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ok today we're talking about the sales pipeline or the sales funnel those words are often used interchangeably so it's important to know what the sales pipeline and the sales funnel is this is one of the core concepts in all of selling whenever you sell anything in fact even the things that are involved in sales and you're gonna have to know what this is and what this concept is it's important because it helps you organize the sales process it helps you look at individual deals and therefore helps you move individual deals along and closer to close if you use one of these things to organize what you're selling and what you're trying to accomplish you will be massively more productive than if you do not so it's a key concept to understand itself and it's a call to funnel one of the reasons it's called the follow us because it takes this shape which I'll explain in a little bit a little bit here but this shape is important because it speaks to how use you talk to the customer and how their customer progresses through your sales process not everyone of course buys your product so what happens to those customers along the way and where you potentially losing customers are doing well so what is it it's a funnel that shows sales progress it shows hot we're from a customer that starts as just a random target that you've never talked to before and then progresses all the way down to being a paying customer that's what it is it's built of tiers that are measurable these tiers which we'll talk through your moment should be guesses these are measurable things about clients progress through the sales through the sales process that you can measure the more measurable the better and we'll talk about how you make those up and how you decide what those are for your business but that's what these things are their tears that measure progress and essentially what this allows you to do is it allows you to track any individual deal you should be able to grab any individual account or prospect and say that's where this do in the pipeline and also it allows you to show a collective dashboard so you can say in general here's what's happening amongst hundreds of active potential customers so the dashboard is important for reporting and for other reasons which we'll talk about them a little bit it also establishes another really important concept to understand which is called sales ratios ratios we'll get to sort of near the end of the video but that's talking about this you know how many people are at each step and what does that mean for my business you can create ratios based on where people are in the in the process how far along during the sales process they are also it because now you have this dashboard you have sort of a visual representation of what's happening inside of your sales process you can diagnose problems and recommend solutions for those problems so you can say I'll show you examples of how you can clearly diagnose when part of your sales process is broken or failing and then also it'll help you it'll drive reporting planning and production decisions because you'll be able to see into the future once you get good at this you can say I will have a much higher probability of saying that I'm going to close X number of deals in the near future and therefore I better tell my production people to ramp it up or my planning I need to hire a new employee or customer service rep or any of that stuff that's all driven out of this process the better you get at this the better planning and business decisions you will make associated with sales and also the better you'll get at reporting things to your investors and to people in your company and guessing at how much revenue you're gonna generate so super important concept I can't stress enough how core the sales funnel and pipeline is to the sales process it's probably the single most important thing you will learn about organizing and also one of the easiest things to do about organizing your sales process so let's talk through the funnel that we have on the board right now and then in the second part of this video we'll give you some examples and some specifics around us so this is a typical foam what I've done is that no right way to do this phones can be done in many many ways and you have to figure out how to match your sales criteria and your progress criteria of your own business to the phone Falls will very rarely look alike so what we're looking at here is this is one example of sort of generalized final structure and this is another example of a generalized final structure you'll notice they start with the market on top meaning everybody that you could possibly sell to it doesn't even mean whether you've talked to this customer or identified that customer by name you should have a guess based on your studies of market sizing you may have segmented those markets and you may have different types of opportunities out there so you could have more than one pipeline inside of a company or one master pipeline to show your company's progress but the market represents any pre-qualified customer each customer that you haven't talked to you even know what they want you never know whether they like your product they're just out there now you're going to move to a tier that adheres called qualified and what that means is you've talked and had some interaction with them below that would be defining meaning now I know exactly what they want what product they want over a period of time developed might mean you've talked to everyone in the company you've done presentations you know all the key decision makers selected means they've moved toward a decision and they verbally told you hey this is what we want to do by no means the end and then closed means you have signed a contract and again you were gonna hand some of this off to your production team or whoever it cement pens of its of the product or if it's the software or what have you but there's always a handoff to production or shipping and then also you got you have to get paid sometimes customers want to pay you so that's part of the process so this is a very generalized piece here's another general look at it you know I made an initial contact with a customer I had a meeting with the customer and did a presentation and their proposal they approved the process I got a contract and I built they pay so you'll notice these are just tears really important to define what these tears mean in relation to your business exactly does it mean that you've issued a document does it mean that you had a conversation with a specific person in the company you have to put specific definitions around these and don't make them guesses or probabilities because sales people will have very different ideas of how likely a deal is to close instead if you put actual qualified things next to this I had a online demo I actually conducted an online demo they told me flat out what product they want they saw all of my products so they know what the product at work i spoke with all of the decision makers in the company i know who they are and i can name them and i've had conversations not i know who they are and yeah i have to have a meeting with them but specifically that you've executed actual actions documents measurable things allow you to take a lot of the guesswork out of how far along these companies are so then what are these numbers mean in the middle these numbers mean that you know there's two thousand in my market and maybe only a hundred of those I ever could talk to forty of those I never do a presentation to twenty five you know get a proposal five say yes they want it for actually sign a contract and only three painting that's the core idea behind a sales pipeline is that you may start with a hundred conversations and only three of them end up closing that those numbers in the relationship between those numbers about how companies are progressing through your pipeline is what establishes ratios and this is a super important concept around the sales pipeline which is there are lots of things by the way that flow out of the pipeline we'll talk about the second video but one of the most important is these ratios what these ratios mean is how good in mine at moving companies along through my sales process you wouldn't notice if you didn't track this stuff and if you didn't set these define levels you have no way to so in this case we've got 100 people at initial contact so uh mm that means I've hit 5% of the market 40 people get a meeting so 40 out of a hundred means that 40% of the people I talked to ask for a second meeting that's pretty good so how many get a presentation 25 you know a proposal 25 on Authority are unsired presentation 25 out of 40 63% of the people that talk to me ask for a proposal and then if the people have asked for a proposal only 20 percent actually get it approved and then of the five that are approved four out of five I actually closed so 80% so if I get him to this approval process it's really high probability they're gonna close and then four out of five 80% have the contract and then three pins so I'm not very good at collections so basically these ratios can tell you what you're good at and what you're not good at where are you losing a lot of accounts and then where are you very good at transition you know arguably 80 percent I'm really good at closing the deal once I get approval and I'm actually really good at getting a proposal out there and you can start to measure sort of where your processes are they're succeeding or breaking down that's the whole point in the sales pipeline and we'll talk about more specifics in the second video