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The sales funnel concept refers to the process of tipping sales "leads" into the top of a "funnel".

Progressively move the leads down the process converting them to a sale at the bottom of the funnel.

5 Whys Meets Sales Funnel

The 5 Whys approach to resolving problems is a valuable tool as discussed before. To learn this approach see the article "5 Whys Problem Solving Technique".

This 5 Whys approach can assist you with problems that have arisen in the layers of your Sales Funnel.

Action:
1. Take each layer of the Sales Funnel to represent the first level of their own 5 Whys:

  • Leads, Prospects, Conversion, Sales, Retention

2. Set up problem/solution pairs to address issues that arise at each of these levels.

  • Have the view of improving the performance at each level.

Example:

  • Identify reasons why your retention rate is not working well.
    Add them to Layer 2 of the 5 Whys analysis, behind the Layer 1 heading, Retention.

See this in the following Mind Map graphic:

Sales Funnel 5 Whys

  • Tease out more detail on the potential root causes of the problem for each layer of your Sales Funnel in Level 2.
    Identify solutions to those problems.
    As you work through those solutions mark them off as done.

In the one 5 Whys diagram:
You have a list of potential problems and solutions to your issues for each layer of your Sales Funnel.

This is a particularly useful tool if you do it in an electronic Mind Map.
The information can be updated as you progress towards a solution.

There are several free Mind map tools. Profit Savvy uses Mindomo as it can be shared with a team in real time.

Mind Map Process:

  • Mark the current most important activity.
  • This is often the Constraint activity.
  • Do this for each of the levels in your Sales Funnel.
  • This ensures that you always focus on the most important issue for each level.

In the example graphic above, the constraint is boxed and shaded red.

See the "Theory of Constraints" menu for more information on constraints in your business.

Practical Issue

Deviations

There are several "red herrings" that someone working with 5 Whys might follow. These could lead to incorrect, or less useful, root cause solutions.

Refraining Statements:

  • Limit the likelihood of reaching a root cause solution.
  • Offer an "excuse" for not continuing the analysis any further to find the root cause.

Example:
"Why people did not turn up to a Festival?"

  • A refraining statement might be "that it was raining".
  • This would be a red herring if tickets were sold in advance and ticket sales were down.
  • Sales should have been going well before the rainy day, if everything was on track.
  • The right track to the root cause here is the fact that ticket sales were down, not that it was a rainy day.

Reflective Statements:

"Blame someone else".
It is very easy when analysing the root causes of the problem to argue that it is someone else's fault.
If this wasn't a principle contributor, you would fail to get to the root cause.

Example:

"A restaurant experiences a drop in trade."

  • They might argue that "a new restaurant has started up" is the reason for the fall in their sales.
  • If they had persisted with the analysis, they might have found that the quality of their food had dropped.
  • That was the real root cause.

Tangential Statements:

  • May seem related to the problem at first glance.
  • May end up somewhat related.
  • May not lead to the root cause but be useful leading to other problems in your system.
  • Because of this they are worth keeping in the mix for now.
    • But
  • Focus your main attention, now, on the critical path which leads to the root cause.

Detractor Statements

The Reflective, Refraining and Tangential Statements may lead the 5 Why Analysis down the wrong path.
They do this based on a misunderstanding of the solution to the problem.

Detractor Statements:

  • Lead the analysis down the wrong path based on a desire to abandon the problem.
  • Are potential solutions to the problem which are irrelevant to the problem.
  • Are emotion-laden statements:
    • They reinforce the existence of the problem.
    • Do not provide any suggestion on how to solve the problem.

Example:

By saying "things aren't built like they used to be" may be a comment of fact but doesn't move you towards a solution.

It might be a malicious effort by people to hide some part of their "empire" which is at fault:

  • They throw in potential solutions to the root cause.
  • This takes the review team in a direction other than towards the failing of their part of the "empire".

The Aligners

Aligners are steps towards solving the root cause which support the direction in which you are travelling.
These include Supporting Statements, Banding Statements and Critical Path Responses.

Supporting Statements:

  • Do not lead the discussion further towards the next step in the solution process.
  • Tend to reinforce the original problem identified.
  • May not show a path to the resolution of the problem.
  • May be helpful in reassuring you that you are on the "right track".
  • Do not actually contribute anything to the solution themselves.
    • They are more of a comfort than a solution.

