When Opportunity Knocks, What Does It Mean?
Ok, we all know what a sales opportunity is. Basically an opportunity is a sales deal associated with a specific prospect. 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. 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 the 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?
Now that the lead has been qualified and you’re ready to engage the prospect, what happens next? What are the milestones in your sales cycle you 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 to automate those time consuming tasks that are repeated for every opportunity.
If your organization offers multiple products and services focused on different industries, chances are milestones, tasks and probabilities will not equate across the board. Selling software requires a different approach than selling professional services. Also selling consulting services to a small company may be different than selling consulting services to a Fortune 500, or to the public sector.
A good exercise to perform which will pay benefits in the long run 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 full-fledged sales methodology maybe more than many organizations need in order to increase the effectiveness of your sales efforts. It can be a time consuming and costly exercise to implement. The cultural change that usually comes about could cause conflicts in the organization if a well thought out implementation plan isn’t followed. However, by answering some the above questions you can lessen some of the ambiguity that can be inherently apart of the selling process, creating more effective and efficient communication. Forecasting can become more reliable with a better understanding of how stages, probabilities and tasks correlate with each other. The end result should be less administrative time spent talking about opportunities and more quality time working them. Ultimately, by taking some time to get all parties involved with selling on the same page should allow for more time to close deals and less time to ask questions.
To learn more about incorporating opportunities management into your CRM strategy feel free to contact CRM Essentials