These sales pipeline stages are the process by which prospective customers are moved through the buyer’s journey and converted to paying customers.

Based on our observations, the terms “sales pipeline” and “sales funnel” are often used interchangeably. But these terms actually mean very different things. 

Your sales pipeline is the specific sequence of actions your team takes to convert sales leads into closed sales. This includes every tactic used from sales outreach to negotiation, and hopefully ends with a signed contract.

Let’s say your salespeople have a meeting with a prospective customer regarding pricing or the benefits of your product. That’s one of the activities comprising your sales pipeline.

Your sales funnel, on the other hand, is a visual representation of the proportion of leads that pass through each stage of the pipeline. So, your sales funnel gives you an overview of your sales process and the opportunity to gather insights from it.

This makes it one of your most valuable resources.

Together, these two concepts are used as tools by all successful sales teams to optimize their lead conversion rates. As per our expertise, a salesperson who gathers tips and generates goals around their sales process and sales funnel gives their business a leg up in its industry.

Take the guesswork out of your sales pipeline stages

Our findings show that without a clearly-defined sales pipeline, you run the risk of missing opportunities to support valuable leads and convert them into long-term, repeat customers. From lead generation to closing deals, a sales pipeline keeps your business on track at all times.

Luckily, CRM solutions like Method CRM make it simple for sales reps to track opportunities in a standardized way.

By setting up your preferred sales pipeline stages in a CRM, reps can quickly update opportunities as they progress. They can also easily identify which deals are closest to closing so they can focus their time and effort accordingly. 

As leads show more interest in becoming customers in their conversations with your salespeople, you can reflect this in your sales pipeline. From there, you can adjust your approach to focus more on those hotter leads, like sending personalized emails for instance.

This makes sales pipeline management a breeze even as you achieve revenue goals and grow as a business. Drawing from our experience, it also makes life easier for your sales managers as your numbers get harder to manage.

By monitoring every sale from start to finish in a centralized system, you can measure your conversion rates at different stages and use this data as a guide to refine your sales strategy. You get total visibility of all the factors affecting your sales, all in one place.

Of course, the fact of the matter is that every company has a unique business model, so there are no “standard” sales pipeline stages that will suit every team’s needs. However, our findings show that the sales pipeline stages outlined below are a good starting point for many types of businesses.

A more in-depth comparison of sales pipeline vs sales funnel

Still confused about the difference between sales pipelines and sales funnels? Before we take you through a typical sales pipeline, let’s discuss what a sales pipeline is and isn’t.

A sales pipeline is a sequence of stages that consumers pass through to become customers. Consumers can move on to each stage after completing the one before.

Meanwhile, our research indicates that a sales funnel is more customer-focused. It shows you the steps that a consumer goes through to go from a prospect to a customer. 

While a sales pipeline tells the story of how sales reps win customers over from stage to stage, a sales funnel shows the rate at which prospects are converted through each stage of the pipeline. As per our expertise, both provide valuable yet different insight into your sales activities and performance.

Our research indicates that a sales funnel typically has three major stages independent of sales cycle length: 

• Top of the funnel (TOFU), which comprises the awareness and discovery phases.
• Middle of the funnel (MOFU), which includes evaluation and intent.
• Bottom of the funnel (BOFU), which is where purchases finally happen.

A sales pipeline, on the other hand, looks like this: 

1. Prospecting: Identify the interest level for your product or service

Your sales pipeline should always start with prospecting or identifying your lead’s level of interest in your products or services.

Chances are, you’ll observe the highest amount of interest and activity among prospective customers who fit your marketing personas.

These personas act as representations of your target buyers and are based on the demographics and behavior of your existing customers and stakeholders.

This type of person will presumably have more of an interest in what you sell and a higher conversion rate when nurtured across every sales pipeline stage.

2. Qualification: Qualify your leads to determine value

Qualification of your sales leads is the next stage of the pipeline management process.

You will need to use certain criteria to identify which prospects are most likely to make a purchase and therefore should be pursued further. The lead’s interest level and marketing persona alignment (as determined in the previous sales pipeline stage) are important criteria. Other key items to look at include budget, need, and timeline for purchasing.

You can automate this qualification process with your CRM software or complete it by hand using a lead qualification template.

3. Needs analysis: Determine if your product or service solves pain points

At the needs analysis stage, sales reps need to take a step back and look at their products and services from the customer’s perspective. Through our practical knowledge, at this point, you should ask yourself: Where is the customer coming from and what problems are they trying to solve?

The goal here is to assess exactly how your company’s offerings can resolve certain pain points. And if the answer is that they can’t, that’s okay too. It’s better to realize this early on than to try to force a sale that won’t benefit the buyer.

4. Value proposition: Assess the value of your product or service

The fourth sales pipeline stage relates to your value proposition. This stage gives sales reps a chance to assess the value of their offerings in the scenario at hand.

Using the information gathered in your needs analysis, you must determine how valuable a customer would find your products or services, based on their pain points. Our findings show that this will improve your ability to promote your products or services in a way that speaks directly to the buyer, rather than simply stating the specs.

5. Identify decision-makers: Cultivate relationships with key contacts

In a lot of B2B sales scenarios, the individual you sell to isn’t the person who ultimately has the power to pay you. Based on our firsthand experience, at this sales pipeline stage, you need to identify and engage with key decision-makers.

Ask your current contact or do your research to find the person who makes the purchasing decisions at the company or organization in question. You must then reach out and cultivate a relationship with this individual in order to get closer to closing the sale.

6. Perception analysis: Weigh client perceptions against reality

Our research indicates that in the sixth sales pipeline stage, you have to consider that the actual value of your products or services does not always match their perceived value. 

