What is a Sales Opportunity and How To Manage Sales Opportunities

There has been a lot of confusion on what a sales opportunity is. This is because a sales opportunity has no single, universal definition.

However, some common misconceptions deserve to be clarified because the concept of an opportunity impacts your sales process, your ability to qualify, and your alignment with Marketing (if you can’t agree with Marketing on what an “opportunity” is, you’ll have all kinds of challenges in scaling your sales).

A “sales opportunity” is more than a “lead”

Simply put, a sales opportunity is a qualified sales lead. This means an opportunity is also an object which represents a potential deal, but this specific deal has met certain criteria which indicate a high value to the business, or a high probability of closing.

This is where the differences between sales processes emerge. Since every business has a different set of criteria which determine how qualified a lead is, each business will consider a lead qualified at a different stage. There are many different pieces of information that can be used to qualify a lead, which we’ll cover below.

All sales opportunities should share three traits. Start with these, and then layer criteria particular to your company on top.

1. Pain

A lead needs to have some sort of pain (AKA need) before they can be converted into an opportunity. People generally buy to reduce pain, so if there isn’t pain, there probably isn’t a high likelihood of a sale.

However, it’s the job of the sales rep to identify that pain. Just because a prospect doesn’t explicitly express the pain to you out of his or her own volition doesn’t mean there is none. To be successful in sales, a sales rep needs to develop the right qualification skills to bring that pain to the surface and pull it out of prospects by asking carefully crafted questions.

This goes for inbound leads as well. It’s great that a prospect downloaded an ebook from your website, but that might just mean they want to learn the content. So the rep still needs to qualify for pain before converting the lead into an opportunity.

2. Interest

The next thing to look out for is interest. For example, the prospect might be aware of their problem, but does that mean they’re interested in solving it? Ask them how long they’ve had this problem.

If they say it’s been around for 20 years, then why would they care to solve it now? They’ve lived with the issue a long time without being bothered by it. There is clearly little interest in solving it.

Executives must pick and choose their battles, and the acutest pain will get solved first.

3. Fit

Let’s say you have a prospect who has a pressing need and a strong desire to solve the problem. Just one issue. They operate a three-person company, and your product is made for businesses with 100+ employees. Does this person represent a sales opportunity?

No, because they’re not the right fit for your offering. They might want to buy your product, but the salesperson shouldn’t sell it to them. Since the product and the prospect’s situation aren’t well aligned, it’s a recipe for an unhappy customer. And unhappy customers often take to online review sites to express their frustration.

By definition, an opportunity means that you have a chance of selling a customer — not a guarantee.

An opportunity is a prospect who has pain, interest in solving that pain, and fit. A salesperson can pick up on the budget, timeline, and authority throughout the sales process to further qualify (or disqualify) the opportunity.

Using these three criteria to upgrade leads to opportunities ensures that sales managers and leaders analyze apples to apples in reporting. Managing sales opportunities is crucial to successfully converting opportunities into a sale.

So, how can do we manage sales opportunities?

1. Qualify – when to create an opportunity?

Considering the resources you spend on winning an opportunity, you need to decide what criteria must be met before you initiate a sales opportunity. Often, sales opportunities are created prematurely, causing salespeople to spread themselves too thin and spend too much time on low priority opportunities.

They may even be spending time with opportunities that can never be won because there’s simply no opportunity there in the first place – just a person who wants some free education. Be diligent when you qualify. Ask the tough questions.

You might be better off focusing your sales resources on larger deals and over invest time with them to increase your likelihood of winning a few of those instead of many smaller ones.

Learn more about it here

2. Understand the buyer

In order to take a sales opportunity from start to finish, your sales people need to identify the buyers; their decision teams; their buying styles and processes; motivations to change; business objectives; time schedules; and competitive landscapes.

To be able to get all this information, you’ll first need to build rapport and establish trust. Your sales team must coordinate discussions with everyone involved, including an increasing number of people on both sides of the table.

It takes a lot of effort – and this is not even a complete list.

3. Uncover the perceived risk for the buyer

One thing that sales people often underestimate is the buyer’s perceived risk in buying your solution.

While it may be “just another sale” for the salesperson, it might be the first time the customer has invested in a solution like yours, or they may have made similar investments in the past that failed to deliver the promised results.

The level of perceived risk will increase the complexity of the sale. Failing to confront these risks will become costly.

4. Visualize your opportunity insight

As the sales manager, you need to be able to quickly determine the state of each opportunity.

Expecting sales people to keep all of these parameters in their heads is not a good idea; nor is using Excel or traditional CRM systems where an opportunity is just a list of activities with an estimated closing date and a value. In traditional CRM systems, you’re looking through a straw, when what you really need is a wide-angle view.

5. Measure deal progress (not just activity levels)

Once you have a structured system in place, you will be on top of each opportunity and be able to create the best individual deal strategy and coach accordingly.

Good opportunity management includes having a clearly outlined process with the right milestones and progress indicators to ensure that each deal is moving in the right direction.

6. Disqualify– when to stop spending resources?

With this structured opportunity process in place, you can create rules that proactively alert you when important milestones are missed, or when sales people forget to identify the right people, for example.

“Sales opportunities are often created prematurely, causing sales people to spread themselves thin and fail to spend enough focus on opportunities that should be prioritized.” -GEORGE BRONTÉN

Source: B2C