Visit the Sage

Measuring Your Sales Funnel

This post is Part One of a four-part series on how to accurately and objectively measure your sales funnel from your prospects' points of view. The four parts will be:

Part One: Introduction, Definition And Establishing Your Target Sales Funnel
Part Two: Measuring Your Current Sales Funnel And Determining What To Change
Part Three: Getting Inside Your Prospects' Heads
Part Four: Keeping Your Sales Manager Off Your Back

This series will be most appropriate for people who:

• Sell business to business and salesperson to buyer
• Have a multistep sales process and hardly ever close a deal in one meeting
• Have a sales cycle that usually takes four weeks or longer
• Must close one to six sales per month to hit their quotas or income goals

Each new part will be posted on Friday mornings starting today and continuing for the next four weeks. Note: You might want to subscribe (see right) to ensure you don't miss any of this series.

If you follow along and apply the concepts as I outline them:

• Your wasted time will disappear.
• Your frustration with prospects will greatly diminish.
• You will always have the answer to the question: "What should I be doing right now?"
• Your relationships with prospects and clients will be strengthened.

Definition: What Is A Sales Funnel?

For the purposes of this series, a sales funnel is defined as the period of time beginning with your first actual sales appointment with the prospect and ending when the prospect either stops buying or buys. Marketing (ads, networking, writing articles, etc.) and prospecting (cold-calls, cold-letters, drop-ins, etc.) activities happen before the sales funnel even starts, and we will not be covering how to measure those activities here (although you should measure those also).

Is The Prospect Even In Your Funnel?

While you may be selling, if your prospect is not buying, you have no chance of closing the deal, and you should stop wasting your time!

So the first question you must answer is: "Is the prospect really buying?" If the answer is "Yes," then the prospect is in your sales funnel. If the answer is "No," then you are still in the marketing or prospecting phases with this prospect, he or she is not in your funnel at all, and you should be tracking your progress with this prospect elsewhere.

Determining the answer to this question is actually quite simple, if you use this brutally objective measurement rule:

The prospect is buying only if all three of the following conditions have been met:

1. You have a firm appointment set with the prospect (meaning your name is in the prospect's calendar) at a future, specific date and time. ("Call me sometime next week" is not what we mean by a firm appointment. What we're after is more like the prospect's saying, "I'll expect your call at 2 p.m. on Tuesday, August 29." Or, perhaps, "I'll meet you at Luciano's for lunch at 11:30 Wednesday, August 30.")
2. The date of your next appointment is within 21 days of today. (For example, if you have an appointment set 22 days from today, then that prospect is not in your sales funnel. However, tomorrow when you look at your sales funnel, he or she will be in it, since it will then be only 21 days.)
3. The prospect knows it's a sales appointment, and knows he or she is the one who is buying. (Not a chat. Not a "get to know each other" meeting. Not an appointment where the prospect tries to sell you something instead.)

If these three conditions are not met, then according to our rules, the prospect is not buying and is not in your funnel at all.

Establishing Your Target Sales Funnel

To accomplish anything great, you must have a clear description of your goal. In this measurement system, you'll set a target sales funnel, then work to make your actual funnel look exactly like your target.

To determine your target sales funnel, we'll work backwards from your sales quota or personal sales goal and apply some assumptions that have been proven to be good starting points. Then, as you measure your funnel through the coming months, you can adjust your target based on your real-world results.

We're going to use four levels to establish your target sales funnel and to track your actual sales funnel. here is how we define each of those levels:

Level One: First Appointment -- This is the where you track prospects with whom you've set a first-time appointment to discuss a new sales opportunity. After the appointment, the prospect is then moved to level two, three or four, or removed from your funnel completely.

Level Two: In Progress -- This is the where you track prospects with whom you've had the first appointment but have not yet delivered a contract for signature. So if your name is in the prospect's calendar for a second, third, fourth, etc. appointment, you track that prospect here.

Level Three: Contract Out -- Once you've delivered a contract to a prospect to sign and have an appointment set for the prospect to tell you his decision, hand you the signed contract, or, possibly, start the engagement, the prospect is tracked here.

