Leak

A leak is the stage where your funnel loses the most deals. Look for the step where the smallest share of deals moves on. That is often a different stage from the one with the fewest deals. Start there, because that is where most of your deals stop.

You find it with conversion. Count deals at each stage in the CRM for the same period, divide each stage by the one before it and find the lowest share. Example (invented numbers): of 48 inquiries, 27 reached a conversation, 14 got a proposal and 3 bought, so of 14 proposals only 3 became sales. About four out of five proposals never turned into a payment, which makes proposal to payment the leak.

Of 14 proposals, 3 became sales: about four out of five did not.

The head of sales names the leak once a month and watches it every week at the meeting. The owner wants one answer: where are we losing money? The leak gives that answer as a stage you can point to in the CRM, instead of a feeling. Sellers see it too, so the whole team knows which step this month is about.

The leak decides what you work on next. A leak after the conversation points to qualification or to the first call. A leak after the proposal points to price, terms or follow-up. Pick one fix, run it for a month, then count again.

You read it with three neighboring terms. The funnel gives you the stages, and conversion measures each step between them. Active deals tell you whether a stage is leaking or just slow: a deal with a recent reply and a dated next step has not leaked yet.

• Looking at counts instead of shares. The last stage always has the fewest deals. Compare conversion at each step.
• Fixing several leaks at once. You will not know which change helped. Take the weakest step, change one thing and count again after a month. Write the change down with its start date.
• Drawing conclusions from a handful of deals. With few deals, one lost customer swings the share a lot. Start with a longer period, such as a quarter, before you name the leak.
• Blaming a seller first. If a stage leaks across the whole team, the process is the problem. Compare sellers only once you know whether the stage leaks for everyone.

By Friday, the head of sales takes last quarter's deals from the CRM and counts them at each stage. Divide each stage by the one before it and circle the lowest share. Then open ten lost deals from that stage and read the loss reasons. Bring the stage, the share and the most common reason to the weekly meeting, and agree with the team on one change to test for a month. Keep the share on file, so next month you have something to compare with.

CRM rules the team follows and a forecast review you can run every week.