The buyer’s impressions of your offerings and your company play a big role in your team’s ability to close the sale. Not surprisingly, our findings show that leads who already hold positive or neutral perceptions at this stage offer the best outcomes for you.

However, drawing from our experience, you should also strive to develop strong sales practices that can overcome negative perceptions. Take the time to learn about your lead’s concerns and offer solutions to address them.

Also, having resources like blog posts available is a great way to help shape prospects’ perceptions of your products or services. 

7. Proposal / price quote: Create a quote for review

If you reach this sales pipeline stage, things are going well as it’s now time to create an estimate or proposal for your prospective customer.

Based on our observations, while it’s good to use standardized templates for all of your company’s quotes, each one should be personalized to match the customer’s specific needs. Make sure all pain points are addressed and all relevant terms and conditions are included.

To streamline this process, look for a CRM like Method that offers quoting functionality alongside lead management.

8. Negotiation / review: Finalize the details

At this sales pipeline stage, you should review the proposal with your customer and finalize the details. This is the time to make sure they understand the terms and conditions and answer any last-minute questions they may have.

You will need to keep a close eye on things at this stage, as letting something slip through the cracks could be a dealbreaker. Our research indicates that you should use every tool at your disposal to close the sale as seamlessly as possible. Sales reps will also need to know their limitations when negotiating on behalf of their company to effectively close the sale.

When negotiating a deal, keep in mind the following stages:

Preparation

Review your customer’s needs, values, and preferences. All of this should help you anticipate any potential objections they may have about pushing through with the deal. In doing so, you can come up with a more convincing argument in defense of your product or service. 

Engagement

Drawing from our experience, this is where active listening skills come in. Active listening is a sales technique that helps reps build rapport with prospects and help them truly feel understood.

Simply paying attention to a prospect’s hopes and expectations is a huge aspect of customer service that often goes overlooked. In this stage, a rep should refrain from pushing a hard sell and instead collect evidence to build a case that’s tailor-made for each prospect.

Bargaining

Now that you know your customer’s wants and needs, you can facilitate the negotiations. The point of this stage is to find a middle ground that works for all parties involved. 

Becoming a customer may feel like a big commitment to your lead. So it’s important to identify any source of hesitation for your lead and reemphasize the positive impact your product or service will have on their business. This might include offering them additional bonuses such as a trial period.

9. Closed: Win or lose, close the sale

The last of the sales pipeline stages is all about closing the deal. Through our practical knowledge, whether you win or lose the sale, it’s important to see it through to the end and get a final answer from the customer.

Upon determining the results of your sales efforts, document the details in your CRM to allow for ongoing data analysis of your sales targets. Over time, we found that information on won and lost sales opportunities can help you refine your sales pipeline stages and improve your sales process.

This means that, win or lose, your sales forecasts will naturally become more ambitious each time you navigate through these sales stages.

The importance of sales pipeline analysis

Our findings show that sales pipeline analysis helps you determine what influences successes and failures and helps you pinpoint areas in the pipeline that can be improved upon to drive sales up. By fine-tuning every little detail of your pipeline, you can improve the speed at which you acquire new customers and eventually reduce the costs involved in customer acquisition.

Our research indicates that some of the top metrics to track include:

• Average deal size: This is the average amount of money that a client spends on a product or service. It is computed by adding the total revenue from a set period and dividing it by the number of closed-won opportunities within the timeframe. 
• Win rate: This represents the ratio of deals won to the total closed opportunities.
• Average length of sales cycle: This is the average time spent from the first contact with a prospect to closing.
• Sales velocity: This measures the speed at which sales move through your pipeline to generate revenue.
• Lead response time: This is the average time it takes for a sales rep or a business to follow up with a lead.
• Sales pipeline value: This is the value of all qualified opportunities that entered your pipeline.
• Probability to close: This is the likelihood that deals close in a stage of the sales cycle, measured in percentages.

Make the most of your sales pipeline stages

As per our expertise, to get the most out of the sales opportunities that come your way, you must have clearly defined sales pipeline stages. Planning out sales stages is one of the most important tactics in the sales playbook.

Based on our observations, the significance of monitoring each of your sales pipeline’s stages becomes clear when you consider things through a more macro lens. 

The data you pull from your pipe line and sales conversion funnel serves as one of your most useful tools when setting sales objectives.

It allows you to learn, adapt, and develop new strategies through accurate sales forecasting. So you can make clear financial goals around things like budgeting or the revenue numbers you’re reporting. 

Use the examples described above as a starting point, but don’t be afraid to evaluate and refine them over time to develop the perfect sales process for your business. And keeping track of these changes makes training new employees easy for you down the road.

Ultimately, this pipeline will give your sales force the structure it needs to convert leads to lifelong customers.

Importance of sales pipeline stages FAQs

What are sales pipeline stages?

Sales pipeline stages are the steps that comprise your overall sales process. Of course, there’s more to a sale than a monetary transaction. Companies develop a relationship with prospective clients that needs to be attended to throughout the entire sales process.

For example, newer companies with less experience in their industries have little to no brand awareness. Based on our observations, while social media content falls more under general marketing tools, individualized strategies like personal emails are a key stage in the sales pipeline.

If you’re discussing the benefits of your product or service with people and how it will help their goals, that’s a key stage in the pipeline as well.

How do sales pipeline stages help salespeople prioritize their time?

Sales pipeline stages help salespeople prioritize their time by segmenting the sales process into digestible parts. This way, it’s easier to improve your sales results in the future, as you can pinpoint exactly where your sales process needs work. 

Also, using sales technology or software to track your sales pipeline eliminates confusion across your company, allowing you to close sales more efficiently. 

Who should be involved in the sales pipeline?

