Look at the project realistically and verify you are capable of performing the work efficiently. If not, you have almost no chance of winning the project at a price that will be profitable. Don't take the chance. Toss the project out of the funnel.
Explore your prospect's willingness to pay a premium for your superior services. Sell, sell, sell. The first three stages are about evaluation of the opportunity. Stages 4 and 5 are about changing the competitive landscape and closing the deal.
Negotiating the deal means you are agreeing to a price that you can live with - preferably without being the lowest bidder.
It may mean you have last look. It may mean that you are being awarded the project without competition. Stage 5 may be many things but most of all it is about closing the deal, signing the contract, and landing a profitable job.
A word about bid work and it's affect on the sales funnel.
IF you are competing for a true low-price-wins project, the project converts into a sale from Stage 3. If any other factor comes into play, the project must move through Stages 4 and 5 to become a sale. If you aren't moving it through those two stages, your competition probably is.
Playing the Numbers
As you build history with your sales funnel, you will be able to formulate ratios between each stage.
For example, you may need your marketing system to produce 10 green lighted projects for you to find five you will be price competitive on. Of the five, on average only three clients will truly value your services of which 2 will turn into projects. And you may need 30 potential projects to produce 10 real projects. Know and monitor your averages.
Obviously, selling effectiveness impacts the conversion ratios between Stages 3, 4, and 5. The better your sales team is at matching up client needs to your capabilities, the higher the conversion rates - and the less leads needed to reach your sales targets.
Time Management of the Sales Funnel
How does the Sales Funnel help you allocate time? By forcing you to spend time on ALL qualified prospects, not just on those you are about to close.
The sales funnel forces you to stay in touch with your entire sales pipeline by giving you a clear picture of your upstream opportunities. Tracking the number of prospects in each stage and making them visible is what makes the sales funnel process so effective.
Without a Sales Funnel, you will tend to concentrate on closing (stage 5) until you no longer have anything to close. This is a natural result of ignoring the prospective projects that are in Stages 1 through 3. Over emphasis on closing empties the funnel and creates the all too familiar boom-and-bust sales cycle.
You must spend time making sure that all the stages of your sales funnel remain adequately filled.
If you find yourself needing help keeping your sales funnel full and growing your business, give The Contractor's Business Coach a call. Ron Roberts teams with Guy Gruenberg as The Contractor's Business Coach. They show contractors how to grow their businesses profitably. To sign up for their FREE Newsletter or join their Private Club, visit www.FilthyRichContractor.com.