Streamline the opportunity sales process for Procurement

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hello gary smith here many companies struggle with defining the opportunity stages they should use in salesforce and yet as you'll have seen in my other videos it's so important to get this right in this video i'll explain the six opportunity stages used by many of our b2b customers let's see if they apply in your business let's not beat about the bush here are the six stages prospecting some people prefer qualifying but i'll explain why i think prospecting is slightly better discovery some people prefer needs analysis but i'll explain why i think discovery is the better term customer evaluating and i'll explain why i think that's slightly better than proposal or proposal sent closing very often people use negotiation but again i think closing is better for reasons that i'll explain closed one and close lost and of course there might be variations of closed lost qualified out or no purchase for example i'll talk about those as well i'll walk you through each stage explain the definition and describe the exit criteria that define when an opportunity is ready to move from one stage to the next so let's start prospecting these deals are in the first stage of your sales process opportunities in this stage represent your long-term pipeline often you think there's a deal but right now it's far from certain probably the customer hasn't yet committed to a time scale or a budget and of course the close date is far from certain and maybe many months in the future often the customer if you were to ask them might not even agree that a potential deal exists that's because you're busy educating the stakeholders on how the status quo needs to change so a lot of uncertainty nevertheless you think there's an opportunity of course in many companies these deals aren't entered into the pipeline and sales people can be reluctant to create opportunities in part that's because there's so much uncertainty about the deal and i get that but nevertheless i believe it's important to keep track of this very early stage pipeline you need to make sure you continue to nurture and develop the relationships and eke out that opportunity of course you can always filter out these deals from the reports and dashboards that report on the pipeline size now what about the exit criteria i recommend there are four questions to ask about deals in the prospecting stage is there an opportunity can we win it is it worth winning do we want to win it you might think questions 3 and 4 sound similar but nevertheless they are different is it worth winning is an economic question are the revenue and the margin worth the cost and the effort do we want to win it is a strategic question existing customer relationships or market dynamics may give a compelling reason to attempt to win the deal these factors may apply even if it's not that attractive economically now currently you may not be able to answer these questions definitively that doesn't matter but that does need to be enough information to decide whether it's worth moving to the next opportunity stages incidentally i prefer the term prospecting rather than qualifying for opportunities at this stage the reason is qualifying should be a continuous activity through the sales life cycle it's not a one-off step early in the sales process you should be re-qualifying all the way through either way many opportunities at the prospecting stage will be removed from the pipeline at this stage that's fine don't waste time with deals that you can't qualify confidently now what about the next stage discovery the traditional way to think about this stage is you're finding out about the customer's business needs you're aiming to align your proposal or quote with what the customer wants however the best sales people go way beyond this they are not passively listening to the customer instead they are often directly influencing or changing how the customer perceives their needs for example this activity is widespread in cases where the customer plans to issue an rfp you want to bend the content of the rfp to align with your products and services but likewise high-performing sales people also find out about many other factors that influence their chances of a successful outcome they are asking questions about the decision-making process gathering information about the people involved they also gain vital details about budget time scale competitors and so on that's why i prefer the term discovery to needs analysis because it better describes what is happening in a successful sales process finally in this stage re-ask the qualification questions as your exit criteria you must now be able to answer those questions with more conviction if your answers are not compelling remove the deal from your pipeline or continue for a period in the discovery stage influencing the stakeholders and conducting some of those other activities that we talked about now what about the next stage customer evaluating or if you prefer proposal sent or proposal this is where you send your proposal or quote to the customer that's not necessarily a formal document of course it could be an email either way you're making specific proposals in terms of products prices services and so on and your customer is evaluating the proposal i'm okay with calling it proposal made or such like it's just that i believe customer evaluating more accurately reflects the proactive influencing and communicating you're likely to be doing at this point for example the stage might include demos reference visits presentations and similar activities in terms of the exit criteria you're looking for a firm commitment that the customer intends to do business with you in principle at least there may be many detail points to iron out but you have an agreement on the main commercial arrangements and you have a detailed close plan agreed with the customer the close plan is important it sets out the activities that will take place on both sides to bring the deal to a conclusion and get ink on the contract and i emphasize the closed plan is agreed with the customer and i recommend documented in salesforce if that's all good we can move to the final stage closing many companies use negotiating here again that's okay but i have two issues first the term implies we are likely to concede on key commercial points so i think negotiating sets the wrong tone but the other point is that negotiating doesn't describe the full range of activities that probably need to take place to finalize the deal very often that's more than just talking and agreeing the contract there are other customer facing and internal activities that need to take place i think closing is a better way to encapsulate those activities the first exit criteria is probably self-explanatory you've got a signed contract but you might want to specify other criteria for example a handover from sales to support a detailed discovery plan or whatever is relevant in your business by the way it's a good idea to use the lightning path in salesforce to record the definition of each stage and capture those exit criteria so if we have those things in place we can move the opportunity to closed one incidentally if you have fulfillment activities or project delivery stages after winning the deal i recommend you track those in a separate field other than the opportunity stage don't clutter the opportunity stage of course we don't win every deal that's why we have closed lost and optionally if you want you could have several other values that record versions of closed lost qualified out for example or no purchase where the customer doesn't buy from you or anyone else for that matter so they are the opportunity stages that many of our customers use remember you don't have to use them verbatim instead think of them as a template for defining the stages that are best suited for your business now don't forget you can ask for a free 30-minute consultation with me or a member of my team and we will help you with any aspect of opportunity stages in your business so fill in the form for that today i'm gary smith thanks for watching see you on the next video