Example:

"A restaurant experiences a drop in trade."

Supporting Statement that supports the fact the food is not as good as it used to be:

  • An increase in numbers of poor reviews on Trip Advisor.
  • This might be contributing to the lack of popularity of the restaurant. 
  • It is not the reviews that are causing the problem.
  • The problem lies in the quality of the food getting the poor reviews.
  • The root cause is poor food quality rather than Trip Advisor.

Banding Statements:

  • Are similar to a Supporting Statement.
  • Are more correlated to the particular "Why" level answer being sort or discussed.
  • Tend to give an upper and/or lower boundary to the problem without identifying the problem.

Example:

  • You could say that red widgets are always at fault and blue widgets are never at fault.
    • This is due to the nature of the production of those widgets.
  • However, yellow widgets are faulty at random intervals.
  • The knowledge about the red and blue widgets doesn't contribute to the knowledge about the yellow widgets.
  • It does help give boundaries to the issue by declaring that not all widgets are a problem.
  • You would go on down the yellow widget track to the next "5 Why" steps and identify that the problem is (e.g.) in the pigment used.

Critical Path:

Readers familiar with Gantt Charts will know that the Critical Path is the fastest way to completing a project.

A purist would say there should only be one “root” cause to a particular problem.
In reality, there might be more than one substantial contributor.

  • We take up to 5 series of steps in the "5 Whys" which leads us to the likely root cause.
  • This series of steps is the "Critical Path". 
  • It is the fastest solution to the problem.

Even if there is only one root cause, the process is valuable in showing:

  • Other weaknesses.
  • Expanding your understanding of the issues.

Pseudo Solutions

Look as though they might be a valid solution to the problem.
But.
They do not address and identify the real root cause.

Example:
"A restaurant experiences a drop in trade."

  • Poor ingredients might be blamed.
  • Ingredients are a pseudo root cause if the real root cause is poor menu selection.

Either of them is plausible:

  • They both refer to the food.
  • They both might benefit from either mental and/or practical experimentation.
  • Watch what happens when you change each of them.

Pseudo Solutions are root cause solutions that seem to be plausible but turn out not to be.

Moving Toward a Solution

Run down through the "5 Whys".
Step 1:

  • Collect as many alternative reasons for the problem that you can.
  • Carefully analyse these and eliminate any "red herrings" as discussed above.
  • The one left is the one that is the most likely to be the principal problem.

Place this on your Critical Path.

The one that you place on your Critical Path is the one that you take to steps 2, 3, 4 & 5 (if necessary to go the full length).

  • You are not finding the root cause as you progress down this Critical Path?
  • Go back to the first step and consider the other alternatives.
  • Look for what might be the next best possible solution at the first step.

Then add steps 2 - 5 to that root.

The Theory of Constraints teaches us that there are only 1 or 2 main restrictions on most problems.

To progress as quickly as possible, focus on the likely main problem "branch” of the "5 Why" analysis.
Take this as far as you can towards a solution.

For speedy solutions:

  • Move down the "most likely" Critical Path.
  • Always keep in mind not to put on a set of "blinkers" that cause you to find a solution that "you wanted to find".

Outcome:

Is to use an analytical method to determine the most likely root cause.

You can then have the satisfaction of knowing that your gut told you that this was a plausible solution.

Too Many Steps

Are you progressing past 5 steps to begin to narrow down the root cause to the problem?

The identification of the original problem has not been close enough.

Example:

"A restaurant experiences a drop in trade".

In place of trade let's say that Profit was dropping.
There could be a few reasons for that happening.
Each of them might have a legitimate root cause.

  1. You are spending too much on ingredients.
  2. The economy is in a downturn.

To date we have been talking about Sales Volume being down.
Take the highest level cause you can find root causes for.

Going through too many steps to find a root cause?
Narrow down the definition of the original problem.

Mindmap Software

Is a very useful visual way to present information.
It is easily updated as you progress towards a solution.

There are several free Mindmap tools.
Profit Savvy uses Mindomo as it can be shared with a team in real time.
Link to Mindomo software.

  • At any point, you can mark the current most important activity (typically the Constraint and/or Critical Path activity).
  • You will find yourselves always focusing on the most important issues for each level.
  • The constraint path can be boxed and coloured differently in the Mindmap software to make it stand out. 
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