Prospecting, Funnel Metrics & GTR

In recent posts I have focused on messaging strategy and the 99 Questions Methodology to enable new customer prospecting efforts. In this post I’d like to discuss the topic of prospecting from a different perspective, and share with you a new partner relationship I’ve formed with Velu Pelani, CEO of GTR Consulting. GTR is a Chicago-based firm that specializes in consulting. My sales operations background complements GTR’s extensive experience doing development and customizing for clients. I want to share the story behind why I am partnering with GTR to illustrate an important sales management lesson.

We can all agree that prospecting is one of the most formidable job challenges for sales managers: coaching and motivating sales people to prospect is at best, a difficult responsibility. There always seems to be uncertainty about prospecting tactics (yes, we can stipulate that everyone hates cold calling), the amount of time dedicated to prospecting, how much prospecting is needed to make quota, and even where prospect “lists” will come from. Given this chaos, sales managers often ignore important prospecting fundamentals. Prerequisite steps are needed before kick-starting the process and subsequent pipeline management activities that take over a sales manager’s time and effort. Ignoring the fundamentals compounds this effort and creates problems in overseeing the pipeline, which I will illustrate in the story below.

Sales manager prospecting requirements came up when Velu and I reviewed a unique sales tool that extends by aggregating the opportunity pipeline into a single graphical display. The tool allows sales managers (and their teams) to view and manipulate their pipeline much more efficiently than using reports or dashboards. It also identifies opportunities that don’t appear to fit in a particular sales stage for whatever reason (e.g., they age past certain point, etc.).

One of the tool’s strengths is its extensive capabilities to calculate an “ideal” pipeline. As we reviewed the product, I asked the following question: How does the tool determine the number of pipeline opportunities that should be ideally pursued at each stage in the sales cycle?  More important, on a broader level, how do tools like this address how many deals are needed above the funnel in order to make quota?

To be clear, the question isn’t whether the tool can calculate an ideal pipeline. The issue is, can sales managers really understand and apply this information in a meaningful way? To really leverage this or other tools, we need to apply a fundamental sales management practice known in the sales and marketing community as Funnel Metrics.

Funnel Metrics helps managers understand that from the very top of the sales funnel process (where leads are generated by marketing campaigns and/or where sales people cold call), there is a certain number of customer contacts you have to work with and move down the funnel so that you end up with the desired number of closed deals, resulting in your quota. When I consult with clients, I use a diagram that looks like this:

Funnel Metrics Diagram
Funnel Metrics Diagram

To determine your Funnel Metrics, first define the current or desired sales cycle stages you have in your sales process (six stages in the diagram). Then, take your total annual revenue number and divide it by the average revenue per deal to get the number of deals you need to win in a year.

Now put that number in the Close Box (in this case, 10). Work backwards from Close to figure out how many deals are needed at each stage, and how many are eliminated at each stage. For example, it takes 13 proposals to get to 10 wins, and 25 qualified deals to get 10 wins. You do this for each stage, finally getting to the Leads at the top of the Funnel. Each stage stands on its own.

You can calculate the Probability of winning a deal at each stage by dividing the number of deals at any stage into the number of Closed deals (e.g., 10 closes / 13 Proposals = 77% close rate.

Now you have a way to see where your overall pipeline is compared to the Funnel Metrics. It’s based on your actual experience, so no one can deny it (unless you are completely re-vamping your process, in which case you can create “ideal” Funnel Metrics to start). You can also compare individual rep’s pipelines against the Funnel Metrics see how they are stacking up. You can look at performance at each stage and determine how you need to coach each rep based on how their pipeline compares to the Funnel Metrics. Finally, you now know if there’s enough Leads to close the total deals needed to make quota. There is much more you can do with this as you might expect and I’m happy to share ideas with you.

Why is this important to Velu and his clients? While the concept of Funnel Metrics is not complex, Velu realized that neither he nor his client managers have a working knowledge of pipeline and funnel metrics practices inherent in the pipeline tool we reviewed. The value of these tools (like CRM itself) comes from knowing how to manage the process and the people in the first place. Tools support that knowledge, but they typically assume you already know what to do. I can say from personal experience that I didn’t understand Funnel Metrics when I first became a sales manager. (See my previous post about Sales MANagers versus Sales MANAGERS for more insight.)

