This is an important question when it comes to any opportunity in sales strategies: Is the deal worth winning?
In the early days of a business, it may seem that any opportunity is worth pursuing. In the long run, that may have been true. While profit is the senior goal, so is credibility and having customers who can positively recommend your product or service.
But before 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:
Revenue potential
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 part of a company’s sales process and worked 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.
Strategic value
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.
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 you are acquiring an entire sector of industry.
Risk potential
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 other risks that should always be examined.
Is it possible that your company will not be able to deliver the product or service? What is the possibility that your company won’t be able to deliver on time?
Then there are questions that nobody wants to ask and even fewer want to answer: What if your customer causes your solution to fail? What would be the impact on your business? How possible is it that your prospect company could find a solution to their problem themselves, thereby killing the sale completely?
You’ll want to make these analysis points part of your sales process, and work them fully into your CRM solution. Each 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? ●
Nikolaus Kimla is the CEO and partner of pipelinersales.com.
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