Level Four: Closed Deals -- This is the level where you track success -- the deals you've closed. In this case you won't have a future sales appointment set. So instead of tracking future sales appointments, we'll track deals that have closed within the last 30 days.

Using an asterisk to indicate a single opportunity, and a goal of two closed deals per month, a perfect sales funnel might look something like this:

L1:	*	*	*	*	*	*	*	*	8 first-time appointments set
L2:		*	*	*	*	*	*		6 next appointments set
L3:			*	*	*	*			4 contracts out -- waiting for signatures
L4:				*	*				2 deals closed in the past 30 days

To get started, set your sales funnel target by building it backwards from Level Four. To calculate your Level Four number, answer the question: "How many average sales must you close per month to meet your quota or to earn the level of income you want to earn?"

Once you have your Level Four target, do the following to set your target numbers for your remaining levels:

• Your Level Three target = Level Four x 2
• Your Level Two target = Level Four x 3
• Your Level One target = Level Four x 4

We use these numbers, because to close, for example, two sales per month, most salespeople must send out four contracts for signature. And to get to the point of delivering four contracts, most salespeople must go through the entire sales process with at least six prospects. And to get six prospects to fully engage in a sales process, most salespeople must meet for the first time with at least eight prospects. These are only averages, of course -- you will adjust your own numbers in the coming months as you track your sales funnel this way.

So, determine your target sales funnel this week, and next week, we'll get started measuring your actual sales funnel against this target.

Silver-Bullet Secret (Part Two)

In one of our May 2006 visits, I asked people to answer the question "What is the silver-bullet secret to becoming a sales rainmaker?" Following are the many responses I received:

---

Be the best you can be.

Rudyard Kipling once wrote: "I have six faithful serving men, who taught me all I know. Their names are: What, Where, When, How, Why and Who?"

Tell the truth all the time.

I believe that if all other factors are equal, good diagnostic skills can separate me from the others who merely "puke" out features and benefits.

Be totally honest at all times!

"I promise it will get done?" ... and then following through on the promise, of course.

Can I be useful to you?

Be there, 100%, with your client.

Find out what the customer wants.

There is no silver bullet ... but lots of salespeople constantly look and wish for one. Activity = Results. Period. End of story.

Always do what you say ... Give from your heart ... Honesty, Integrity, Compassion, Empathy, Connection, Truth

1. Always do more that what is expected.
2. Give value first.
3. Nobody cares how much you know, till they know how much you care.
4. Practice Emerson's Law of Compensation ... Give freely and totally to those who are counting on you and everything else will take care of itself.
5. You have to fail in order to succeed. Otherwise you don't really know if the success was from inspiration or just a happy accident setting you up for bigger failures down the road.
6. It's okay to fail, it just teaches you one way that you know doesn't work.
7. Thomas Edison didn't give up after 10,000 failures...Never give up on a dream.
8. If two people want to do business together, they won't let the details get in the way.

Help people look good and succeed.

Never close the deal. Signing the contract means opening a relationship. Make sure the customer knows that you think so, and that you will continue to be there as a problem solving helper.

Don't try to sell them anything.

My silver bullet is honesty.

Find out what they want first.

The silver bullet secret to becoming a sales rainmaker is: consistent persistence. I once read, "A mediocre sales process executed consistently will trump a fantastic sales process done inconsistently."

Be the best of best in asking questions but more importantly, be the best listener.

Would I buy from me?

I think one of the most important things in being successful in sales, is by "putting yourself in the other person's shoes" - that way your perspective becomes understanding and providing what's best for the individual or company, rather than being about what's in it for you.

Listen twice as much as you talk.

Providing the most valuable method of solving the client's problem.

A neutral attitude during the initial sales process. In other words not worrying about making a sale now.

Help them solve the problem they have.

The secret is that there is no secret.

People buy for their own reasons.

Make 100 cold calls per day?

I am paid in direct proportion to the size of problems I help people solve.

Attitude and never give up.

You can if you think you can!

I shall never lie to you!

Belief that you will get the sale, that you have what the other person needs. Being sincere (honest).

Giving people what they want!

Guess 1: Learning from improvement.
Guess 2: Use the law of averages to your advantage.

Putting the right effort in the right place.

See it through to the end.

