Sales are a result of understanding and nurturing prospects through a buyer journey which causes them to transform from prospects to leads, to opportunities, and finally to closed accounts. Let's focus on why converting leads to opportunities is so important.
If you're new to a CRM system or just not familiar with sales jargon, then the difference between a lead and an opportunity may be hard to understand. It's easy to just think of them as buzzwords, but a lead and an opportunity are different and it's important to understand how they impact your sales process.
A prospect list is a list of names, email addresses, or phone numbers of people that may be a good fit for your product. A sales lead is a person who has shown some interest in your business. For example, they might have filled out a form, replied to an email, or scheduled a call with a sales rep. This occurs at the top of the sales funnel. A sales opportunity is a qualified lead who has shown high interest in a product or service and is likely to become a customer. Opportunity is further down the sales funnel.
Names, email addresses, or phone numbers of people who may be a good fit for your solution.
A lead is a potential client who has expressed interest in the services or products you offer.
A sales opportunity is a qualified lead with a high likelihood of becoming a customer.
Upgrading a Lead to an Opportunity
A prospect list is a list of people who could benefit from your service. They share common characteristics and demographics that fit typical customers of your products and services.
Sales and Marketing teams use these lists to identify and contact prospective customers.
A lead has shown interest in the company and has gone through the sales qualification process.
Sales opportunities arise when qualified leads consider opting into your solution or service.
BANT is a common acronym used to define opportunities. If the lead has the following characteristics, its typically time to convert it to an opportunity:
Gaining and tracking leads is vital for your business. However, what is happening to those leads? Are you converting them? If so, how many? Measuring and collecting sales opportunity data will help you determine if you have a good lead source and can help you hold your sales team accountable.
Your company expects you to bring in sales today but also forecast sales for tomorrow.
When you convert a lead to an opportunity, you can then forecast the expected $ amount the deal will drive-in. Add all the deals up and you can get an idea of how much business will close and if you're tracking the expected close rate, you'll know when!
Having a large pipeline is great, but determining how many you're converting is vital. By measuring your sales opportunities you'll be able to determine if you have a good lead source. If you're noticing many leads are becoming opportunities it's safe to say the lead source is good. If you're noticing a low conversion rate then it's time to try another lead source.
Now that you've determined if your lead source is good or bad you can better hold your sales team accountable. If you determine your lead source is good and converting then it's up to your sales team to close the deal.
As a baseline, your team should be able to close at least 30% of the opportunities created. For example, let's say your marketing team generates 100 leads. Out of those, 40 opportunities are created based on the following criteria:
The sales team should be able to close 12 deals. If they're not, you can dig deeper on the sales side to understand why deals are not converting.
Are you in limbo when it comes to prospects, leads, and opportunities? Limbo often comes from a sales team that doesn't know how to move prospects through a sales funnel! It's vital that the sales team knows where the person is in the sales funnel and whether they are a prospect, lead, or sales opportunity.
Is the lead ready to buy? Call them. Our number one advice to suppliers is to call fast to beat out the competition.
A lead won’t become an opportunity with just one call. You need to call often and make your service known. Make sure you’re calling and emailing often.
Together as a team define what a prospect, lead, and opportunity is to your organization. Then create systems and processes to adhere to this definition and hold people accountable for moving prospects through the defined funnel.