Mastering Sales Funnel Optimization: Key Insights for Sales Leaders in 2024

It's our Joe with us. Hey, Joe.

Hey, good to see you.

Pretty good. Very happy New Year, by the way. This is the first time that we are meeting in the New Year. How has it been for you?

It's— I always love fresh starts. It doesn't matter what it is. And really, any day can be that. But when the whole world just resets on January 1st, I always enjoy that. A lot of people are coming back from holiday time. And so it feels like sometimes business restarts right there. And so I like when the conversations are starting up. So it's been really— it's been fun and exciting on my side of things.

That's amazing to know. So Joe, today's topic for us really is last year, a lot of sales leaders that we talked to, I'm sure, I think the same thing for you as well. They focused a lot on what we call as, how do I build my pipeline? How do I close more deals? And how do I really contribute towards bringing in the top line, the revenue aspect of it? And one of the kind of deeper topic in actually achieving those outcomes is basically to say, how are we managing our funnel? And a lot of discussion has really shifted to saying, how do I optimize our sellers to do the best in going through the stages of the funnel? And with that as a high-level topic, I just want to hear from you on what you have learned and seen last year, and especially getting into 2024. There is a lot of focus that everybody is having on the funnel.

Can you throw some light on Yeah, I actually think this is a permanent thing. This is always going on. And I know in most organizations that I interface with, when you get into their CRM, I'm going to call it CRM hygiene, right? Their CRM hygiene is terrible. They'll put a lot of information in there. Again, when you're talking about funnel, especially top of the funnel, usually is a broader amount of people. So more volume at the top of the funnel than the bottom of the funnel, thus the funnel. But this concept of like, how do I track and record everything inside of the CRM so that I'm doing an effective job with the things that are in my world? And so I'll see salespeople put things, put deals in the pipeline or contacts in the system, leads in the system, and then they have no activity with that person because it's out of their mind. If you're not, if you're not thinking about it constantly, especially with a higher volume of people, you cannot track that. in your brain. You need to have your CRM that's doing that. And so oftentimes I'll do just like a pipeline health status check.

Yeah.

And I'll find deals that haven't been communicated with in a long period of time. There's no next activity that's scheduled for them. They're not just going to magically remember that. And so if you're using— and I don't know about all of the CRMs, we've been using HubSpot a lot with a lot of the companies that I work with. And HubSpot does a really good job of in your deal pipelines, It's like color coordinated. You can see like literally at a visual glance, you can see if it's normal background with white, then it's like up to date.

Yeah.

Current. If it's grayed out, that means some period of time. And I think you can select what that is. I think it's an adjustable or you can format it different ways. I think the default is 2 weeks. If it's been more than 2 weeks since there's been communication with them, it turns gray. Or if there's no activity scheduled. And that's always what I'm looking at. I think that's the first thing is like, before worrying about everything else, be hyper-focused on the deals that are in your current pipeline. And what are you doing to move people through that? How are you showing up and adding value in their world in a meaningful way that causes you to come back to the top of their consciousness? Does that make sense?

Yeah, yeah, yeah. Just a follow-up on the exact thing that you said, Joe. The pipeline hygiene is very important. I think everybody knows that, but however, I think based on the sales team culture, sometimes sellers are not ready to come to their sales managers or VP of sales and say, hey, you know what? There are these 10 deals that I have that are bad, that probably are not really our ICP. Somehow they are there. I want to remove them. Because there is always that fear that, oh, if I remove them, then the pipeline is going to get shrink and then I have a negative effect on that. How do we really deal with such situations? One, of course, is the cultural aspect of it. But let's say if I'm the seller that I realize that out of my 10 deals, 4 are like, probably it doesn't even make sense to pursue them.

Yes. So I used to call this list hopium. It's this, you have this hope.

That's a nice one.