Anyone involved in your sales process in any capacity should also be involved in the sales pipeline. This includes sales managers and sales reps, as well as anyone else at your company who engages with your customers.

See how Method CRM can help you convert more of your sales pipeline.

The post How understanding the different stages of the sales pipeline can help you maximize your revenue and achieve your business goals appeared first on Method.

• You don’t know if the opportunities in your pipeline are viable.
• You don’t know which opportunities to focus on.
• You take hours or days to follow up on opportunities.
• You don’t know your ratio of won-to-lost opportunities.

If any of the above apply to you, potential deals are likely slipping through the cracks.

Luckily, this blog will equip you with the top five best practices for opportunity management so that you never leave revenue on the table again.

Keep reading for a complete overview of what opportunity management is and how it helps you grow your business faster. Let’s dive in!

What is opportunity management?

To kick things off, let’s look at what opportunity management is. Simply put, it’s the process of managing and organizing your potential sales.

Sales opportunity management (or sales pipeline management) involves tracking potential sales as they move down the funnel. A key tactic when deciding how to identify sales opportunities is to prioritize your efforts on the highest-value deals that are most likely to go through.

Why does sales opportunity management matter for my business?

Sales opportunity management is important because it helps you be more efficient with your sales. Effective sales opportunity management lets you better understand your customers and prioritize your interactions with them based on their potential.

Now that you’re familiar with opportunity management and its importance in your business, let’s look at how to identify sales opportunities.

What are leads and opportunities?

In short, a lead is a sales prospect, while an opportunity represents a potential deal with a qualified prospect who has a high chance of converting to a customer.

A sales opportunity should have a pain point that the product or service that you are selling addresses. A lead, on the other hand, is someone with a general interest in your product or services.

Next, let’s dive into the role of leads and opportunity in sales.

Lead and opportunity management in sales

When it comes to sales, opportunity management is about converting your potential customers and leads into recurring revenue. To achieve this, simply understanding how to identify sales opportunities isn’t enough. Instead, sales managers need to have the proper system in place to keep track of their opportunities as they progress through the pipeline.

Using opportunity management for your business has several benefits. It lets you:

• Optimize your opportunity pipeline workflow: You will be able to standardize your sales process and keep your opportunities moving forward.
• Increase your win rate: By seeing what you need to do next in each step, you can apply proper sales techniques.
• Gain a better understanding of your opportunities: It will be much easier to see which opportunities matter the most.

For small businesses using an accounting software like QuickBooks, the opportunity management process may be messy or nonexistent. After all, accounting software is set up to track real sales from confirmed customers — not potential business from prospective customers.

That’s where a CRM comes in handy.

Examples of sales opportunities

There are many sales opportunities you can find as a small business, depending on the market you’re in.

If you’re in a mature market, you might find opportunities by:

• Creating targeted sales aiming at a new demographic.
• Developing new products to find another customer base.

For growth markets, you can look into:

• Expanding your distribution channels.
• Creating new business models, like building physical locations or adding an online store.

And if you’re in a frontier market, you can try:

• Overcoming competitors by coming up with new value propositions or collaborations with major players.
• Getting more market share by selling to other customers in the same niche.

Elevate your opportunity management with a CRM

For those of you asking yourself, “What does CRM stand for?” the answer is simple: customer relationship management. In this case, it refers to CRM software.

For many business owners, a CRM is a great way to keep track of leads and opportunities at every stage of the sales pipeline. Better yet, a QuickBooks CRM like Method helps you:

• Manage leads directly from your Gmail or Outlook inbox.
• Simplify your finances from end to end.
• Instantly capture sales prospects with lead gen forms.
• Eliminate double data entry.
• Gain a 360-degree view of every customer.
• Stay organized with information that’s always up to date.

Regardless of the CRM you choose, using one is definitely a best practice when it comes to managing your sales pipeline, opportunities, and operations effectively.

Now that you understand the foundation that a strong opportunity management process needs, let’s look at how to identify sales opportunities to build your sales pipeline up.

How to identify sales opportunities

Analyze your customer behavior and build a persona

Investigate your customer’s behavior, preferences, and needs to build detailed customer personas. A well-researched buyer persona helps you tailor your sales strategy to better resonate with your target audience.

Review purchase history and budget

Assess your customers’ previous purchases and their average spend to reveal buying patterns. A potential upselling and cross-selling opportunity is pinpointed by tracking buying behaviors.

Review current events

Staying informed about current events and industry trends helps you identify new sales opportunities. Also, changes in market dynamics or technology can uncover new avenues for your business.

Work with sales-qualified leads

A sales-qualified lead is differentiated from regular leads because they show a genuine interest in your product or service and are more likely to convert into sales. When your sales teams recognize qualifying leads, your time is prioritized by potential return on investment.

Use customer referrals

One of the best tips is to encourage your existing customers to refer new customers. This often results in high-quality leads, as they come in with a level of trust and credibility.

Establish third-party referrals or affiliate programs

In the same vein of customer referrals, you can collaborate with other businesses in similar industries to generate referrals. This expands your reach and brings in leads that you might not have accessed otherwise.

Use CRM software

CRM software simplifies the process of tracking and managing sales opportunities. It provides customer data analysis and sales metrics for better decision-making.

When your customer is monitored through CRM tools, he or she:

• Is assessed through sales funnel metrics.
• Is filtered from non-qualifying leads.
• Is profiled based on buyer personas.
• Is analyzed through customer interactions and feedback.

What is the difference between a lead and a sales opportunity?

The main difference between a lead and a sales opportunity is that a lead is a potential customer who has shown interest in your product or service. On the other hand, asales opportunity is a qualified lead that has a higher likelihood of converting into a sale.

The key difference is the sales opportunity is further down the sales funnel with a higher likelihood of making a purchase.

