The sales funnel is a visual representation of the way potential customers move from being prospects to paying clients. Unlike the pipeline, it acknowledges that there will be leakage at each stage in the process where prospects are lost for one reason or another. There will always be more potential customers out there than actual customers, whatever business you are in.

A growing business needs to swiftly and smoothly move prospects through the sales funnel, plugging as many of the leaks as possible to increase its conversion rates.

Your sales funnel can be long or short (depending on the number of stages you expect to move your prospects through to win their business), wide or slim (depending on the number of prospects you’re attracting into your funnel), top heavy or almost cylindrical (if you’re really lucky), because it is as individual as the sales strategy of your growing business.

So how does this help? Any business needs to be able to assess its progress against its sales targets and establish effective ways to improve its conversion rates.

The sales funnel can provide such information. By knowing how many potentials enter the top of the funnel and how many customers buy at the bottom, you’ll be able to calculate your real conversion rates. What’s more, if you take more detailed figures from each of the different sales stages you’ll be able to see where the biggest (or most avoidable) leaks are occurring.

This information is invaluable as it allows you to adapt your processes and strategies (changing the structure of your sales funnel) to increase efficiencies. This way the sales funnel becomes both a process and a monitoring tool.

Of course, all this will be in vain if you can’t get enough of the right kind of prospects into the top of your funnel. If too many of the people who enter the funnel are time-wasters, then man hours, stationery and other resources will have been unnecessarily exhausted.

To do this, first you have to understand what you are looking for in a customer. Through profiling your ideal customer, you will be better able to target your marketing efforts towards them.

Stopping the leaks

While you can’t please all the people all of the time, you should try and adapt to your customers’ needs, and part of this is understanding where you’re losing their interest.

Is it your price, your sales people, the quality of your product or the after sales service that they don’t like? Analysing your sales funnel and the customer figures that you gather from each stage of it should enable you to identify the weaknesses in your current system.

Through this understanding, you should be able to adapt your strategy to stem the outflow of potential business that you’re missing out on.

See also: Four tips to accelerate sales for SMEs – Sales professionals want to close business as fast as possible. Today, technology and data accelerate business even faster than in the past.