Hope that someday this will close. The truth is it's never gonna close. It's either the wrong fit, it's the wrong person, for whatever reason. That's not what excellent salespeople do. What excellent salespeople will do, they'll analyze their pipeline and say, how real is this? Like, you get rid of all the— I'm just gonna call it the crap, right? All this crap, get it outta my world. I don't want my focus To be diluted across all of this hopium list. Get real with the people. Do you really have a plan of action for each of the people in your pipeline? If you've got a plan of action, that's not a hopium list. It's I know what I'm doing with them. I know what they're doing to work with us. So this is a little bit where I'd say rip the bandaid off. If you've got an overinflated, unrealistic pipeline, all that does over time is just erode for you as a sales leader. It just erodes everyone's confidence in you. It's oh, we've got a million and a half pipeline. No, you don't. You've got like seventy-two dollars in the pipeline. Let's get real about this and go fix what's needed. If we need to open up marketing more, we need to generate more leads or whatever it is. Get really real about what's in your pipeline, and that I think this is a top-down kind of thing. So if you make your salespeople feel comfortable because they have a bloated Yeah. Overly inflated pipeline. Like, you don't wanna make them feel good about that. Like, welcome processing people through, get through quickly. But for everyone who is in there, have a plan of action. And the way you can test this as a sales leader is ask your salesperson, pull, pull up their pipeline live with them and go just anecdotally pick a few of 'em and say, what's your plan with John? What's your plan with Sally? What's your plan with this person? And you'll start to get to a sense of, If they're just BSing you, you'll uncover that really quickly. And if they are, okay, let's just deal in reality and let's get a plan of action for everybody.

Right. Which is basically to say, if I'm a seller, I think it is actually in my best interest, by the way, to really look at my own pipeline out of, let's say, these 10 opportunities that I have. There are 4 that are stale. No matter how much I'm trying to drive value, they're probably not coming back either because of various reasons. They're probably not in our ICP, or they just onboarded a different solution, whatever that case might be. If that is the one, it is in my best interest not to spend wheels on those opportunities. But whereas look at the high activity opportunities where the prospect is interested, they are really actively considering our solution, and then When you focus your energy on them, that is exactly where you get the high ROI rather than saying that, oh, I have 10 opportunities, I'm working on all of them and trying to communicate with them on all random chances. And that's also one thing where I would say sellers actually burn out, right? It is one thing to say, yes, I have these 10 opportunities, but it is okay to say I have these 5 active opportunities. And work on it and close one of it much faster way compared to working on all 10 of them. And then probably you don't really see a way to close any one of them.

Right. It's just, you know, getting what again goes back to what's the plan, you know, because I would, as a sales leader, I would be fine if a salesperson comes to me and said, if I asked them about a deal and they say, so I haven't spoken with John in 2 months because of this, some rationale, here's what the plan is with them, they're working on X, Y, and Z. I'm okay with it being far out. I don't need it to be fast. I just need it to be real. And I think that's where oftentimes this is— salespeople who tend to do that also tend to avoid the real conversations with their prospects. So when they're talking with somebody, they're continuing to kick the can down the road. They're not following a process. They're just, what's the point of the next meeting I have with this person? I don't know, just to keep the conversation going. That's not a good plan. There's got to be a process that you're following that I have this meeting to accomplish these objectives so that we can get to this meeting where we accomplish these objectives so there can be a decision that's made. And salespeople who tend to keep over-bloated or overly inflated pipelines also tend to avoid the real conversations with their prospects, which is not easy. But when they provide some feedback in the form of an objection, oh, that's too much for us, or that's going to take too much time, or I need to talk to my team about this. You better get down to what's really going on. Like you, you've got to follow tried and true protocols in the sales world. Isolate that objection, tie it down, work with them to create a plan to get there. But what a lot of people do, salespeople do, is they avoid those conversations because they want to feel good about this bloated pipeline that is never really going to happen. So I think this is a mindset more than anything else. It's like the mindset of a clean database, you know, that CRM hygiene. Keep that pipeline really clean and have very real conversations with your prospects that actually move them forward.

Gotcha. So now coming back to our original topic, which is, let's say I'm going through the funnel, I have this pipeline, and then I have a plan as to how to communicate, how frequently should I communicate. There is a demo after that I need to follow up, maybe based on how big the solution is. There is a Proof of concept, the solutioning and all those steps. Let's say somehow you define your funnel. How do we really identify the leakages in the funnel? Or when we know that, okay, a lot of, let, let's take a specific example of I've done a lot of demos, but then after the demo, things are not moving forward.

