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"Are you crazy?" you ask. "If I
disclose all the opportunities I know about to my sales manager, I'm in for a
quota increase for sure." Unfortunately this attitude is far too prevalent
and it significantly inhibits our ability to manage sales.
Development of a detailed profile of the opportunity pipeline is the most
disliked phase of a formal account planning process. Beyond fear of a goal
increase, sales people don't like being put on the spot to disclose all the
opportunities about which they know. Not only that, documenting the opportunity
pipeline is tedious work. In the account planning environment, a skilled
facilitator will probe for new opportunity ideas until all the possibilities are
exhausted. It is a primary role of sales management during account planning to
excite thought about new areas of sales opportunity in the account, as well as
to keep the sales team honest in their appraisal of the revenue opportunities.
During this exercise, the sales teams tend to be very conservative in their
estimates of the revenue potential.
In the account planning venue, it is critical to obtain agreement from all
parties in advance that the identified opportunity profile is not to be treated
as a forecast.
MEMO TO
SALES MANAGEMENT: The fastest possible way to destroy an account planning
effort is to behave as though you consider the identified opportunity pipeline
to be a forecast. Your sales staff has to believe that you will treat the
opportunity pipeline as simply the universe of possible opportunities, some of
which will be won and some will be lost.
In my account planning methodology, an
identified opportunity is one for which we can answer six questions, in the
following format:
USER APPLICATION PRODUCT REV ($) WHEN?
CONTINGENCY
DEFINITIONS:
USER - Who will be the end user of this installation? It could be a
department or a business unit.
APPLICATION - What business
application or requirement that this opportunity will satisfy?
PRODUCT - What product(s) will be
required to meet this customer business requirement?
REV ($) - What is the revenue
associated with this opportunity?
WHEN? - When is the revenue
projected to occur?
CONTINGENCY - These are barriers to
winning the opportunity. Please do not list competition here (the assumption is
that every deal is competitive) unless there is a very unique competitive
circumstance.
Once the identified opportunity profile is completed, the various opportunities
can be classified. I use three categories:
FLOW BUSINESS - This is the business
that happens whether we do anything or not. Generally these consist of a large
number of very small orders, including add-on equipment, upgrades, etc.
POINT OPPORTUNITIES - These are the
"stand-alone" deals that are not tied to a larger initiative.
Generally these are the mid-size opportunities that make up the bulk of our
business.
STRATEGIC INITIATIVES - These are the
large, strategic opportunities that have the potential to change the
"landscape" of our relationship with the customer. These deals may be
strategic because they are very large, because they address a critical customer
business need, or because they open the door to very large opportunities in the
future.
In account planning, we don't spend time on Flow Business. We look to the sales
team to develop plans to win the Point Opportunities. We spend our time
developing detailed plans to win the Strategic Initiatives because these are the
opportunities that really make a difference.
Whether you utilize a scheme such as Miller Heiman, Inc.'s Sales Funnel, the
approach I've outlined above or another opportunity pipeline management process,
getting your arms around the opportunity pipeline is a critical component of any
sales planning process.
Even though sales people don't like to do this work, the payoff for fully
documenting the opportunity pipeline is huge. It provides the sales team and
first line management the justification needed to obtain scarce resources that
are almost always required to develop an account to its fullest potential.
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