Honesty, Integrity, Product knowledge, Good communication, Being the early bird are the silver-bullet in becoming a sales rainmaker.

People decide emotionally then use logic to rationalize the decision.

Bring Value that makes his life easier.

Never give up ... don't make the decision for your customer that they wont buy what you're selling. ASK!

---

My Dad's advice, on the other hand, was "Work much harder than everyone else." (It ain't sexy, but it's got teeth.)

--
Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association

The Best Education Most Never Get

Lately, I've been feeling like I stopped learning, because I simply haven't had the time to read as much as I want to read. What with growing Yellow-Tie, building the Honest Selling team and doing client work, my calendar has been so full it seemed that my personal education and growth has really stalled.

Yesterday I learned just how silly I am for feeling this way. You see ...

I'm a natural "Sammy Schmoozer" type -- always comfortable in a crowd, never shy about shaking hands and getting to know people. So a key part of my marketing effort has always been to shoot for the following every week:

• Attend three networking functions (association meetings, business openings, ground breakings, after hours functions, etc.).
• Have at least 10 one-on-one conversations (typically over coffee) with the people I meet, with the only goals being to get to know one another and find ways to be useful to each other.
• During these conversations, learn enough about my coffee partner to find three ways I can be useful to him or her. (If they reciprocate, fine, if not, fine.)

This type of marketing affords me the opportunity to build upwards of 500 new business relationships per year, all of which strengthen my personal brand, my credibility and my ability to impact my local business community.

Over the years, however, a great many people have told me I was nuts for doing this much schmoozing. But two days ago, I realized how incredibly educational those conversations have been.

For example, I am currently working on a sales audit for a company with a 30-person team. These audits always start with tons of interviews, so I can diagnose problems and begin the process of generating ideas for solutions. Last week, I completed the interviews with this client so its issues are top-of-mind for me right now.

Two days ago, I had the great pleasure of getting to know James Mittler a bit better in one of these one-on-one chats. He and I have been bumping into one another at networking events for years, but this is the first time we've managed a "be useful" conversation. During our talk, while asking Jim about his business (he's a compensation expert), I found myself framing every question in terms of my client's issues. As a result, three things happened:

1. I was able to learn exactly what Jim did, because his answers to my questions were specific to solving real-world problems.
2. I walked out of that one-hour conversation with three ideas that I can use to immediately impact my client's bottom line.
3. I learned more about compensation in that one hour than I've learned from every book I've ever read on the subject, because Jim condensed his own experiences into bottom-line thoughts.

Turns out, the vast majority of everything great I know about business I learned by taking the time to meet with anyone, anywhere, any time and learn from the people I meet.

Dad always told me that that the person who owns every hand I shake has something to teach me and that I should learn it. Looks like Dad was right again.

Trimming The Fat

In one of last week's visits, I wrote about the importance of measuring things in order to change them, and used my flabby self as an example of how just getting on the scale every day can do wonders.

Several people contacted me and asked what I was actually doing (besides getting on the scale) to lose the weight. So following is a summary of everything I do to lose body fat safely and effectively. (Next visit, I'll show you how these same concepts apply to creating sales success.)

It's Not Rocket Science; It's Simple Math

If you want to lose body fat, do these six things:

1. Weigh yourself every day. (See this post for the reasons.)
2. Throw every diet book you own in the trash. Dieting is the wrong way to lose weight.
3. Every day, eat a nice mix of vegetables and fruit -- the more brightly colored the better -- nuts, meats (unless you're a vegetarian) and carbs. Your body does not need dairy, but feel free to enjoy it if you like it. Just do your best to choose the healthy versions of everything you eat. Anyone past the age of 10 should be able to ascertain what "healthy versions" means. (Basically, if you think of potato chips as a vegetable, then you're in big trouble.)
4. Stay as far away from processed sugar as you possibly can -- don't eat more than 24 grams of sugar in any 24-hour period -- because if you eat it your body will burn that instead of fat. (FYI: A single 12-ounce can of soda has more than 40 grams of sugar, and processed orange juice is almost as bad. (The process of homogenizing fresh juice converts good sugars to bad sugars.) So eat the orange, drink water and leave the homogenized products and garbage soda products on the grocery shelf.)
5. Using the calculator I'll provide below, determine how many calories you are supposed to eat every day to sustain your current body weight. Then in an average week, eat that many calories per day. (Just short yourself six out of seven days if you want to splurge one day every week.)
6. Use exercise to burn off extra calories. (Every time you burn off 3,500 calories that you did not eat, you will lose a pound of body fat.)