Now that you know how to identify sales opportunities, let’s take a closer look at what you do with an opportunity once you have it.

Sales opportunity management software

A sales opportunity is the stage where you introduce your product to a lead in hopes of landing a sale. This stage often involves stakeholder meetings, presentations, and demos — things that showcase your product and position it as a solution to the client’s problems.

Sales opportunity management software collects customer information in a report that, ideally, is reviewed during sales team meetings. This software helps your team:

• Prioritize which opportunities to pursue based on what is researched by studying industry reports.
• Create a to-do list of steps needed to land the sale.
• Make a competitive analysis of each prospect, such as stakeholder information, past interactions, and what is observed from industry shifts.
• Improve collaboration between sales team members.
• Perform market research based on what the competitors are doing.
• Collaborate with sales reps on the go through a mobile app.
• Store important documents like proposals, quotes, and invoices in an easily accessible database.

How can I maximize the conversion rate on my sales opportunities?

Prioritize opportunities

Not all sales opportunities are equal. You should prioritize each opportunity based on how it is evaluated against set criteria like potential revenue or how likely a lead is to convert.

Develop an effective sales process

A structured sales process ensures consistency and efficiency when handling opportunities. This process should be adaptable to different types of opportunities and customer needs.

Use automation and data analysis

CRM software helps you leverage automation tools and data analysis to gain insights into your sales process. This makes it easier to reviewi sales data that emerges from new product or service launches, for example. Plus, you’ll make more informed decisions from information that is highlighted in sales data trends.

What Is considered an opportunity in CRM?

An opportunity in CRM means the possibility of landing a sale. An opportunity can come from: 

• An invitation to bid from the customer.
• A lead that your sales team pursued.
• Trade fairs.

Again, while related, opportunities are different from leads. Leads are people or organizations who have shown interest in buying what you have to sell. It’s the job of your sales team to turn leads into opportunities by showing off your product to lead potential customers down the sales cycle.

You should know how to identify sales opportunities in these five major categories:

1. Net new business: This opportunity involves entirely new clients and accounts who haven’t done business with you.
2. Cross-sell: This opportunity means you’re selling another one of your products to an existing customer.
3. Up-sell: Upselling means you’re upgrading an existing product or solution that a customer already has.
4. Migration: When you migrate, you’re moving your customer from an old platform (typically a competitor’s) to a new one (typically yours). This is most often done in tech companies.
5. Renewal: Renewals involve convincing the client to re-up their subscription to software or service content.

To best capitalize on an opportunity, you need to implement opportunity management. Good opportunity management lets you control the sales flow and gives you a better shot at closing the deal.

How to find new sales opportunities

Knowing how to identify sales opportunities is different from identifying leads.

Leads don’t always result in an immediate sales opportunity, because the individual may not be ready to spend money right away.

In the case of sales opportunities, you already know that the potential customer is interested in your product and looking to buy.

The first stage of finding new sales opportunities is doing your research. You want to learn as much about your current leads as you can.

Next, you’ll want to qualify your leads and determine whether they currently fit your company’s sales criteria. This is important, as you don’t want to spend too much time on unqualified leads.

It is in these first stages that a CRM becomes useful for organizing your leads, as they enter the sales funnel and gives you a quick way to prioritize your sales opportunities.

Breaking down your opportunity into stages

Depending on your industry, your sales cycle can be anywhere from a few days to a few months. This is why it’s important to separate your opportunities by stage.

Here are the sales stages to consider when it comes to opportunity management:

1. Qualification: Before you put all of your efforts towards a lead, you want to make sure that the lead is qualified. Use pre-established criteria to make sure that your prospect’s level of interest and marketing persona align with your product or service. Once you determine that your lead is qualified, they become associated with a sales opportunity.
2. Identifying pain points: You want to determine how valuable a customer would find your product or services based on their pain points. Doing so positions you to promote your product or service in a way that speaks to the buyer.
3. Identifying key decision makers: You can build a positive relationship with any contact at a company, but if they are not the person who has the power to pay you, then your efforts may be wasted. You must build a relationship with the person who makes the purchasing decisions at the company to progress toward closing the sale.
4. Create a quote for review: At this point of the sales cycle, you are getting close to sealing the deal. Be sure to create a personalized quote that addresses your customer’s pain points and matches their specific needs.
5. Close: Once you finalize the details, you are ready to close the deal! Hopefully, you were successful in converting the opportunity. Even if you failed, it’s important to see every opportunity through to the end.

How to effectively manage your sales pipeline

Now that you have opportunities in your sales pipeline, you need a good way to manage them to ensure they convert into revenue. This is where the importance of opportunity management comes in.

Ready to get organized? Keep reading for five best practices when it comes to knowing how to identify sales opportunities.

1. Do your research

Although opportunity management isn’t the same as lead management, sales opportunities are closely related to leads.

To determine whether an opportunity is worth pursuing, you need to identify some key facts about your lead. These include their:

• Responsiveness.
• Budget.
• Purchase process.
• Authority.

This information gives you a realistic perspective on the likelihood of a deal going through. It also provides insights into what sales techniques your sales reps may want to use.

During the sales process, you want to keep your sales pipeline organized by assigning a stage to each opportunity, such as “Needs Analysis” or “Identify Decision Makers.” As you learn more about your lead and their needs, you can update the opportunity stage accordingly.

In Method CRM, the sales pipeline consists of nine built-in opportunity stages, each of which represents progress toward closing a deal.

As a fully customizable CRM, you can even create your own opportunity stages in Method to reflect the sales process steps and terminology your industry uses.

2. Stay focused on the most promising sales opportunities

There are only so many hours in a day, so you need to use them wisely.

However, this doesn’t mean spending an equal amount of time on each opportunity.

