GoldMine makes forecasting business extremely simple. It will also present our forecasted sales or opportunities in the form of a “funnel” analysis or report. Let’s consider the benefits of this type of representation of our sales pipeline.
By virtue of associating a probability with each sale in progress we can generate a sales funnel. A sales funnel lets us view how much business is in our pipeline at each level of probability. But first the company must decide on the definitions and basis for selecting the probability. Some firms have the sales person subjectively indicate the closing probability.
Since sales people’s instincts vary from overly conservative to totally unrealistic this method is fraught with problems. To minimize these subject swings firms prefer to have the probability correspond to specific stages in the sales cycle. Plus, this will enable much more intelligent reading of the sales funnel. With a funnel we see the amount of business in the pipeline at each stage in the sales process. One advantage of using GoldMine’s “Opportunity Management” tool to track deals is that is offers the ability to track both the sales cycle “Stage” and the “probability” of closing. Either way, sales management should recognize that the more options they give for stage and probability, the more time consuming it is for sales people to update their pending transactions. From a practical standpoint, less is more!
A sales funnel is not just a tool for evaluating the performance of a sales person or sales force. It’s a way of predicting the future. Business ups & downs impact various departments including production, delivery, customer service, even purchasing and accounting. Having some advanced notice, via the sales funnel helps them to prepare for the future and manage their processes and resources.
An equally valuable benefit of funnel analysis is that it can give us early warning signs that our marketing or sales efforts are ineffective. Also, it may indicate changing market conditions we need to adjust to. In more ways than one, a sales funnel can definitely help us to manage smarter.