Healthy choices. Portion control. Eat the correct amount of decent food every day. And exercise to burn the flab away. Like I said above, it's not rocket science, it's simple math.

Calorie Calculator

First, I am not a fitness trainer. I am not a doctor. I am not a dietitian. I am not a trained or certified expert on this subject in any way, shape or form. I'm just a guy who has been there, done that, and researched along the way.

Second, while you must know the right amount of calories to eat, and eat roughly that amount per day, you do not have to count calories for the rest of your life. Just count them for a couple weeks -- until you have a good feel for the calories in the meals you eat most often. Then count by feel after that, using your morning weigh-in as the measure of how well you did.

Third, the calorie calculator I'm about to give you was developed during the 15 years I spent making every diet mistake in the book, then researching options to find the next diet I could try and fail. It was born out of the frustration of this repeated stupidity, which is why it works.

Fourth, I'm sure there are thousands of people who will tell you this won't work, then ask you to buy their book or sign up for their diet regimen. My suggestion is to save your money and try this first.

To make use of the calorie calculator, you must know the following:

• Your gender. (Sorry, Ladies, but pound for pound, guys get to eat more than you do.)
• Your height in inches. (I'd like to take this chance to apologize to the non-U.S. folks out there for making them convert their height to inches, so the calculator can convert it right back to centimeters.)
• Your weight in pounds. (Same apology applies for the pounds-to-kilograms requirement.)
• The number of working hours you spend a week sitting, standing and lifting.

It also helps to know how many minutes a week you spend running, walking, cycling or swimming, and at what pace you do each of those things. (But you can figure that out later.)

I set the links below to automatically open the PDF calculators in a separate tab or browser window, so you can read the instructions below as you enter your information into the form in the other window.

• Males should use this calculator.
• Females should use this calculator.

1. After you open your version of the calculator, click on the "0" after "Height In Inches:" That is a form field into which you can type your height in inches. Type your height, then hit the <Tab> key.
2. Type your weight in pounds, then hit the <Tab> key.
3. Type your age, then hit the <Tab> key.

If you scroll down to the top section of Page 2, you'll see a number under Total Caloric Requirements (TCR). That is the number of calories you should ingest each day. For example, I am 71 inches tall. As of this morning, I weighed 188 pounds. And I am 46 years old. My TCR at this point is 2,019.

To Maintain Weight

One major secret to burning body fat is to always eat at least your daily TCR, because if you eat less than your TCR, you'll trigger a starvation reaction, and your body will start hoarding fat instead of burning it. To be absolutely certain to avoid this starvation trigger, include the calories you burn in a normal work week in your TCR calculation.

To do that, scroll to the bottom section of page 1, and enter the number of hours a week you are:

• Sitting. (Your cursor should be on this field.) Type your best guess, and hit <Tab>.
• Standing. Type your best guess, and hit <Tab>.
• Standing/Lifting. Type your best guess, and hit <Tab>.
• Heavy Lifting. Type your best guess, and hit <Tab>.

Be honest! But don't forget the weekend chores like mowing the lawn.

For example, my numbers are:

• Sitting -- 40
• Standing -- 10
• Standing/Lifting -- 10
• Heavy Lifting -- 0

That's an extra 384 calories I can eat every day -- for a daily TCR total of 2,403 -- to maintain my current weight.

To Lose Weight

To lose one pound of body fat, you must eat the right amount of calories (per the TCR number on your chart) then burn 3,500 calories you did not eat! You accomplish that with exercise.

On page 2 of the calculator is a chart showing various levels of running, walking, cycling and swimming. There is a Minutes Of Exercise (MOE) column into which you can type the number of minutes you exercise in each category per week. (Your cursor should be on the top row of this chart.) As you enter your minutes of exercise, it will calculate the approximate calories you'll burn doing that exercise. To ensure you burn at least one pound of body fat per week, do enough exercise to burn 3,500 calories.

