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By Chris Strandin August 25, 2015

Why The Sales Funnel Is Vital To The VP Of Sales

What happens when a VP of Sales can't hit their number? Often, a new VP of Sales is brought ot get the job done. So, how does a great VP of Sales keep their job, hit their number, grow their team, or at least accurately predict their performance? They understand the sales funnel and how to use it to their advantage.  

Understanding the Sales Funnel

A great sales funnel is made up of multiple stages, the number and labels of which differ for every organization. If you have a well-defined sales process and sales funnel, each stage has well-defined entry and exit criteria to remove ambiguity. Tracking the leads and opportunities as they move through these stages reveals where your deals are, where your deals should be, and what that means for your targets. Deals fall out of the sales funnel, that's why nobody calls it the sales cylinder, so how do you determine where/why/how these deals fall out? Until you understand your funnel well enough to know where it is leaking, you can't start to repair it, and you will miss your number. A good sales VP will be proactive with this information and work toward solutions as soon as possible if they want to be successful.


Filling the Sales Funnel

Ever complained about not getting enough leads? Me too. Step one in any review of a sales funnel needs to be ensuring that enough leads are being poured into the top of the funnel. If you don't have enough leads at the top of the funnel, you won't have enough at the bottom of the funnel. You need to do the math to understand how many leads it takes to make $1,000 in revenue, then multiply backwards from your quota to understand how many leads you need given your current efficiencies/inefficiencies throughout the sales process. This is important to a Sales VP because it gives them the power and information to suggest or make meaningful change to the company's lead generation efforts.

Knowing how many leads you need does not let you off the hook if you don't get them, it means you need to focus on other areas as where you can improve close ratios between funnel stages. The purpose of understanding how many leads you need at the top of the funnel is so that you can see how many leads you would need holding all else constant. This also gives you the data to monitor how the number of leads that enter the sales funnel change over time, which can help you predict future output. We call this a Leading Indicator.


Managing the Sales Funnel

If there's not enough in the funnel, focus on filling the funnel. If there's a lot in the funnel that falls out, focus on how to keep it in the funnel. There are a few key things a Sales VP must do when trying to fix a "leaky funnel" which will help them achieve greater success: 


VP of Sales Top 5 Things to Remember in Managing a Sales Funnel:

  • Build or analyze your sales funnel report to make sense for your business.
    • If your funnel doesn't make sense for your business, rebuild it. You will look incompetent if you cut and paste someone else's sales funnel structure from the internet and try to make it work. 
  • Ensure the deals in your funnel are real, and accurate.
    • If you let sandbaggers and "optimists" mess with the reality of the data in your funnel, you will spend a lot of time working to get ultimately the wrong answers. Wrong answers means lost credibility, poor decision making, and wasted resources. 
  • An even spread of deals across the funnel means more predictable revenue
    • A sales funnel that looks like a snake digesting a deer means your will have "feast-or-famine" revenue which is highly unpredictable and undesired by everybody from the individual reps up to the top of the organization. You should always have more deals and more dollars in the stages higher up the funnel.
  • Focus on sales funnel stages with the longest duration, and add support to them.
    • Many factors can cause deals to stall, but identifying the stages where this occurs will help you to isolate the problem and formulate a fix which will allow you to shorten the sales cycle or improve opportunity retention though that stage. You may need a better demo, sales training, increased travel budget, etc.
  • If individual reps struggle to get through certain stages, look to coach them through in that specific area to improve their stage conversion.
    • We all have strengths and weaknesses, and while salespeople generally try to spend their time doing what they are good at, their stage duration relative to their peers provides an insight into their weaknesses and where they need to improve or spend more time.


If the VP of Sales has bad data in the sales funnel, doesn't understand the sales funnel, or doesn't use the sales funnel to improve the organization, they will find themselves with inaccurate and unpredictable sales results.  You need to know how many leads you need in the top of your funnel to make your number, and if that's realistic. You need understand your funnel in the context of your business, and ensure that all the data you use in it is accurate. Focus on getting an even and predictable flow through the funnel by isolating stages and reps which behave differently than others to gain efficiencies and correct problems. 

Our sales consulting firm has worked with thousands of sales funnels and we would love to help you with yours. Schedule a 30-minute complimentary sales consultation with one of our expert sales consultants to start a conversation about getting your sales funnel on track. 

Topics: Sales Management, Sales Strategy


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