To effectively manage how to identify sales opportunities, use the data you’ve gathered to identify your most promising opportunities and prioritize those. These are often the deals:

• That produce the highest revenue.
• That are closest to closing.
• With the most engaged decision-makers.

Or, all of the above!

Regardless, the key to success is to have a process for recognizing which opportunities need special attention.

To better understand how to identify sales opportunities, each opportunity stage in Method CRM has an assigned probability percentage. Multiplying this percentage by the value of the opportunity gives you the amount of potential revenue in your pipeline.

For example, if you have a $1000 opportunity at the “Negotiating/Review” stage (90% probability; $900 in the pipeline) and a $1000 opportunity at the “Prospecting” stage (10% probability; $100 in the pipeline), it’s clear which one you should focus on.

3. Stay in touch with your prospects

The odds of a web lead entering the sales process are 21 times greater if the company contacts the lead within five minutes, compared to responding after 30 minutes.

The same principle applies to existing sales opportunities in your pipeline. If you wait too long to follow up with your prospects, they may turn elsewhere.

So, you need to ensure that you answer questions promptly and that your sales team schedules appointments in a timely manner.

At every stage of the sales process, each opportunity should have a clear next step or follow-up activity. This may be an email, phone call, or something more industry-specific like a pitch presentation or product demo.

Logging these sales activities in your CRM helps to keep your team in the loop so you’re not accidentally contacting the same lead repeatedly.

Luckily, Method CRM makes it easy for you to see which users have upcoming and overdue activities. Plus, you can also filter your list of opportunities to view those with no scheduled follow-ups as shown below.

4. Keep your estimates organized

Nothing spoils an opportunity faster than promising to send your customer an estimate and failing to do so.

Whether you were waiting on someone else, didn’t have the necessary info, or were reluctant to clutter up QuickBooks, it doesn’t look good when you can’t deliver early in the sales process. This is a key indicator that you need a clearer opportunity management process.

Using a CRM that integrates with QuickBooks solves these problems by making it easy to send as many estimates as you need. Not only can you create estimates using QuickBooks items (without needing direct access), but these estimates live only in Method CRM so they don’t clutter your QuickBooks account.

Better yet, once you close a deal, you can instantly convert the final estimate to an invoice. This means that your opportunity stays in Method while your invoice automatically syncs to your QuickBooks account.

5. Evaluate your opportunity management process

To win more deals and increase sales, it’s critical to review your process outlining how to identify sales opportunities and customer demand. This survey should occur at regular intervals so you can track your progress over time and find areas for improvement.

The more insight you can gain into your sales process, the better equipped you’ll be to optimize it. Thankfully, Method CRM displays several key metrics that make it easier to learn how to identify sales opportunities. These include:

• The ratio of won to lost opportunities.
• The average deal size per sales rep.
• The amount of revenue per opportunity source.

You can also dive deeper into your CRM data to look at other valuable metrics, like the: 

• Number of follow-ups per opportunity.
• Length of your sales cycle. 
• Satisfaction of your leads with your sales approach.

What’s next: What to do with leads and opportunities after you close a deal

Congrats! You now know how to identify sales opportunities and have turned your lead into a customer. But, your work is not yet over. Your focus should now be on your customer retention rate.

To keep your customers returning to your business, you must continue to nurture them to ensure that they continue to buy your products and services. Offering a special second-purchase discount or repeat customer perks are two easy ways to make sure you secure future sales opportunities from your existing customer base.

How to organize sales leads?

Successful companies use CRM software to segment leads based on various criteria like: 

• Industry.
• Location in the world.
• Interest level. 

Because these factors are centralized in the software, you can quickly access information and resources to tailor your sales strategy.

With CRM software, you filter each customer by how he or she:

• Is qualified based on potential revenue.
• Is segmented by customer demographics.
• Is reinforced by positive customer responses.

CRM software also: 

• Simplifies the process for your sales team.
• Improves sales team collaboration.
• Lets you identify sales training and continuous learning opportunities.

What is opportunity management in sales?

In sales, opportunity management is the act of organizing deals currently in your sales pipeline. 

Knowing how to identify sales opportunities helps you achieve your sales goals by prioritizing deals that are likely to succeed and strengthening your team’s sales approach.

Do you understand how to identify sales opportunities? Here are five signs that you need a designated system:

• You find it hard to determine which opportunities should be prioritized.
• You can’t measure the value of your sales opportunities.
• You don’t know the win/loss ratio of your opportunities.
• Your sales pipeline is slow and you see large gaps of time between customer touchpoints.
• You’re confused about what to do next when pursuing opportunities.

A proper opportunity management system helps you understand your prospects and potential customers. In turn, you can set priorities based on which ones are more likely to strike a deal with you.

Once you have an opportunity management system in place, you should follow these best practices:

• Research and find out the key details of every lead that enters your sales funnel.
• Break down your opportunities and prioritize the most promising ones.
• Automate busy work like sending a follow-up message and scheduling sales calls and meetings.
• Respond quickly to leads to show that you’re committed to delivering solutions.
• Ensure your sales team is on the same page with sales presentations.

What are sales opportunities?

Sales opportunities are prospects who are likely to become paying customers. They typically come from leads who see that your product or service can solve a pain point they have.

Opportunities start as leads. Leads are people who have shown interest in your product or service through one or more channels, such as downloading your promotional materials or receiving a sales call.

However, leads aren’t qualified yet, meaning they may not actually fit your buyer persona or have the budget to make a purchase.

It’s the responsibility of a salesperson to see whether a lead can feasibly buy and implement your product. If this prospect agrees to consider buying your product or service, it’s only then that they become sales opportunities.

