Below is a transcript of this week’s video sales tip.
As someone who has spent the last 15 years exploring, learning, training and consulting on the sales funnel, I often get asked ‘how important is it to know your win rate’?
It’s very important. When you know your win rate you’re able to know how big your sales funnel should be to hit your quota.
For example if you have a 1M quota and you have a 50% win rate, you should have $2M of funnel value. We call funnel value TVR, Total Viable Revenue.
But if you have a 33% win rate then your funnel should be $3m.
And if your win rate is 25% your funnel should be $4M.
Those are some big variations in funnel value, aren’t they? You don’t want to miss this by a mile.
Unfortunately I have learned that few salespeople and their sales organizations really know their win rates.
It’s easy to calculate. Create a list of all of the sales opportunities you try to win. Then list the ones you do win. The number of sales you win divided by the number you try to win is your win rate.
For example if you win 3 but try to win 10 then your win rate is 30%.
Now what I’m about to say is really important. When you calculate your funnel value you don’t want to just add up the dollar value of all sales opportunities at all stages. You add up only the deals at the mid to late stages because with these opportunities the customer has committed to making a change. That means they commit to either replacing what they’re using with something else, commit to add to what they’re using, or commit to using a different approach altogether.
If you think of your sales funnel right now, you can probably think of deals that haven’t gotten to the customer commitment stage yet, can’t you? These deals might still be very much worth your time to keep working on, just don’t count them toward funnel value.
The problem comes when your sales funnel doesn’t have enough of these ‘commit funding’ opportunities. Your funnel value is too small. Your focus and priority is to get more funnel value, TVR.
If you liked this tip and want to learn more I encourage you to contact me at the information on the screen. I’d really enjoy hearing from you.
As always, I wish you the best success, and good selling.