Use this proven system to maintain consistent sales results month after month.
The Sales Funnel provides an invaluable resource for generating continuous sales by having enough prospects in various stages of solicitation at all times so that your agency can avoid famine after a severe busy period.
THE SALES FUNNEL:
Suspects
Prospects
Sales calls
Proposals
Sales
Agents who track their producers’ sales records develop a variety of ratios that become valid when they’re measured for a 12-month period (or on a rolling 12-month basis).
- Hit Ratio: the number of proposals that result in sales.
- Proposal Ratio: the number of proposals made (presenting product and pricing to the client) that lead to sales calls.
- Sales Call Ratio: the number of Sales Calls generated through Prospect contacts.
- Prospect Ratio: the number of Prospects (expiration dates and decision-maker names) gleaned from the 'Suspect' group of potential customers.
For example, a producer with a 40% Hit Ratio, 50% Proposal Ratio, 25% Sales Call Ratio, and a 20% Prospect Ratio will need 100 suspects to create 20 prospects, five sales calls, 2.5 proposals, and one sale.
Remember, these ratios only work after you’ve accumulated information for a year or more to establish true averages. Averages change based on shifts in market conditions, target markets, skills development, emotional problems, and a myriad of other issues. However, if you’re looking for a base on which to help a producer develop consistent results, long-term ratios are the best you can hope for.
The Sales Funnel also allows you to control the workload capacity of producers. In the example above, the producer will average five sales calls, a little more than two proposals, and one sale each month. This sounds like a pretty light load, unless the producer must also market, perform customer service functions, take inspection pictures, and change light bulbs in the agency. If you want a producer to close several sales each month, you must use the Sales Funnel to assure that they’re as busy as you want them to be. Focus the producer on selling and increase the load into the funnel. Doubling the suspect load will inevitably double activity and results.
Although you might experience periods with no sales, the law of averages should hold true. If you run into a dry spell, you’ll have multiple sales later. If your average has been developed over time and you don’t change the conditions under which you market and sell, you’ll eventually achieve your average results. Similarly, just because you hit on three or four accounts in a row, don’t stop putting suspects into the top of the funnel. If you do, the activity will eventually stop due to lack of potential customers.
Some agents are at the point that they only take referrals. They might think that the Sales Funnel doesn’t apply to them because they have no flow of suspects. These producers fall into two categories: Active or passive.
Active producers contact their clients constantly and touch prospects referred to them several times a year (even if they don’t write them in the first year). They’re proactive and they’re still in the sales game. They should still keep their ratios, but the beginning of their funnel is “Customer Contact for Referrals” resulting in Referrals (prospects). The rest of the Funnel remains unchanged.
Passive producers are reactive. They don’t control their sales activities. They visit the same few client/friends a few times each month, and they won’t get enough referrals to keep them active. These producers might be quite successful, but they have enough customers and income to support themselves and are no longer active in sales. They’ll sell if a referral comes to them, but they no longer solicit them.
The Sales Funnel only works for the proactive producer whose goal is continued and ongoing sales.