To know how to identify sales opportunities in a lead or prospect, you need to identify these characteristics:

1. Pain point: People buy a product to solve a problem, so you need to spot the prospect’s pain points. Sometimes these pain points aren’t immediately apparent, so you may need to dig deeper to find a pain point that your product can address.
2. Interest in solving the issue: It isn’t enough to define the customer’s pain point. You also need to know if they want to solve this problem. If they’ve lived with that pain point for years, then there may be little interest in fixing it.
3. Product fit: If the prospect is interested in solving the problem, then you need to look at your product and see if it fits their business profile. If it doesn’t, scan for another product to sell.

What is opportunity management in a CRM system?

In a CRM system, opportunity management is the process of tracking all potential sales opportunities to convert them into revenue. A CRM system lets you: 

• Monitor and review your sales pipeline process.
• Prioritize your efforts on opportunities that are more likely to convert.
• Automate administrative tasks like email follow-ups and meeting schedules.
• Generate reports on sales pipeline performance.
• Find each opportunity that is uncovered through competitive research.
• Integrate and sync your tools with other platforms and processes.

Recap: Why you need a CRM for your opportunity management

Effective opportunity management takes time and effort, but the payoff is well worth it. If your business is struggling with how to identify sales opportunities in or outside of QuickBooks, it may be time to take a new course of action.

A CRM simplifies your opportunity management and gives you instant insights into your potential customers. For example, Method CRM helps you find how to identify sales opportunities effectively by:

• Tracking every interaction in the journey from lead to customer.
• Offering reporting that is recognized through market analysis.
• Providing you with a 360-degree view of every contact.
• Giving you an at-a-glance understanding of your sales pipeline and opportunities.

With Method CRM, it’s easy for you to take a data-driven approach when it comes to understanding how to identify sales opportunities.

Frequently asked questions (FAQs)

What sources can you use to identify new sales opportunities?

You can discover new sales opportunities from sources like:

• Customer feedback.
• Research on what each customer wants.
• Social media platforms.
• Industry networking events.
• CRM software with report generation features.

How do you attract sales?

Attracting sales involves a combination of: 

• Targeted marketing.
• Nurturing customer relationships.
• Offering competitive pricing.
• Providing excellent customer service.

Observe how each customer is understood by analyzing customer pain points. Demand for your product or service is determined by gaps in the market,  so look for any opportunity that emerges from customer feedback.

Our research indicates that a lead who is validated through customer testimonials is more likely to end up as a qualified opportunity. This means providing a place for customers to leave a review will more likely result in a new customer that is discovered through customer surveys.

How do you manage sales opportunities?

Managing sales opportunities involves tracking and analyzing each opportunity, often with the help of an integrated CRM platform. Prioritize opportunities using information that is targeted by understanding customer needs.

By developing a personalized approach for each opportunity and maintaining regular communication, your lead generation results will improve.

Ready to streamline your opportunity management? Start your free trial of Method CRM today!

The post 5 best practices for sales opportunity management appeared first on Method.

Lead management and opportunity management are often used interchangeably, but they’re not the same thing. These are both critical functions for every small business, so it’s important to make a distinction between them.

Not sure what the difference is? Keep reading to find out.

What is lead and opportunity in CRM

To start, let’s note that there are different schools of thought when answering, “What is lead and opportunity in CRM?”

Some describe a lead as a contact you don’t know much about. To these individuals, leads only turn into sales opportunities when they express interest in buying from you. However, this mindset gets confusing.

For the sake of clarity, we view a lead as a potential customer whose contact information you’ve acquired. Note that a lead may refer to an individual or a company, depending on your sales process and business.

When it comes to sales opportunities, you can think of an opportunity as a source of potential revenue for your business. In other words, it’s any chance you see to sell your product or service to someone.

Since sales opportunities aren’t the same as sales transactions, opportunities exist solely in your CRM or sales tracking system and do not affect your finances.

Not surprisingly, leads and opportunities are closely related. For example, say a marketing consultant is approached by a retail store that needs help with its social media strategy.

The consultant now has a new lead (the store) and a new opportunity (to consult on social media strategy).

Method:CRM users: Stay organized while speaking to multiple people at the same company by adding new contacts to an existing lead.

Leads vs. opportunities: A closer look at the differences

As explained above, a lead can be a company, an individual, or an individual within a company that your sales team has identified as a potential customer.

You may or may not have had any direct contact with a potential lead, but they have agreed to share their contact information with you.

It’s important to note that not all your leads are equal. Below are the seven major ways to categorize your leads.

What are the different types of leads in sales?

• Cold leads — These are leads that have had minimal nurture and little-to-no contact with your business.
• Warm leads — These are people who are familiar with your company and what you do. You or your team may have already had contact with them in the past.
• Hot leads — A hot lead is a contact with a good chance of purchasing from you. They may have reached out for more information on your products or expressed interest in buying from you.
• Information qualified leads (IQLs) — These are leads that have come to you through gated content like an ebook or report. You have their contact information, but these leads may have not shown specific interest in purchasing from you.
• Marketing qualified leads (MQLs) — MQLs are considered to be further down the sales funnel than IQLs. MQLs are similar to IQLs in the sense that they come from your marketing efforts, but are usually more familiar with your business and products.
• Sales-ready lead — A sales-ready lead is one where a potential customer requests to speak with a salesperson. They may still be on the fence, but are interested enough to discuss the possibility of purchasing from you.
• Sales qualified leads (SQLs) — Once a member of your sales team has qualified a lead or opportunity, they are now an SQL.

How to decipher lead quality

Some leads are ready to buy the product or service you offer, while others have just recently heard about your business. This is where lead qualification and prioritization come in.

When evaluating lead quality and the likelihood of a purchase, the BANT framework is helpful.

