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By Ron Strandin June 15, 2015

How to Sit in on a Funnel Review

Taming the sales forecasting challenge
office-594132_640If your revenue projections are unreliable and causing you fits, spend a little time reviewing the source data for your forecasts. Understanding where the data comes from and how it is factored before it hits your desk, will give you better insight into the process that leads to your forecast and the ability to alter the process.

Being a salesperson requires being an optimist. Regular rejection and the pressure of hitting sales quotas means a salespeople have to believe in what they are doing. Keeping your salespeople optimistic is paramount, and relying on their predictions of sales revenue requires some filtering.

I’m a big believer in the monthly funnel review. A funnel review is a formal meeting between each salesperson and management in order to review, deal-by-deal, every item in the salesperson's funnel. As an executive, you may not want to sit in on every review every month, but it’s important that you understand the quality of the data being entered into your forecasting system. Bad forecasting data is just as bad as no forecasting at all.

Your goal in the funnel review is not to beat up the salesperson or to challenge what they say, but rather keep the tone positive and upbeat. Your role is to observe, ask questions and make your own judgment on the predictions made by the salesperson. Keep notes, make predictions make predictions of your own, and keep optimism alive. Later you can meet with the VP of Sales to compare your judgements with theirs.

Here are my favorite questions to ask in a funnel review:
“Why is the customer going to buy a solution?” – Listen for a good business reason to make a purchase, such as to increase revenue, decrease costs or some forcing action like regulations or competition. It is always easier for a prospect to do nothing than to spend money on a new solution. There must be a business reason to go to the effort. If you hear “because they want it”, that may be true, but why do they want it? Try to get past the soft or emotional reasons and get down to the hard truths. If you can’t get a good business reason why this prospect would want to buy, then this deal is probably not going to happen.

“Why are they going to buy from us?” – If you have established a good business reason for the prospect to purchase then you want to determine how we are positioned to beat out the competition. This question should bring out the strategy that the salesperson is using and identify the weaknesses of the competition in the deal. Look for solid strategies, not “because they like me better”. If you can’t get a good strategy out of the salesperson, then you or other managers may have to help guide the strategy to a win. The farther down the funnel a deal is, the harder it is to implement a new strategy. You will have given the competition time to sell their advantages and your weaknesses. Try to catch these kind of deals early.

“Why are they going to buy in the time frame you predict?” – The answer to this question can be the toughest thing to predict and control but you must ask the question. If there is a budget that has to be spent, or a project segment with a definite due date, then you’ve got a great driver for getting the deal closed on time. Usually this is not the case. While there may be a time table laid out by the customer, remember that these are seldom followed. If the reason for the time frame is weak, you need to come up with a strategy or impending event to drive the deal to close on time. Sometimes this is a price reduction for a given time frame, sometimes it is offering additional products in a time frame. Find out what is important to the customer and see if you can work a deal that trades off what they want for the timing that you want.

Nurturing the Optimistic Salesperson
Back to the optimistic salesperson. Everyone is trying to do the same thing, sell more stuff in the time frame predicted to meet or exceed revenue projections. You are there to help that salesperson succeed so my final question is always this: “What can we do to help you?” – Sit back and listen. You may hear product issues, strategy help or competitive insights. These are the things that your optimistic salesperson thinks are keeping them from reaching their (and your) goals.

Topics: Sales Management

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