they currently buying, or are you currently quoting, have they bought once - but there’s the potential for more? Have they just found your name and are interested and want to come and see what you do? Have they visited your website and not yet even made contact?
Typical stages of a sales funnel might look like this:
Lead or Suspect:
These potential customers have discovered you, they may not fully understand you, and they may not have directly expressed interest. Expression of interest may be the download of a “Lead Magnet” from your website, or a visit to your Capability Profile on Manufacturing Network.
Those who have shown some continued interest, maybe even reached out more directly for more information by email, telephone call or a face to face meeting. It’s likely they see some alignment between your business and their requirements, but that’s not been fully established yet.
Qualified Prospect or Lead:
You have identified alignment between the customers’ requirements and your capabilities, you believe you can add value. The potential customer is seeing alignment, but you still need to demonstrate on their key metrics (QCD). The potential customer is talking about projects that may fit with your business.
These guys have sent you an RFQ so they can understand the quality of your response and understand your price, but they may not yet have placed any work with you.
You’ve won a piece of work from the potential customer. They have placed an order which utilises your capabilities, but may not demonstrate your full range of capability.
At this point the customer hasn’t just placed a single order, but is now providing returning RFQs and orders. Your relationship is deepening and opportunities for future work are discussed openly and freely.
Starting a Sales Funnel - Step 2 - Identify The Needs...
Once they are categorised into the steps of the sales funnel, think about the questions that each of those customers and potential customers has at each step in that sales funnel - think about the answers that would get them to move along the funnel. Answering these questions, fulfilling these customer requirements at each stage of the sales funnel will form your sales approach, something which can be used again and again.
Questions from Leads & Suspects
As a potential customer who has just stumbled across your business (a lead or suspect), they may not even have a need for your services. However, that doesn’t mean they won’t at some point in the future. So what sort of questions do these potential customers have? They want a high level overview, they want to know your capabilities “at a glance”.
Questions from Prospects
Contrast this with with a prospect, who wants to dig deeper into that capability. They’re interested in things like; Does your business have the depth of capability in the right place, what are your “Core” capabilities? This is a little deeper than an overview. This information won’t draw people in and generate leads, but it will move them from being leads to prospects.
Questions from Qualified Prospects
To be a qualified prospect or lead they have to have expressed a wider and deeper interest in your business, talking about sending RFQs. They are now wondering about details. What software do you use? What file formats do you want to receive information in? How do you prefer to transfer and receive data? Who is the contact or engineer they will be working with if they do send an RFQ? Think about all the questions that would enable a potential customer to formally send an RFQ.
Questions from Active Opportunities
These are likely to be heavily related to their projects. They’ve sent you an RFQ, so they want to know how you’re going to deliver, how much you’re going to cost, how quickly you deliver and what quality standards you hold yourself to. They also want to know what happens when things go wrong. This sounds pessimistic, but as a new supplier, you are an unknown quantity. You can help them reduce the risk in their minds by re-assuring that misunderstandings will be prevented, but when there is a problem, you’ll be there to solve it. This is where good specifications, quotations and contract management really start. Check out our article on how you can retain more of your profit margin through better small business contract management.
Questions from Converted Customers
This is where the questions can stop. But you need to keep answering, even if you don’t hear the question. These guys want to know “what else?” You have demonstrated some capability, but not your full repertoire. This is where the majority of small subcontract manufacturing businesses end up in a box, never to break out again! You get into the supplier database under a single capability, or limited set of capabilities.
You need to be answering the question “What else?” On an ongoing basis. That’s what delivers them to the next phase of the sales funnel.
Questions from Retained Customers
These customers are happy. But they won’t necessarily stay that way forever. Suppliers are often accused of “getting comfortable” or “letting things slip”. The evidence can be anecdotal, sometimes not even real, but it’s a perception. If your customers perception of you slips, this opens the door for someone to steal your lunch.
These guys are wondering “What are you doing to make me look good?” Once a buyer or engineer in a business chooses a supplier, they can become your champion. They want to know about the good work you’re doing, improving your business, giving back to the community, going above and beyond for customers, and expanding your capabilities into areas they require. They may not ask for performance data, but why not provide them with quality, delivery and cost performance data as part of your “monthly update” or newsletter?
