What is a sales funnel?

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.  These 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

The key to surviving in sales is to make sure that each respective layer in your sales funnel never dries up - it really is that simple.  You should always know how many companies are in each layer.  New Opportunities are put in the top and worked through the funnel (via a documented sales process) until they either issue a purchase order, or become a disqualified lead.

Knowing that it can take weeks or months to walk prospects through the sales funnel process, you better have multiple prospects at all layer in your personal sales 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.