The BANT method uses the following criteria to evaluate leads:

• Budget: Does this lead have enough of a budget to buy my goods or services?
• Authority: Does this lead have the decision making power needed to buy from me?
• Need: Does this lead need my products or services?
• Timing: When is this lead looking to purchase?

By asking yourself these questions, lead prioritization becomes a lot easier. And better yet, using BANT might even increase your win rate and sales!

What should I look for in my leads?

When making the distinction between what is lead and opportunity in CRM, your lead is ideally the person with purchase authority or is someone who can influence the decision maker. It’s even better if your lead is currently in the market for the product or service you sell.

You’ll also want to do your best to find leads that align with your target industries and buyer personas.

For example, imagine that you sell the forklifts that warehouses use for order picking.

The type of leads you want are companies that have warehouse operations. As a result, you should seek out and prioritize the Procurement Leads and Warehouse Managers at these companies, as you can assume they’ll check at least half of the BANT requirements.

Not to mention, they’ll know the difference between forklift models and understand the benefits of your forklifts over those of your competitors.

When it comes to sourcing leads, a targeted approach as mentioned above results in more sales opportunities and closed deals.

Now that you’ve learned some lead generation best practices, let’s move on to when your leads become opportunities.

When does a lead become an opportunity?

When it comes to answering, “What is lead and opportunity in CRM?” opportunities are associated with leads that have a high chance of converting into a sale. The transition from a lead to a sales opportunity often results in some qualification by your sales team to ensure only legitimate opportunities go into your sales pipeline.

How do I convert leads into sales opportunities?

Your business probably has specific steps that your sales and marketing teams follow to get a lead through your sales funnel, some of which we’ve covered already.

On a high level, lead and opportunity management help you convert leads into opportunities by trying to accomplish the following:

• Seeking out the right leads and contacts. These are the people who need your products and services, can afford them, and have the authority to make or influence the purchase decision.
• Having effective communications with a lead or contact. This means establishing touchpoints for engagement with potential customers (ie., a mobile app or web form), showing the value that your service or product provides in addressing their needs, and developing a rapport with them. You can achieve this through the content on your website, social media engagement, and email nurture campaigns.
• Following up with leads to qualify them as opportunities. Usually for a lead to become a sales opportunity, there will have to have been some direct communication between the potential client and someone on your sales team or in your organization who recognizes that there is a high possibility of a sale.

Of course, these are just the basic ways of converting a lead into a sale. But, usually, all three happen when leads become sales opportunities.

Where do leads and opportunities come from?

Since we’re all on the same page regarding what is lead and opportunity in CRM, let’s look at how to get more of them.

Thankfully, there are countless ways to acquire new leads and unlock sales opportunities. A few examples are:

• Networking at events.
• Online lead gen forms.
• Getting referrals from existing customers.

Depending on how you generate leads, you may acquire sales opportunities simultaneously, or the opportunities may arise later.

Regardless, your best shot at turning these leads into customers is to get their contact information into your CRM so you can follow up with them.Method:CRM users: Click “Setup” on your Web to Lead app to change the Method user that new web leads are assigned to by default.

What is lead and opportunity in CRM?

Before getting into what is lead and opportunity in CRM, let’s take a quick refresher on CRM.

CRM stands for customer relationship management. It’s a system or process your company has for handling all the interactions you have with your current, former, and potential customers.

Using a CRM to manage your leads and opportunities is helpful because it:

• Simplifies your lead qualification and nurture process.
• Automates time-consuming and manual sales workflows.
• Tracks your sales opportunities and leads’ progression.
• Is categorized for better organization so each lead is targeted with specific marketing campaigns.

Every lead is managed within the CRM system and is updated with new interactions or data, which helps you: 

• Speed up your sales process. 
• Better connect with leads.
• Become a top sales performer.

What’s the difference between lead, opportunity, and contact management in your CRM?

Next, let’s look the difference between contacts and what is lead and opportunity in CRM.

To start, lead management is the process of qualifying, tracking, and engaging with your potential customers.

Using a consistent qualification methodology (such as BANT) helps you identify which leads are most likely to buy. As you generate leads, you can identify each one that requires follow-up to move forward and reduce the length of your sales cycle.

Method CRM lets you rate leads as hot, warm, or cold, making it easy to filter for the most promising prospects.

The rationale for opportunity management in a CRM is similar. Ideally, you want to focus your energy on the highest-value deals that are most likely to go through. You accomplish this by assigning opportunity stages in Method CRM.

Each stage, from prospecting to negotiation, has an assigned probability percentage that indicates how close you are to closing the deal and shows you the potential revenue in your pipeline.

Now onto contact management. Contact management is the storing, organizing, and tracking of your:

• Leads.
• Customers.
• Vendors.

Using a CRM is particularly valuable for contact management as it acts as a hub for all the information you have on these business relationships.

When it comes to contact management, your CRM is a central record of your contacts’: 

• Phone numbers.
• Addresses.
• Transaction history — and more! 

By housing all this data in one system, you ensure the information you need is easy to find and share with your whole team.

With plenty of moving parts associated with lead, opportunity, and contact management, understanding what is lead and opportunity in CRM is a great way to keep track of all this information.

How do I create a customer relationship management system for my business?

There is not one specific answer to this question, as each business implements a CRM process that is customized to meet its needs.

Having said that, there are a few things that a CRM system tries to accomplish regardless of what business you’re in. Here are the key purposes of a CRM solution like Method:

• Act as a contact goldmine — Your CRM holds all the information about customers, leads, and vendors, including all previous communication and interactions your business has had with them.
• Instant access to up-to-date information — A CRM keeps everyone connected and empowers your team to make decisions with data that are accurate and updated in real time.
• Provide a 360-degree customer view — A CRM gives you insights into the behavior of your leads and customers that you can use to improve your marketing and sales strategies.
• Streamline your sales and customer service — The online portals many CRMs offer take work off your team’s plate by enabling immediate self-service for your customers.

