It’s the start of a new year! Where do we begin?

It’s the start of a new year, by now you’ve set your sales target and are ready to take on the world. But how is the funnel looking? Odds are its probably not big enough and is never growing fast enough. So, where do we begin?

Q1 is the time to plant new seeds and build your funnel

Given that you had good visibility into Q1 when you built your plan, you likely have your first quarter all set up and should get through Q1 just fine. So your first quarter needs to be about funnel building. Nemawashi is one of my favorite expressions, it loosely translates as “plant a new seed every day”. Essentially, laying the groundwork for future yields. This is what Q1 should be about, putting new initiatives in place to grow.

How many seeds do you need to plant?

Great question, you need to figure out just how much of a gap you have between the funnel and hitting your targets, so really you have two things to think about.

Velocity: What is the run-rate of funnel creation I need to hit my targets?

Acceleration: How quickly can I create funnel to close any gaps between what I need and what I have?

Lets talk about a few key factors that influence this conversation

Win Rate: If you haven’t already, you’ll need to get a handle on this number, and really look at it in terms of product line, rep, territory, industry, or other factors. But for the sake of it, lets assume you win 30% of your deals. That is for 10 deals that are either won or lost in a quarter, you are winning 3 and losing 7. That’s a pretty fair number to work with.

Push Rate: What percentage of deals push? Most software companies push 100% of their deals. This means that if you originally forecasted a deal for Q1, 100% of the time if that deal is won, it is won later than originally forecasted. That’s not all bad. A push deal is better than a lost deal any day of the week.

Funnel Coverage: To accommodate for push rate and win rate, lets assume that in any given quarter, you need to have 4X that quarter’s target as your funnel’s value in that same quarter. You can debate if that number is 2X or 3X or 5X but its definitely not 1X which would imply you win 100% of your deals and never ever push.

So, with all this stated, how much funnel do I need to create?

In this example, we have a company with a $1M target per quarter. With a 4X funnel coverage, that means that you need $4M in the funnel expected to close in that quarter But do you need to generate $4M of funnel each quarter? Maybe not. First, you are walking into the year with a funnel. Second, a bunch of the deals from this quarter will push to the next quarter.

So what is my funnel gap?

In our example, the company is fine for Q1 but needs to find $3M for Q2 and then $4M for Q3 and Q4. Now, lets add another complexity. If you are a B2B SaaS company its most likely that your deals take a while to close. If your average sales cycle is greater than 90 days then you need to build funnel in quarter prior to the quarter you want to close that deal. So this puts extra pressure on companies that:

Ramp up their Targets from Q1 to Q4. Ramping targets from lets say $1M in Q1 to $2M in Q4 has a multiplier effect on funnel creation. It means that this company would need to have a $8M funnel by Q3 which most likely exceeds their current rate of funnel creation. This puts more pressure on the business because funnel creation needs cash investment well in advance of seeing the reward.

Enter the year on targets that are greater than their forecast. If you set a Q1 target greater than the Q1 forecast then you are putting yourself under more pressure to fill funnel gaps.

How can you build funnel quickly and cheaply?

Now you know what the funnel value needs to be and when. If you have a sense of how much funnel you are creating, you’ll also know what the gaps are. So how can you fill them? Here are two overlooked honeypots that are sitting under your nose:

Reworking Lost Deals

Go through your old opportunities and re-engage. Seems obvious, but most of the time this basic task isn’t done. It could be due to rep turnover, or pride, or laziness, or being too funnel fat. Whatever the reason, get on this immediately. Want to have some fun? Let all reps pull from this pile of honey, regardless of who lost the original deal. Open season!

Referrals

Are your reps actively asking their customers for referrals? Don’t have them ask “Hey John, know anyone that would want to buy our stuff?” That never works. Be more specific. Select target accounts, figure out who John knows based on their LinkedIn connections, and ask John for specific introductions. Why would John say no? Focus on all of your NPS promoters, they are dying to help you out but might not know how. I once read a quote from Mark Roberge of HubSpot success that the win rate for opportunities the first time they hit the funnel is 25%, its 45% then next time they re-enter, and 78% the third time they enter. Never give up on a deal, even if its lost to a competitor.

Targeted Account Strategies

Put in place a targeted account plan. Have each rep identify 20-40 accounts they want to target, and build a targeted account strategy. If you close an account (won/lost), add another to replace it. Ensure a steady amount of activity related to this plan and coach against it every week. If you want to get super fancy, align with marketing and put in an account based marketing strategy. You can do it effectively with little investment.

Increasing Outbound Activity

Good reps don’t do enough outbound activity because they are already maxed out. Bad reps don’t do enough outbound activity because they lack organization, time management, or motivation to succeed. Either way you cut it, your outbound activity is never high enough, ever. Automating this outbound activity through sequences can create significant uptick. Make sure to properly account for first touch and last touch lead sources so that you can track the source of the funnel creation.

How can TekStack help?

• Pre-built dashboards to gain visibility into the funnel, understand conversion rates, win rates, push rates. To see where the business is performing and where it is not.
• Automatically identify accounts as ready for re-prospecting making it easier to put lost deals into nurture campaigns, and identify them for future re-prospecting.
• Built in NPS surveys to identify your promoters.
• Easily mark targeted accounts and build sales plays.
• Run outbound sales motions with an integrated Sales Engagement platform.

Interested to find out more? Talk to us to book a demo!