When Opportunity Knocks, What Does it Mean?

Brent Leary

 

Ok, we all know what a business opportunity is.  Basically an opportunity is a sales deal associated with a specific account.  So now that we’re all in agreement about what an opportunity is, what is it really?

 

In order to get the most out of your CRM initiative it is important for everyone involved with sales to have a solid understanding of how opportunities are managed.  This starts with answering a few questions.

 

How Are Opportunities Valued?

On the surface this seems obvious - $$$$.  However opportunities can be measured in units, price per unit and expected net revenues to name a few.  If your company’s goal is to increase the percentage of sales coming from new customers those opportunities may rank higher.  If the goal is to sell more products and services to current customers those opportunities may be more important.  It’s imperative for everyone in the sales organization to understand how opportunities are valued.  If sales management has a different idea of how opportunities are valued than sales reps do, confusion will reign supreme.  For example, during the course of the sales cycle additional resources are required during the customized product demo stage.  The sales manager must determine the appropriate amount of resources to be used for each opportunity based on the information each rep provides.  It’s safe to assume that reps feel their opportunities are always highly valuable and want the best available resources to close their deals.  If there is no standard way to measure the value of an opportunity the allocation of resources is done subjectively.  So reps that are highly persuasive may end up “selling” their management on opportunities that add less to the bottom line than other deals. 

 

From the sales reps perspective, knowing how to value opportunities will give them a better handle on what deals to concentrate their efforts on to maximize the value of their pipelines, increasing their bonus potential.

 

How Are Opportunities Pursued?

The lead has been qualified and you’re ready to engage the prospect - what happens next?  What are the milestones in your sales cycle that allow you to estimate your chances of a winning the deal? What tasks do you need to perform in order to reach milestones?  What are the resources you require to complete tasks?  How long do you expect it will take to determine the outcome of the opportunity?  By answering these questions an organization can begin using their CRM application to automate time consuming tasks repeated for every opportunity. 

 

If your organization offers multiple products and services, chances are milestones, tasks and probabilities may not equate across the board.  Selling software requires a different approach than selling financial services.  Also selling services to a small company is different than selling consulting services to a Fortune 500, or to the public sector. 

 

A good exercise to perform is to write a definition of what each milestone means to your organization.  This step will enable each member of the sales organization to know exactly what it means when an opportunity reaches this particular stage in the sales process, and what tasks are currently underway to reach the next milestone. 

 

Opening the Door and Closing the Deal

Implementing a formal sales methodology is more than many organizations need to increase the effectiveness of sales efforts.  It can be time consuming and costly to implement.  However, by answering some the above questions you can lessen the ambiguity inherent in the selling process, creating more effective and efficient communication. Forecasting becomes more reliable with a better understanding of how stages, probabilities and tasks correlate with each other.  This should result in less administrative time talking about opportunities and more quality time working them. Ultimately, getting all parties involved with selling on the same page should allow for more time to close deals and less time to ask questions.  Better go check your door, Opportunity is knocking.

 

About the Author 

Leary is a partner with CRM Essentials, a customer relationship management consulting firm assisting companies to formulate and implement profitable customer-focused strategies, including sales automation, web self-service and marketing automation. He can be reached at bleary@crm-essentials.com or www.crm-essentials.com.