What does a good opportunity look like?
Every sales person has lots of leads that might eventually lead to sales. However, the reality is that probably only 10-20% of leads will actually generate revenue. There is a temptation to think that working hard on all of them will increase the chances of closing more. However, the reality is that working on all opportunities equally probably leads to less revenue as some that you should win end up being lost. Studies have shown that it takes 50% longer, on average, to lose a deal than to win one!
Every sales person needs a method of determining which opportunities are most likely to close and then focus on closing those (while trying to generate more leads that are similar). This way, more of their effort is spent on winnable deals and less on deals that they are less likely to win.
To determine what a good opportunity looks like, we need to look at
- Historical data – analyse previous sales and activities
- Feedback – why did you lose previous opportunities
- Experience – your own and your peers as to what worked and what didn’t
From all of this, create a set of benchmarks or criteria against which all opportunities can be judged. These need to be objective with a points system to allow you to rank all of them against each other. From this, you can then target the most likely ones to close and work more on those than others that are less likely to close. In addition, you can use a gap analysis to determine a series of actions that will help to improve the chances of success of each opportunity.
Of course, this does not mean that you ignore the opportunities at the bottom of the list. You may adopt a different approach to them such as more marketing activity or technical meetings, rather than outright sales activity.
By applying the same criteria across an entire enterprise, sales managers can then identify the best opportunities across the company and may choose to redistribute resources accordingly.