Sales tunnel

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A Sales tunnel (also called a Sales pipeline, or a Sales funnel to emphasise the volumetric changes in deals) is the way that both direct sales persons and SFA systems visualise the sales process of a company. In any step of the sales process prospects drop out of it, and from the large number of initially interested persons on the narrow end of orders only a fraction of the initially interested people remain and actually place an order^[1]. The structure may start at various process steps (e.g. a sales lead, or later, a sales offer) to a closed/finished contract or Deal Transaction.

The Sales Funnel metaphor has its roots in the real world use of funnels. A large amount of liquid, or sales opportunities, can fit into the top wide portion of the funnel. However, as you move down toward the funnel neck, less and less opportunities can fit.

A sales funnel is constructed by stacking several layers together^[2]. Typical layers include:

1. New Opportunity
2. Initial Communication
3. Fact Finding
4. Develop Solution
5. Propose Solution
6. Solution Evaluation
7. Negotiation
8. Purchase Order
9. Account Maintenance

New opportunities are put in the top and worked through the funnel until they either issue a purchase order, or become a disqualified lead. The key to surviving in sales is to make sure that each layer never goes empty. You should always know how many companies are in each layer. The adage is "Fat pipeline equals skinny kids." One-call closers have fat kids with better toys.

Knowing that it can take weeks or months to walk prospects through the funnel process, you better have multiple prospects at all the layers of the funnel.

So the bottom line is pretty straightforward. Make sure that you have action at all levels in the sales funnel and you'll never be desperate for a deal to close again.

[edit] See also

• Sales process
• Sales management
• Hit rate

[edit] References

1. ^ The Sales Funnel - Keeping Control of Your Sales Pipeline - Leadership Techniques from Mind Tools
2. ^ http://EngineersCanSell.com, What is a Sales Funnel?.