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Is the Sales Funnel still Applicable?

 

In my previous blogs I mentioned the sales funnel many times. “Do not make your sales funnel fat at the bottom” is one of my most famous blogs. But is the funnel still a valuable tool for the lead to client conversion and is it only a sales tool?  

Sales Funnel as Strategic Instrument

 

Sales Management uses the sales funnel as the visualization of their pipeline. Historical data are used as benchmarks to the current sales situation. In industrial segments, many service suppliers in the supply chain have challenges using the sales funnel as forecasting of future sales volumes.  

This is often caused by the first and last company in the industrial supply chain. The one selling to the consumer has a different view on their market as all the players higher in the supply chain. The party selling to consumers is often looking at the output of the first company in the supply chain. He takes the companies in the middle of the supply chain for granted or does not regard these companies as a supply risk. All middle companies are therefore subject to the success of the first and last company in the supply chain they are part of.  

How can Industrial companies use the sales funnel?

 

The sales funnel can be used by industrial firms for coaching and managing the sales team. The targets for the individual sales person can be easily linked to the sales funnel. It is a management decision to formulate the sales funnel targets. The management can choose to have a fat top or fat bottom funnel or tight funnel all over. This will provide management input for planning their organization and resource allocation.  

“The sales funnel should not be used by industrial companies to forecast sales”  

The reason for the inapplicability of the sales funnel as forecasting tool is that the environment changes too frequent. How many prospects you require in one year to gain an x amount of sales will be totally different in the next year. The leading companies in the supply chain (the first and last) control the number of available contracts. Only by increasing your market share you will be able to influence your output.    

This blog does not provide a full picture, but might serve as input for a debate within your sales team. 

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