By Jack Warkenthien, CEO of NextStep Solutions
Selling is NOT Prospecting & Prospecting is NOT Selling
Less than 20 percent of the average sales professional’s week actually involves selling something! Said another way, a sales representative is being paid for one of five days a week and working free the other four. This low percentage may seem surprising since sales compensation plans pay for sales results not hours spent prospecting or a myriad of other administrative activities. As we continue our journey of taking the CHILL out of Cold Calls, you have two challenges to address: Increasing the amount of time invested in sales efforts and increasing the effectiveness of each selling hour.
Your Sales Funnel – TOF, MOF, & BOF
An ageless iconic symbol for a sales pipeline is the Sales Funnel. The beauty of a Sales Funnel is its simplicity and ability to tell a story in one picture. There are three distinct sections: TOF (Top of the Funnel), MOF (Middle of the Funnel), and BOF (Bottom of the Funnel). Allow me to explain and describe each component.
TOF: Remember the statistics from the opening paragraph? In essence, 80 percent of time spent is working to fill the top of the funnel with leads sourced from phone prospecting, referrals, networking, marketing efforts, web inquiries, and other sources. The sales efforts needed here are dedicated to turning contacts (leads where no relationship yet exists) into candidates (qualified contacts with buying potential). Over time, you’ll need to figure out how much TOF it takes to ultimately deliver BOF results – customers and clients that fall out of the bottom of the aforementioned funnel.
MOF: As each lead descends into your funnel, there are defined stages they pass through and each stage becomes a key metric or KPI (Key Performance Indicator). For example, let’s say that you are enjoying a record number of sales over the past few months because you finally quantified your sales activities needed to generate sales results. Now, if one hundred contacts were added to your TOF, you’ll gain one new customer/client from your BOF. To describe your MOF, for every 100 prospecting leads, you will have 15 qualified candidates. Of the 15 candidates, you’ll confirm 10 appointments. For every 10 appointments, you’ll generate 6 proposals. Finally, on average, one customer/client will be gained.
BOF: This is payday! You are compensated for your sales, not for your time spent in the TOF and the MOF, but for your time invested in the BOF. Sales are a numbers game and I challenge you to know your sales equation. In fact, if you can’t answer the question, I kindly suggest you run not walk to your company history and figure out your answer: How many contacts must be dumped into your TOF to be processed in your respective MOF to finally fall out of your BOF?
Your mission, should you decide to accept (channeling my favorite TV show, Mission Impossible, from the seventies), is to review and evaluate your current sales leads generation system and ensure you’re focusing on warm, hot, or even smoking hot leads instead of the cold/cool ones generated from cold calling. This is the only way you can increase the effectiveness of each minute invested in sales related activities.
In my next article, I’ll teach you how to recognize your best source of leads. Have a terrific month and I’ll “see” you next time!
Jack Warkenthien, CEO, NextStep Solutions, can be contacted by email at