THE SALES FUNNEL IN THE ASSET PROTECTION MODEL OF RELATIONSHIP SELLING (Bonus part VI of the Producer's Role series)
The Sales Funnel in the APM works in conjunction with the 15 Step Marketing Program and requires a specific number of prospects to be active at all times. Of course it can be used independent of a relationship selling model and will still yield better results than traditional hit-or-miss prospecting. The number of prospects in the APM depends on the personal activity needs and expectations of the Relationship Manager (RM) for whom the funnel is constructed.
An RM with a large customer base that also needs attention during the year can’t have as large a prospect Sales Funnel as a new RM with few clients to attend. The assumption for APM agents is that we spend as much time attending to the needs of and visiting existing clients as we do on prospects. This assures maximum customer retention. If the RM uses our classic 15 Step Marketing Program he can identify the exact number of prospects that need to be activated at any time. For instance, the 15 Step Program classically requires 4-5 contacts/year for three years. If half of the RM’s time is devoted to current clients and other duties, he may only be able to visit two or three prospects per day within the Marketing Program. If each prospect is to be visited five times per year and the RM only has time for two visits per day (based on a 240 day working year), he can only have 96 prospects in his Sales Funnel (240 * 2 = 480/5 = 96). Each prospect may be at a different phase in the 15 Step program, but he must consistently maintain 96 prospects if he wishes to maximize the results achieved over the three-year period. Of course, if circumstances change and he can see more or less prospects, it will change both the results and the number of prospects in the Sales Funnel.
Classically, an RM without the burden of a pre-existing client base to service in a relatively urban area can have as many as ten to fifteen prospect visits each week (two to three per day). This would convert to a prospect base of 150 to 200 or more.
As prospects are ejected from the Sales Funnel, either out the side (at any stage that the prospect is disqualified or rejects the RM) or out the bottom as a sale, then a replacement prospect is placed in the top of the funnel and begins the APM (or any other sales method you choose to use) anew. This means that it is not unusual to have prospects in every stage of the 15 step program at the same time. The consistent number of prospects within the Sales Funnel guarantees the consistent conversion rates that are normal to the RM once the initial stages of the first year of the program are completed. The initial months typically yield few tangible results since the APM rejects quoting as an option for the sales process.
Two decades of statistics have evidenced that a Sales Funnel of 96 consistently visited and applied over three years will result in an average of 10 sales in the first year, 20 in the second and 30 in the third, over a 60% conversion rate – not shabby in anyone’s book. Of course this is an average. Inconsistent RMs will yield lower results and the dedicated APM Superstars can increase both the early front-end results and the total results to 75% conversion or more.
The results in real dollars to the agency truly depend on the type and size of accounts that is pursued within the APM program. We have seen agents using the Sales Funnel in personal lines with much higher contact rates (by phone instead of in person) but much lower revenue results per sale. We have seen agents using the Sales Funnel to much stronger revenue results in commercial lines, but a big difference exists between the results of pursuing $300-$500 commission accounts and pursuing $2,000 - $5,000 commission accounts (the sweet spot for most agencies). And we have even seen the APM and Sales Funnel in use for larger commercial accounts ($10,000+ commissions) but the Funnel looks different (smaller) with fewer prospects and fewer closes but higher revenue results.
While the conversion rate of the APM is impressive, it shouldn’t be surprising. Imagine the results you would have incurred historically if you eliminated disqualified prospects quickly, replaced them in the Sales Funnel to always have the right number in process, and saw every prospect with valuable content (not just a social call) as many as five times each year.
As my hero, Thomas Jefferson once said, “I’m a great believer in luck. And I find that the harder I work the more of it I have.” Tom would have understood the Sales Funnel and the APM.