Mm-hmm.

And now the number one thing, how do we identify such? Number 2, how do we fix those things?

So if you don't have— if your funnel looks like this vertical, right? So every lead that comes in just gets— that's not a funnel. And that's what a lot of people do. It just ends up being a bucket where it doesn't go anywhere. Nothing's going out the bottom. It's just, it's actually just a bucket because everyone goes in. You need to lose the deals at the appropriate stage. So I'll just invent a hypothetical scenario where your sales process is you have some kind of lead flow. They come in. You have a connection call. You're just like connecting, you're learning about their business, you're telling them about yours and seeing if there's a fit. If there is, then you might have a discovery call that goes deeper into the solutions that you provide to see if there's direct application. You might have a demo that's thrown in there, and then you've got a follow-up call to close the deal. So let's say there's those 4 steps. If everyone who is a connection turns into a discovery call and you don't lose deals along that process, you're not being honest, right?

Yeah.

Because not everyone that you connect with is going to be a fit. So, when it's appropriate, you create that deal as the lead comes in. And then when you determine this is not a fit or they determine, I don't want to continue the conversation, lose that deal, like closed, lost, and then put the reason in there. Not a fit, not enough money, whatever it might be. Like, put those— that's— you create the leakage. You actually want it to leak at the place where it's supposed to leave your funnel. But that's not what I see most people do. They want to force everyone all the way down the funnel because every deal has to matter. No, lose people where you lose them. After you do your discovery call and you determine, you know what, there's not enough ROI for them to make an investment in our product. Okay, cool. Lose that deal. Closed lost for this reason. This is where you can begin to identify here's where our opportunities exist. What we don't want to have happen Is leakage because we are not doing our job. And that's what I see a lot of is overly inflated, bloated pipelines where their focus is dissolved across too many people. And now people leak because you're just not even doing the follow-up that you need to do. So I think that's again, ties back to that first thing, CRM hygiene, pipeline hygiene. If it's really clean, lose people, you create the leakage where it belongs. Then you can begin to refine who's coming in and then take care of the people as each step gets more narrow. Now you're focusing on a smaller, an increasingly smaller group of people to provide more value when they're at that last stage versus the first stage.

Absolutely. Which basically comes to another point, Joe. At each and every funnel stages that we have, it could be as simple as 3 stages in your funnel or 10 stages in your funnel. It doesn't really matter, but there should always be the entry criteria and the exit criteria on how people are moving from one to the other stage.

Totally.

Because if that is not there, then I think, you know, to your earlier point, it always goes back to, hey, you know what, as a seller, I feel great that, you know, all my conversations are coming to demos and then coming into the next steps, whereas there is no clear intention from Whoever the prospect is who is sitting on the calls to buy or even consider the software, they're just doing a service to us because being a good person or good acquaintance over there. But other than that, it's not really a business value exchange at that point.

And that's such a good point, Suresh. It's what is the entry and exit criteria for somebody to move through the funnel? And this again goes back to what a lot of salespeople do is they just continue to converse until a deal happens or they ghost you, right? And that's usually what happens. You just start— those deals that are never going to happen, the reason why there's limited connection with them is they've ghosted them. They're like, I just no longer want to engage in this conversation. I was polite for as long as I could be polite, but I'm not interested. So again, getting real with that. And this is, again, this is more of a mindset than anything else. Like having the mindset of adding people, that adding people where they need to be. Like where do they need to be in your process? Part of Part of my sales process now, we give a lot of time away for free. Like, we provide a lot of input and a lot of value for a lot of people for free. We know the vast majority of them are not going to move forward with our services, but we add a lot of value in the process. Now, I don't want to do that for everybody. I want to do that for the people where it makes sense. And so—

Right.

I instruct our sales team, like, the phrase that comes out of their mouth when they're ready to move to the next step is, I'm 100% confident that engaging with us is going to be able to solve X, Y, and Z, whatever it might be. This is what I'd like to do next. What would you like to do? So it's a very pleasant part of the process. It's a co-laboring through this process with them. But I tell them, when you say I'm 100% confident that insert whatever you're going to insert there, that has to be true. That has to be a true statement. If you are not 100% confident that exit criteria, then do not take that step. Don't take the step just because it's the next step to take it because it's going to add value in their world and lead them down, you know, your funnel to a closed deal.

