This section covers using two fields of the Standard template - Stage and Probability - to assist in managing your sales Pipeline. You may choose to use a different approach with a different template.
Selling, just like baking a cake, is a process. Both processes - selling and baking - have different techniques, styles, skills, and certainly can have varying results. But without arguing the merits of any style, it is still true that the basic underlying process stays the same.
The selling process can be described in seven steps:
Leads - the artillery barrage of the selling war. Advertising, trade shows, Internet hits, calls, cold calling - anything that creates a general awareness of your company and its capabilities.
Identify Opportunities - is the process of finding clients with projects that will require the type of products or services your company offers.
Assess Business - chasing the wrong Opportunities is very, very expensive. Is there funding? Timing? Executive sponsors? Do we have a technical fit? What is the lifetime value of this customer? What is the cost of acquiring this business? The risks to our success? The person who is probably least likely to make this decision objectively is a sales rep with a mortgage to make and a quota to meet.
Develop Solution - Have we walked in the client's moccasins enough to understand his problems? What is our strategy? Do we understand all the issues our solution implies? Do we have an ROI message? What is the competitive solution? How are we going to convey our message? What is their decision process?
Present Propose - our chance to educate our client on the joy they will find in our products and services. No one wants to hear our company's history -no exceptions. What is our proof - how will they test drive our solution? Evaluation? When do we merely quote or do we prepare a proposal? Shall we take the client to our ivory tower and inflict a headquarters visit? What is the competitive proposal?
Gain Commitment - what is our close ratio? How often do we get to this point in the sales process?
Implement Confirm - is the first step in adding a lifetime customer to our client list. We are just beginning a what may become a profitable relationship with this client. How well do we do this?
Stage
For each of your sales Opportunities you can use the Stage field to track where you are in the selling process. The stage fields are the seven process steps described above.
You can begin to get a perspective on your sales Pipeline by looking at how many Opportunities you have in each stage of your sales process. Select Stage in the Navigator and all of your sales Opportunities will be organized by stage.
Probability
Stage measures where you are in your sales process with each Opportunity. Probability is an independent assessment of your sales Opportunity. It is your professional assessment of the likelihood that a sales Opportunity will close in our favor.
It may seem that Stage and Probability are related - i.e. the later the selling Stage, the higher the Probability. They are not necessarily related. You may be in the late stages of your selling process (perhaps at the Gain Commitment stage) but the sales Opportunity may still be highly competitive - 50% - Competitive - or even a 25% long shot.
The probabilities are designed to provide a rough assessment of the probability of closing this business. The probabilities are:
0% - Lost means an Opportunity is lost, but has not been deleted from your sales Opportunities. Some organizations may wish to keep records of won and lost Opportunities for analysis.
25% - Long Shot is an Opportunity where we very unsure of the outcome. We may be early in the sales cycle and haven't had a chance to qualify it well yet. Or it may be a sales Opportunity that we are in hot pursuit but are not winning. Remember - the stage describes how far we are in our sales process, the probability predicts the outcome. Therefore a stage of "Gain Commitment" and a probability of "25% - Long Shot" is a cry for help!
50% - Competitive means we are actively engaged in a competitive sales situation. The client has not made up their mind yet, and does not yet have a favored vendor.
75% - Favored means we have feedback from the client that this business is ours to win They have made a decision to go ahead with this project, and they are very interested in our solution above other competitive solutions that they have looked at.
90% - Verbal Commitment indicates that the client has told us in no uncertain terms that we are getting their business. This usually indicates that paperwork is in process and we expect an order soon.
100% - Won means an Opportunity was won, but has not been deleted from your sales Opportunities.
Some organizations may wish to keep records of won and lost Opportunities for analysis. Using the Desktop Sales Manager, you may print a report showing your sales Opportunities by their probability.
The percentages included in the descriptions can potentially be misleading. We don't necessarily expect to close one out of four "25% - Long Shot" sales Opportunities. The percentages (25%) give a rough image to support the reality - this sales Opportunity is a long shot.
We do recognize that a large number of sales organizations use "probability revenues" for prediction of sales revenues for sales periods, and so we have provided this as one of the calculated fields that are provided in the Opportunity Display. This "Probability Revenue" is calculated by taking the revenue number for the Opportunity, and multiplying it by the probability percentage.
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