What is a sales opportunity, and when do you know it’s not a lead anymore?
There is no single, universal definition. However, some common misconceptions deserve to be clarified because the concept of an opportunity impacts your sales process, your ability to qualify, and your alignment with marketing (if you can’t agree with marketing on what an “opportunity” is, you’ll have all kinds of challenges in scaling your sales.
Sales Opportunity
A sales opportunity is a qualified prospect who has a high probability of becoming a customer. An opportunity should have a pain point your product or service can solve and an interest in the offering.
Even a brand-new sales rep knows that a “sales opportunity” is when you are working with a qualified prospect who has a good chance of becoming a customer. But what does “qualified” mean, and how do you know the chance of a deal is not imagined? After all, typically only 10 to 15% of B2B sales opportunities become deals.
This might seem like a picky point, but the definition of “sales opportunity” at your company has significant bearing on forecasting accuracy. If each person has a different conception of what entails an opportunity, they’ll move leads through the CRM sales stages at wildly varying paces. With such inconsistency across your sales team, good luck projecting revenue with any hope of accuracy — you need to define clear sales process stages to ensure that deals are being categorised correctly.
Lead v Opportunity
A lead is an individual who’s at the top of the funnel and hasn’t yet been qualified. For example, they might have downloaded a piece of content like a white paper or eBook or they were contacted by a sales person via a cold call. An opportunity is a qualified prospect with a higher chance of closing.
But a “sales opportunity” is more than a “lead,” and herein lies the problem. Many think that a lead becomes an opportunity when you qualify based on BANT criteria — Budget, Authority, Needs, Timeline. But this is too simple.
The reason is this — it shouldn’t be necessary to know the prospect’s budget, timeline, or authority right at the very beginning when you’re just deciding whether you have enough there to convert the lead to an opportunity. If the prospect tells you that she has budget and a 30-day timeline to buy your product then you have yourself a nice late-stage opportunity with maybe an 80% chance of closing, not a first stage opportunity that typically comes only at a 10 to 15% win rate.
So, if BANT does not a first stage opportunity make, what does?
Lead v Prospect
A lead is a top of the funnel, unqualified contact. A prospect is a contact who has been qualified as a potential customer or client.
So, how can you move leads and prospects to opportunities? Look for these characteristics.
Characteristics All Sales Opportunities Must Share
1. Pain
Leads need some sort of pain (AKA need) before they can be converted into an opportunity. People generally buy to reduce pain, so if there isn’t pain, there probably isn’t a high likelihood of a sale.
2. Interest
The next thing to look for is interest. For example, the prospect might be aware of their problem, but does that mean they’re interested in solving it? Ask them how long they’ve had this problem. If they say it’s been around for 20 years, then why would they care to solve it now? Executives must pick and choose their battles, and the most acute pain will get solved first.
3. Fit
Let’s say you have a prospect who has a pressing need and a strong desire to solve the problem. Just one issue. They operate a three-person company, and your product is made for businesses with 100+ employees. Does this person represent a sales opportunity?
No, because they’re not the right fit for your offering.
What You Don’t Need to Qualify a Sales Opportunity
Sales reps who qualify with the BANT framework might be a bit confused. Where’s the budget qualification? The timeline? The authority?
If you are able to establish B, A, N, and T during a first call, then you don’t merely have an opportunity on your hands — you practically have a deal! The prospect is far more advanced than a first stage opportunity.
By definition, an opportunity means that you have a chance of selling a customer — not a guarantee. A fully BANT-qualified prospect is essentially a guarantee. An opportunity is a prospect who has pain, interest in solving that pain, and fit.
Using these three criteria to upgrade leads to opportunities ensures that sales managers and leaders analyse apples to apples in reporting. Once you’ve established the milestones a lead needs to satisfy to be considered an opportunity, put similarly well-defined criteria in place for the other stages in your sales process. Clear exit criteria ensure consistency and repeatability — the foundations of a strong sales process.
Are you struggling to define a strong sales process? Maybe we can help.
Don’t forget to subscribe to get regular updates and ideas.