My two favorites exercises are cycling and walking. My goal each week is the following:

• Walking 15 min./mile -- 4 hours or 240 minutes = 1,228 calories burned.
• Cycling 15 mph average speed -- 6 hours or 360 minutes = 5,219 calories burned.

Not that I'm ever exact, but in a one-week stretch, if I did eat my exact TCR of 2,403 calories per day, and exercised my exact amount of 4 hours walking and six hours biking during that week, I would burn 6,447 calories. Divide that by 3,500, and you'll see that I'll lose 1.84 pounds of body fat in seven days if I'm perfect. (Which, of course, I never am.)

Adjustments

If you follow the guidelines but don't lose weight, adjust your calories down or your exercise up. Just be sure never to go below the TCR number that is a result of the calculation from your height, weight and age (minus work-related stuff). And remember to eat healthy foods -- the fewer processed foods you eat, the better you'll be.

Ultimate Bottom Line: Losing body fat is not as difficult as all the experts would have you believe. It's simple math and common sense. And anyone who tells you something different, then asks you for your money, should be told to take a hike.

I'll apply this measurement analogy to sales in our next visit. Until then, here's to the wind in your hair, healthy food in your belly and good news on the bathroom scale!

Online Profit Academy

Online Profit Academy (OPA) -- advertising free 90-minute seminars to help peope learn to sell on eBay -- in my opinion, is engaged in some very sleazy sales tactics that target retirees. The seminar I attended this morning was a highly manipulative sales pitch designed to suck in the elderly who are already tight on money.

I attended because Cindy, my wife, has some pretty cool stuff she wants to sell on eBay, and she wanted me to help her figure out how. Her mom saw the OPA ad in a newspaper, so Cindy signed us up. (Stupidly, I failed to Google OPA prior to attending, or I would have seen through their trickery immediately by reading this thread.)

In an article titled Work-At-Home Scams, the AARP reports that: "Con artists pitching work-at-home schemes rake in $427 billion dollars a year. These scams are a favorite way for con artists to exploit people. They use appealing but unrealistic come-ons to lure unwary people into parting with their hard-earned money with the hope of hitting it big financially."

Since about 80 percent of the people who attended the OPA seminar were retirees, and since at least half of them seemed to be parting with money after the program ended, I felt compelled to get the word out as fast as I could.

Do not attend one of OPA's 90-minute, free seminars, because they are hard-sell pitches, not seminars. And contact your parents, grandparents or friends who are of retirement age to warn them not to get suckered into this company's sleazeball sales methods.

In our specific case, instead of a 90-minute seminar, we experienced the following:

A 76-minute sales pitch that included:

• At least 30 references to how there "just isn't enough time to cover everything today."
• A couple dozen carefully worded examples of how everyone is getting rich on eBay and living the good life.
• A 12-minute explanation of the $49, four-hour workshop OPA is selling "only today, and only while you're here."
• At least 20 mentions of the "great tools, great services and great time-saving devices" available for use, with each explanation followed by some version of "We'll cover this when you take the workshop." (For example, "There's a service you can use to find all the legitimate drop-shippers, and it saves you a ton of time ... we'll tell you all about it when you take the workshop.")

At minute 77 of the 90-minute seminar, Brandon Burbage (not sure of the spelling), finally got around to telling us the "Secrets to eBay Success." It took him all of 10 minutes and consisted of the following bullet points:

• Place buzzwords and keywords in titles.
• Pay the $1 to make your title bold.
• Capitalize important keywords you want your shoppers to see.
• Pay the $.35 to use a gallery photo.
• Start and end your auction during prime-time hours (7-9 p.m.).
• End your auction on Sunday or Monday.
• Include shipping costs and use flat-rate shipping.
• Don't forget about the losing bidder -- if you have many of one item to sell, contact the people who lost and offer them a second chance to buy.
• Disclose everything.

After this 10-minute quick-dump, Brandon relaunched his sales pitch, which took another 25 minutes to complete -- running over the 90-minute mark by a full 22 minutes. (Throughout his entire presentation, Brandon put a very strong emphasis on the importance of having your own website, complete with shopping cart and merchant account. Lo and behold, OPA builds websites and supplies merchant accounts -- go figure.)

