This is an important question when it comes to any opportunity in sales strategies: Is the deal worth winning?
In the very beginning of the life of a business it may seem that any opportunity is worth pursuing—and in the long run that may be true, whether or not that opportunity is profitable. While profit is the senior goal, so is credibility and having customers that can positively recommend your product or service.
But before very long it becomes necessary to make sure opportunities are worth winning. The precision of that evaluation becomes more vital as a product or service becomes more complex, as there can be a number of “hidden costs” that aren’t taken into account. Here are some key considerations in evaluating an opportunity as to its profitability:
Any opportunity falls above or below a threshold of profitability for a company. It is important to establish that threshold early on. It becomes a primary goal of a company to sell and deliver products and services as far beneath that threshold as possible, while still maintaining desired quality.
Figuring in this factor can and should be made part of a company’s sales process and worked fully into sales strategies. If this is done, and is also incorporated into the company’s CRM solution, the profitability of any opportunity can be seen all the way through a sales cycle. That would be part of rating it as to its priority.
The possibility of future business is another aspect to revenue potential which can be weighed as a factor in evaluating the profitability of a deal. Shrewd companies will take a smaller profit if it means more business up the road.
Dovetailing in with revenue potential is the strategic value of the opportunity to your company. Take a look at how well this potential deal fits in with—and helps you make—your company’s strategic targets.
Then examine the leverage potential of this opportunity. Will you be able to leverage this deal into others? This may mean more sales from the company you just sold to, or it could mean deals from referrals. If the company you are selling to is a leader in its industry, its purchase and implementation of your product and service may mean your acquiring an entire sector of industry.
Any opportunity should be evaluated as to its risk. In addition to the risk of the sale occurring in the first place, there are a number of others that should always be examined.
For example, is it possible that your company will not be able to deliver the product or service? Or, what is the possibility that your company won’t be able to deliver on time?
Then there are the questions that nobody wants to ask and even fewer want to answer—but if left unaddressed there is an element of risk that will be unknown. These questions examine the possibility of failure: how possible is it your customer could cause your solution to fail? If the solution failed, what would be the impact on your business?
Another often unexamined side of risk examination is: how possible is it that your prospect company could come up with a solution to their problem themselves, thereby killing the sale completely?
Free Opportunity Analysis Toolkit
You’ll be able to address each of the above factors for every deal you are making with the free Opportunity Qualifier tool we are offering with our Opportunity Analysis Toolkit.
In the end, you’ll want to make every one of these analysis points part of your sales process, and work it fully into your CRM solution. That way each of them will be a standard point of evaluating opportunities into the future.
All sales strategies must take this question fully into account: Is the deal worth winning?
Click here to download your free opportunity evaluation tool.