As we pursue engagements with clients, GTR and I will work together to drive greater insights into client’s sales effectiveness by encouraging them to invest in their sales process and practices, and by working with the sales leaders to help them gain valuable insights into how they can improve sales team performance. This leads to better results from and real efficiencies in managing the pipeline with pipeline tools found on the AppExchange. I am excited to be partnering with Velu and his team!

NOTE: If you would like a copy of my Funnel Metric Spreadsheet or would like to do a free 30 minute Funnel Metric exercise, please contact me by clicking here.


Ideation Selling – A New Approach to Customer Development

A television commercial recently produced for the 2014 Jeep Cherokee features Al Pacino reprising Coach Tony D’Amato’s pre-game speech from the movie, “Any Given Sunday”. He says, “…the inches we need are everywhere around us – every minute, every second, we fight for that inch…” In sales, it’s an appropriate way to think about the many tactics we use to recruit new customers, especially C-level executives. When it comes to gaining access to decision makers, what really works?

Over the past few months, I’ve had the opportunity to consider this question in my personal selling efforts, for my clients, and with some colleagues who have introduced unique thought leadership in this area to the sales discipline. Ideation Selling represents “extra inch” thinking in an industry where many leading sales training and consulting firms offer homogenous approaches to address executive level business development. Here’s some background about how this breakthrough process was conceived. Continue reading “Ideation Selling – A New Approach to Customer Development”

Introducing the 99 Questions Methodology

How to use 99 Questions to solve your “marketing” problem

Senior executives always have unique perspectives about what they think drives successful sales in their business. Perhaps it would surprise you to know that despite the fact their businesses are in totally different industries, with different business models, and different types of sales people, executives usually tell me the same thing:

“I don’t really understand what my sales team is doing to find more business”.

The words aren’t always articulated in exactly that way, but I have come to understand they are talking about attracting and acquiring new customers. In a word, they are concerned about prospecting.

Internet Buyer Behavior

We can all agree that today’s Internet-driven buying process has created new behaviors where buyers assess potential solutions by doing Internet searches, viewing websites, reading social media reviews and comments, and finding analyst evaluations. Buyers no longer allow themselves to be subjected to sales prospecting tactics like cold calling and direct marketing. It’s just more difficult for sales people to attract new customers because they are typically required to use prospecting tactics that buyers find objectionable.

Ironically, the same senior executives who complain about how sales team prospecting doesn’t result in more new customers also don’t believe they need “marketing” to solve this problem. If only the sales team would just cold call more; or we send out more direct mail; or we get more business cards at trade shows; or we just get more leads from our vendor partners – then we would get more customers.

Unfortunately, this mindset doesn’t align with what buyers want, so sales teams that execute in this fashion are rarely successful. If buyers depend on searches, social media, websites, and analysts to decide what they are buying, it seems that whatever messages a firm delivers via media channels at least in part determines whether buyers will be interested in their firm OR NOT. Continue reading “Introducing the 99 Questions Methodology”

Sales Versus Marketing – What’s the Real Conflict?

As many colleagues and sales people I have trained will attest, there is nothing more important than the sales and marketing dialogue your firm has with the marketplace.  I believe a challenge presented to most businesses is the integration of marketing content and sales dialogue, as described below in my latest guest post for CMSExpo. On May 15, I will be presenting a new approach to integrating sales and marketing messages which was created out of client experiences over the past year with 99 Questions.  My article provides an overview of the issues and  a high level overview of the 99 Questions Methodology.  I hope to see you at CMSExpo on May 15!

Sales Versus Marketing – What’s the Real Conflict?


As a content management professional, no doubt you’ve been exposed to the process of creating and delivering content for your firm (or your client) to market and sell your (their) products and services. A primary use of your CMS is to act as a delivery channel for that content. Hopefully, that content is also used by all members of your firm, including your sales team, your service personnel, or other “customer-facing” employees within your business. The reality is that in most cases, that’s simply not the case. Continue reading “Sales Versus Marketing – What’s the Real Conflict?”

It’s Easy to Do Things Poorly

Working with a variety of senior executives, sales managers and sales contributors on a daily basis provides me with many opportunities to observe how committed they are to success. What success means to me is that you must mind the details, communicate more exceptionally and do the extra work that makes the difference between average and top sales performance. It includes updating customer content and activities in CRM when you know that takes extra time and effort, always sending a brief but appreciative thank you message to a potential customer, or going the “extra mile” when a customer makes an unusual request.

In Sales, it’s easy to do things poorly.

Continue reading “It’s Easy to Do Things Poorly”

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