How CRM helps in lead management

CRM solutions play an important role in helping you capture leads. With a CRM, each lead is captured from various sources and is identified at the initial stage before it is tracked through the sales funnel — with little to no work from you needed.

A CRM tool makes sure every lead:

• Is prioritized based on potential value.
• Is segmented based on demographics or behavior.
• Is scored based on likelihood to convert.
• Is monitored for activity and engagement.
• Is analyzed for sales forecasting.

Using these CRM metrics offers insights into customer behavior and preferences that is measured against sales goals. They also help you:

• Organize lead information.
• Monitor communication.
• Ensure a timely follow-up. 

Knowing all the details is the only way to tell the difference between what is lead and opportunity in CRM.

Stages of a sales opportunity

A sales opportunity goes through several stages in the CRM process that contribute to the success of the conversion. These stages are:

Discovery

The discovery stage is the first point of contact with a potential lead. At this stage, you use CRM tools to gather as much information as possible about the lead. These details are crucial for understanding the lead’s needs and how your product or service can meet them.

Proposal made

Once you identify what is lead and opportunity in CRM and how your products or services might be a good fit, you’re ready to make your tailored proposal.

Your CRM system will make sure the lead is documented with all relevant details and ensure this information is communicated to the sales team. Each lead is assigned to a specific sales rep depending on how that lead is qualified based on set criteria.

You can assign a qualification process to your sales reps to problem-solve how a lead progresses through different stages.

Closing

The closing stage is the final step, where your lead is closed either as won or lost. Your salespeople can use the analytics support provided by CRM software so that each lead is engaged through personalized interactions.

CRM systems aid in the closing process by letting you manage prospect conversion and ensure every lead is nurtured with relevant content for a simplified transition to closing.

Who should care about lead management and opportunity management?

Lead management is of great interest to marketing and sales teams. Helping your teams identify what is lead and opportunity in CRM is important to your revenue generation. Here’s why.

Your marketing team wants to know who your leads are and where they came from, so they can design effective email campaigns and invest in marketing efforts with high ROI.

Meanwhile, your sales team needs to link those leads to opportunity management so they can:

• Identify potential sales.
• Build relationships.
• Generate revenue.

The prospect of revenue also makes opportunities in the pipeline very important to sales managers, as they use pipeline management data to forecast future performance.

Of course, some small business owners wear all of these hats. In this case, all of the above is relevant to knowing what is lead and opportunity in CRM.

Method CRM users: Check out the “Opportunity by Stage by Close Date” chart for a visual overview of how opportunities are distributed across different stages in your pipeline.

What is the difference between lead management and opportunity management?

The main difference between lead management and opportunity management is that lead management focuses on identifying and nurturing potential customers. On the other hand, opportunity management deals with a qualified lead that is converted into a potential sale. Opportunities are further down the sales pipeline and are actively considering a purchase.

Your goal is to convert a lead into an opportunity as it represents potential revenue for the company. Both roles are critical to what is lead and opportunity in CRM.

What happens to leads and opportunities after you close the sale?

Every lead starts as a potential customer, but what do you do when they become a full-fledged paying customer?

When you close a deal, the best practice is to update the stage of the opportunity to “Closed Won.” Next, you’ll have to convert the lead into a customer.

Luckily, doing this in Method CRM is as easy as unchecking a box. Your newly converted customer will automatically sync over to your QuickBooks file, along with their contact and billing information.

In Method CRM, closed won sales opportunities will remain in the CRM and will not sync to your QuickBooks account. They will no longer appear in your sales pipeline, but they will appear in the won charts section of your Opportunities app, and you can refer back to them anytime.Method CRM users: If you created an estimate for your lead, save time by converting the estimate into an invoice. Creating an invoice for a lead will also automatically convert the lead to a customer.

Recap: How to qualify leads and move sales opportunities through your pipeline

Identifying what is lead and opportunity in CRM software is crucial for every business. No matter what industry you’re in, sales are the lifeblood of your business.

This means that nurturing your leads into opportunities and those opportunities into paying customers is one of your business’s most important activities.

Using a CRM solution for lead and opportunity management provides you with:

• A goldmine of data your business can use to better understand your customers and grow your business.
• A shared sense of truth everyone in your organization can access, update, and use to serve your customers better.
• Reduce your operational costs by letting your customers make changes and view transactions with self-serve customer portals.

In other words, using a CRM solution to automate your sales pipeline and manage every customer relationship helps you save money and win more business.

Frequently Asked Questions

What should I look for in my leads?

You should look for the potential to purchase in your leads by assessing, their:

• Engagement with your marketing materials.
• Budget.
• Decision-making authority (are they a manager that can make the purchase, or will they need to get the “okay” from someone higher up) 
• Business needs.

These factors help prioritize your leads.

When does a lead become an opportunity?

A lead becomes an opportunity when they show a strong interest in your product or service. This is usually after you’ve engaged with them and determined that their needs line up with what you offer.

A key part of identifying what is a lead and opportunity in CRM is knowing when to categorize a lead as an opportunity.

How do I convert leads into sales opportunities?

​​To convert leads into sales opportunities, focus on:

• Building a relationship with the lead.
• Understanding what they’re looking for.
• Showing how your product or service meets their needs.

CRM tools give businesses a simplified communication process and automate timely follow-ups for effective revenue generation.

Maximize your sales: Start your free trial of Method CRM today.

Image credit: Monkey Business Images via Shutterstock

The post Business Opportunity Lead – What is Lead and Opportunity in CRM appeared first on Method.