Funnel Model

PURPOSE

The purpose of this model is to facilitate the setting of key leading indicators of sales performance – what kind of funnel metrics should you be seeing on an ongoing basis if you expect to “make your numbers”

The model is constructed as follows:

2 phases for the lead funnel: Identified and Pre-qualified
Leads are individuals/contact information that meet some pre-set criteria/definition
2 primary phases for the sales (opportunity) funnel: Qualified and Closed
Sales funnel phases between Qualified and Closed are also shown for some of the metrics as described below
Opportunities are potential deals that have an established need, solution, value and decision horizon

TO USE:

Decide the level you want to model – sales rep, region, total company, etc. and then enter the annual sales target in dollars for that entity.
Next, enter the most likely deal size (dollars per closed deal), hit rate (% of qualified opportunities that close) and sales cycle (number of months to go from qualified to closed).
Note the monthly and quarterly targets that appear.
The targets indicate the # and $ of new opportunities that must be qualified and closed each month and quarter, the # and $ of opportunities that would be contained in a “full funnel”, assuming a funnel-like distribution, and the # of opportunities that should be in each phase for an ideal distribution.
The model also produces the $ for a “discounted funnel”. This is the $ sum of all opportunities in the funnel discounted by a set factor based on funnel phase.
If you next input the success rate and cycle time for converting pre-qualified leads into qualified opportunities (PQ-Q), a target for pre-qualified leads appears. This would be the number of pre-qualified leads required to generate the required number of new qualified opportunities per month and quarter.
Likewise, if you enter the success rate and cycle time for converting identified leads into pre-qualified leads (ID-PQ), a target for identified leads appears. This would be the number of identified leads required to generate the target number of new pre-qualified leads per month and quarter.