Absolutely. That makes sense. Joe, as a last question, I'm just wondering, in 2024, I think, you know, everybody's top of their mind is how do I generate more revenue? How do I really make sure that I help my sellers do their best. If that is the case, then especially related to the pipeline and the funnel, what are your insights that people should be focusing on, especially for the sales leaders? Can you leave us some thoughts on that?

Yeah, I think, and this honestly, this is not just a 2024 thing. This is an always thing. And I know that funding today looks different than funding looked 5 years ago or 10 years ago. And so there are a lot of companies that are being pressed more for, you got to generate revenue now. There's no more dollars that are flowing in just to float this thing. So I understand the need for a lot of companies that it's, this has got to turn into performance. I think the main question, and I have a unique philosophy in the world, it's not new, but it's not something that everybody follows. I believe in the give method, give and it shall be given unto you. My philosophy is like, how much value can you add into your prospects' worlds? And it's not completely altruistic. There is a sense of altruism in this methodology, but it's like by adding value that— here's the core tenet: money follows value. And so, if you need to generate money, there's 2 approaches you can take. You can start chasing money around the world, which is what a lot of people do. Just turn on more systems, more ads, more this, more that, chase money around the world, and you'll catch some of it. Or add value knowing that money will follow. And so what I mean, this conversation we're having right now is an example of this, Suresh. Like as Sales Table, like we're like, we just want to add as much value into our prospects' worlds as we can. So, it's the reason why you and I will carve out time to sit down and have this live conversation to add value to people. Do the same thing in your company. Where can you show up uniquely adding value in your prospects' worlds? So that your, like, your account status in their mind of emotional bank account increases. They're like, oh man, these guys are just awesome. I love it when they do this. And oh, you added more value. Like, your account should overflow with value. And some percentage of those people are going to say, I'm ready to start. You've added enough value. I pull the trigger. I'm ready to go. So I think that would be like my message to businesses in 2024 is Figure out ways that you can add value into your prospects' worlds in an increasingly impactful way and ideally efficient way. How can you efficiently add value across the spectrum knowing that money will follow with that?

That's amazing advice, Joe. I think one of the biggest things that we are seeing, especially in the software, e-services, professional services area, is the number of solutions that are out there are exploding. Right? I'm sure, I think what we call as the pitch slapping is the one that people are talking about, which is from the morning to evening. I'm sure we all have 10, 15, 20 emails coming about, hey, this is the service, that is the product, and whatever that is. If that is the case, the question really you are, or rather the idea over there is how do you add continuous value that somebody is recognizing that, yes. You are the one out of the 10 solutions that are pitching me, there is 1 or 2 who are really coming out to be unique. And then those are the 2 probably solutions I'm going to consider.

Yes. So instead of pitch slapping, value bomb, just value bomb people as much as you can. And this is something that salespeople can take control of. I'll give you a perfect example of this. I was engaging with a very successful entrepreneur in his industry specifically. He's got some really exciting stuff going on. And I listened to a podcast that I'm telling you, it matched up almost verbatim with his scenario. So I sent him an email. I was like, hey, just listen to this email or listen to this podcast. I think you'd find a ton of value from it. So I sent him the link to that podcast. He reached out the next day. His mind was blown from the content from the podcast. But guess what? My status just increased in his brain. So salespeople can do this. This is like the delivery mechanism of that. This is where sales, hand-to-hand combat, Go find value. If you haven't heard of the concept of a Dream 100, build your Dream 100 list. Like, these are the 100 companies that I would love to work with. This would be my dream if every one of them— build that list. It's a limited scope. And then allocate time every single day to think through people on that list. Where can I just individually add value? Record them a Loom video. Just pour into them. Just love all over them, right?

Yeah.

Value bomb them. Stop pitch slapping everybody.

Absolutely. Joe, as always, it's great talking to you. I, I'm sure we uncovered a lot of great insights today. And until next time, thank you.

See you soon.