Starting a Sales Funnel - Step 3 - Identifying the Value
Once you’ve identified your pool of opportunity, categorised and placed the potential and existing customers in the funnel it’s time to categorise them further - how much are they worth? what’s the potential value, when is an order likely to be placed, is there a lifetime value beyond the first order? The answer to these questions will allow you to prioritise and focus on the most important customers and potential customers in your sales funnel. (if you’ve got time to cater for the needs and deliver a comprehensive sales pitch to everyone in your sales funnel, you haven’t got enough customers in the funnel!)
There are a few things you can do to help you understand the value of your sales funnel or pipeline. Documenting your sales funnel and identifying the value of each potential customer can get everyone really excited. BIG numbers! However….you won’t win everything. So you can add a likelihood to each of the opportunities, this can sometimes happen from the prospects stage, other times the true value and likelihood of the work coming off is not clear until customers turn into “Active Opportunities”. Applying a percentage likelihood to opportunities in combination with a sales value is a really useful way of seeing your true sales funnel value.
Starting a Sales Funnel - Step 4 - Finally it’s all about maintaining it
Then it’s a case of keeping your sales funnel maintained, update it - frequently, review it, refine the stages (don’t change them too frequently, stick with your first attempt for at least 3 -6 months, collect any changes / refinements to the stages and implement at that point). And then don’t change the stage definitions at any greater frequency than 6 monthly. This allows you to stabilise the categories, so everyone is on the same page - it’s important everyone involved understands the difference between the stages of the sales funnel really well.
And there you have it - Your Sales Funnel is up and running
A way to refine your sales approach, a way to systematically select a sales approach based on some criteria, a way to prioritise where your sales efforts are directed, a common language for your sales team, a bridge between sales and planning your finances, a method of providing confidence in, or evidence of future sales that allows you to plan, grow and invest.
Very powerful - and can be achieved with no more than an A2 piece of paper and a bunch of post-it notes!
Taking your Sales Funnel to the next level
Sales funnels don’t have to be a physical thing. You don’t have to masterfully craft them out of paper and update them with “new post-it notes” for emerging opportunities. Although this is definitely the way to START the process, managing it is another thing altogether. We wrote an article a little while ago about CRMs or Customer Relationship Management Systems. The majority (if not all of them) have built-in sales funnel capability. This allows you to manage your sales funnel on-screen, in real time.
The other significant advantage here is the ability of these systems to produce visual outputs from your data. They create awesome graphs, without the need for ANY Excel skills whatsoever! You get all the power of complex systems, without the complexity.
If you’re wondering about the full scope of a CRM I’d suggest checking out our article on CRMs right here. If you’re thinking you might like to jump on in and start managing your newly built sales funnel with a CRM, here are a few recommendations of systems for small businesses. Some are free, some are based on a cheap monthly fee (less than £10 per user). You’ll wonder where this has been all your life! Say goodbye to notes hidden in notebooks and complex spreadsheets…
Capsule CRM - (Our recommendation. It's free for up to 2 users. Paid plans are pretty cheap at £8/month per user)
Insightly CRM - (Also free for up to 2 users. Paid plans are about £10/month per user)
HubSpot CRM - (FREE, no limitations. This CRM platform is built to integrate with some really swish stuff, but you won't need it! Just take the free CRM)
Streak for GMail (Also has some email tracking functionality, and it’s free with limits. Paid plans start at £12-13/month per user. It works right inside your GMail or Google Mail account)
There are a tonne of others - but don’t dither, get started. Most of the systems out there are selling the same base functionality, most of the differences are in the functionality that, to be honest, a Subcontract Manufacturing business won’t even need.
I’ve demonstrated the power, benefits and how YOU can take some action to start your very own sales funnel or pipeline today. As an added bonus, I’ve even shown you the path towards managing and maintaining your sales funnel using a CRM. It’s a lot to take in, but if you follow these steps, and use this process, YOU will transform your “disorgansied pool of opportunity” into a fully flowing “sales funnel”. Good luck!
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