According to a CSO Insights study, sales reps spend only two days a week selling. As the chart above shows, they spend about 10 hours a week generating leads and almost two days a week on non-sales activities.
It gets worse.
One quarter of all forecasted sales opportunities end in no decision. That means sales people waste a lot of valuable selling time chasing unproductive deals. So, maybe your sales reps are really spending only 1.5 days a week on effective selling.
Hmmmmmmm…Not so good.
There is one sure way to increase sales productivity: focus on the right opportunities. If your sales reps did that, great things could happen. They would spend more time actually selling—to the right companies at the right time on the right deals.
How much would that be worth to you?
Great sales opportunities don’t appear magically. They result from deep knowledge of target companies, their needs, and their buying processes.
And guess what: “opportunity management” is a system. It is the process of systematically evaluating and prioritizing opportunities.
With an effective system, your reps will know how to score and prioritize their opportunities. Then, they will know where to focus their time and effort.
How to Evaluate Opportunities for Your Sales Reps—Show Me the Money!
An opportunity management system consists of three elements: the target company, the situation at the company, and opportunities at that company.
1. The Company—Focus on companies that sell appropriate products or services for your offering. If you sell $100,000 inventory control systems, don’t call on $2 million (annual sales) plumbing supply companies.
2. The Situation—To make a sale, you need relationships and some influence over the purchasing process at a target company. The company may be a great fit for you. But if you don’t know anyone there, nothing will happen.
3. The Opportunity—The company may be a fit. And the situation may be favorable. But you still need an opportunity—a deal that makes economic sense for you and your prospect.
Here are the components underneath each of the three elements:
Company
- Strategic Fit—Is the target company in the right industry and has needs that you can fill?
- Growth Potential—Is there an opportunity for multiple sales over time, or is this a one-off situation?
- Revenue Potential—Can this account generate enough revenue to be a major client for you?
Situation
- Access to Decision Makers—Do you have strong relationships (and credibility) with the executives who make purchasing decisions?
- Decision Making Process—How are purchasing decisions made? Can you influence the process in your favor?
- Competition—Are there external or internal alternatives to your offering? How viable are the alternatives? Can you steer the decision makers away from those alternatives?
Opportunity
- Deal Size—Is the deal big enough to justify your efforts?
- Need/Urgency—How badly does the prospect need your offering? How quickly will the prospect act?
- Timing—Does the timing work for you? Can you deliver what the prospect wants when he/she wants it?
What’s the Score?
You can assign a score to each company, situation, and opportunity. That score should tell you what opportunities are worth pursuing.
First, assign a weight/importance of 1 to 3 to each of the nine variables above. Then assign a score of 1 to 5 for each variable based on your knowledge of the company, situation, and opportunity.
Here is a hypothetical example of four companies:
- A Perfect Score results when the company is a perfect fit, the rep has a fantastic relationship with the decision-makers, and the opportunity is a huge deal and a win-win for both the seller and the buyer.
- Company “A” gets a score of 94%. The sales rep should hop right on that one.
- Company “B” has reasonable potential and a very promising opportunity. However, the “situation” is not that favorable. The sales rep needs to do more work building relationships.
- Company “C” has limited potential. The rep has no strong relationships (situation). But the particular deal is very attractive.
- Company “D” has reasonable potential, but the situation is not favorable. Nor is there an attractive deal available.
After reviewing this scorecard, your sales reps may choose to pursue “A” and “B.” The sales reps might not bother with “C” because they don’t have the relationships (Situation) to get a shot at the deal. Sales reps might see a long-term opportunity in “D” and work on a strategy to improve the situation. But it is not an immediate priority.