It's that last bullet point that really burns my butt, because if OPA actually practiced what it preaches -- full disclosure -- its newspaper ad would have to read something like this:

We'll spend 102 minutes of the 90-minute session trying to convince you that, if you don't buy our $49 workshop, you'll miss out on the millions everyone is making on eBay. And in the other 10 minutes, we'll give you a bullet-point list of eBay secrets, all of which (and thousands more) can be found if you simply search Google on "eBay secrets" instead.

Obviously, I haven't attended the $49 workshop myself. But I've seen this type of sleaze before, and I'll bet dollars to gas gallons that it's at least 50 percent sales pitch designed to suck the unsuspecting into parting with thousands of dollars more, and I am certain that few, if any, experience anywhere near the level of success OPA suggests is easy if you follow its program.

I'm all for using free seminars to market your wares. And anyone who does it should, of course, include a sales pitch and an escalating level of next-step services attendees can buy. But any legitimate company can provide a truly great free seminar with true value to offer without resorting to this type of manipulation.

To Change It, Start By Measuring It

About three years ago, for reasons that still escape me, I stopped getting on the bathroom scale every morning. Over the following six months, I went from 175 pounds of lean, mean cycling machine, to 200+ pounds of flab that totally demoralized me every time the cyclists with whom I ride dropped me like a rock at the bottom of the first hill.

On June 6 of this year, I finally got fed up with myself, so I started getting back on the scale every morning and recording what I weigh. (Note: That is the ONLY thing I measured.)

Here are the results of those weigh-ins:

Week 1: 204, 202, 202, 201, 200, 199, 201
Week 2: 200, 200, 200, 200, 198, 197, 196
Week 3: 196, 197, 196, 196, 196, 195, 194
Week 4: 194, 194, 194, 194. 194, 195, 193
Week 5: 193, 194, 193, 193, 192, 193, 193
Week 6: 193, 192, 192, 192, 191, 191, 191
Week 7: 191, 190, 190, 190, 189, 189, 188
Week 8: 189, 189, 188, 187, 187, 187, 188

I know as I face my food and exercise choices today, I also face the reality that tomorrow’s weigh-in will be the direct result of today’s choices. (Note: Cindy and I had pizza last night, hence the 188 this morning.)

This same measurement concept, by the way, applies to prospecting, marketing and selling. For example, to improve your sales funnel, add this one measurement to your funnel tracking:

• The prospect is in your funnel if, and only if, your name is in his calendar at a future date and time.

Look at your current sales funnel, paying particular attention to your next appointment date with each prospect. If it says "call sometime Thursday" or "touch base in a month," you may be selling, but that prospect is not buying. (When you know you don't get to count a prospect as in the funnel unless your name is in his calendar, you will naturally start asking for specific appointment dates -- and you'll start getting them.)

If you want to change something measure it objectively. Then make the choices today that will positively affect tomorrow's results.

And don't ever stop.

--
Gill E. Wagner, Sage of Selling
President of Honest Selling
Founder of the Yellow-Tie International Business Development Association

Giving First

This past week, out of the goodness of his heart, Matthew Homan, of LexThink, spent almost three hours with me explaining the differences between posting articles in a blog and posting them in HTML format. With his guidance I was able to initiate my blog, redirect the sageofselling.com URL (so I could change blog providers some day without losing my links), build the transition plan from HTML articles to blog entries, and get this past year'sarticles and book reviews converted (including setting their actual creation dates).

Never once did Matt ask, "What's in it for me?" Never once did he make me feel like a techno-weenie. Never once did he allow himself to be interrupted by a phone call or e-mail from someone "more important."

I've been involved in sales and selling for 34 (ugh) years. And while I've known many who also practice the "give first" model of relationship-building, I've encountered very few who live and breathe this philosophy -- who have it ingrained in their very souls.

It may be Matt's energy and creativity that turns his retreats into blow-your-doors-off experiences, but it's his attitude that will make him truly rich.

Thank you for your generosity, Matthew. It will never be forgotten.

Gill