What is Opportunity Management?

Opportunity management, often referred to as OM, is a process within sales that allows businesses to first identify and then capitalise on potential sales opportunities.

The process involves identifying promising leads and then tracking and pursuing them into the sales pipeline to convert them into long-term customers.

The operative words here, however, are “promising leads”. Essentially, OM is about triaging leads, so to speak, and focusing on the right ones, so it’s not just about tracking all potential leads.

This is how opportunity and lead management differ.

 

The Difference Between Opportunity Management and Lead Management

 

While both opportunity management and lead management are involved in identifying leads with the intention of converting them into real business, the focus of each process is slightly different.

In the simplest of terms, the latter is more general. Lead management casts a wide net over potential new customers, including all potential leads without distinguishing between the most and least promising among them.

The former, on the other hand, is more specific. Opportunity management is more focused on actually evaluating the relative potential of each lead. The intention is to pick out which leads have the most promise and are most likely to be converted into real business.

The reason that OM is important is that by identifying which leads are likely to result in sales and which ones are not, sales staff are able to focus on the right leads and avoid wasting time and resources.

Opportunity management allows for resources to be directed towards leads that are mostly likely to result in sales, rather than simply making a general effort to make sales.

Another way to look at the difference between lead management and opportunity management is that the latter is a subset of the former.

First, all leads are identified. Second, general leads are narrowed down a bit more into potential prospects. From the pool of prospects, actual sales opportunities are identified based on more specific factors affecting viability, leading to sales opportunities. Finally, opportunities are converted into customers.

Thus, lead management is where the sales process begins and opportunity management is the final step before sales are made.

 

 

The Process of Opportunity Management

 

Opportunity management is one of four stages within the sales process, but OM in itself can be broken down into three essential steps. Identify opportunities, allocate them to sales representatives and apply sales conversion techniques.

Before you get started with the process, you need to actually establish the process, creating a clear and straightforward pipeline that leaves little to no room for confusion.

Part of the process ought to include creating a knowledge base for sales reps to refer to and learn from. This can include things like case studies representing opportunities similar to the ones your company is dealing with along with frequently asked questions and more. This allows for an element of self-learning.

Part of the knowledge base should involve an outline of the criteria for sales opportunities as well as a method by which they’re distributed to sales reps.

For maximum efficiency, you can set up the automation of specific tasks like lead opportunity assignment and allocation notifications.

From there, it’s always a good idea to have an effective way to be able to track sales and monitor sales opportunity metrics.

Once these structures are in place, sales representatives can embark on the sales opportunity pipeline.

 

1. Identify Sales Opportunities

 

Identifying sales opportunities is more complicated than it sounds. It requires proper analysis of the potential lead alongside your business’s opportunity criteria. That is, the specific aspects of a potential client that makes them compatible with your company.

Often, part of the process of identifying sales opportunities is evaluating employee or customer referral leads, as well as leads that boast high engagement scores.

What distinguishes lead identification from opportunity identification is the fact that the leads will express particular interest in your brand and products rather than just a general interest in the market. In some cases, they may even express interest in multiple products or services, in which case, each one ought to be identified and channelled as separate opportunities.

 

2. Allocate Opportunities to Sales Reps

 

Once you’ve got a list of solid opportunities, it’s time to allocate them to specific sales reps so that they can follow up.

However, as we mentioned previously, it’s possible that one lead may represent multiple different opportunities. If that’s the case, each opportunity needs to be allocated to the appropriate sales rep for each domain.

Now, this can be done manually, but it’s far more efficient to automate the process. Not only does this help businesses with lots of potential leads and opportunities, but it also ensures that opportunities aren’t missed and that the allocation process is conducted accurately.

By using CRM software to handle sales opportunities, the process will be more effective and efficient, saving business resources and eliminating the potential for human error.

Part of the allocation process is notifying sales reps that they’ve been allocated sales opportunities. This is another part of the pipeline that is best managed by CRM software as it ensures staff are notified appropriately and that nothing slips through the cracks.

 

3. Close Sales

 

Finally, once the opportunities are in the hands of the appropriate reps, it’s time to close sales.

If the process has been done properly, identifying opportunities according to the business’s client criteria and allocating them to the right domains, sales reps will be equipped and ready to implement sales closing techniques, successfully converting opportunities into customers.

 

The Importance of Opportunity Management in Sales

 

Within the sales pipeline, opportunity management allows businesses to be more intentional about how and where they direct their efforts and resources.

Properly identifying sales opportunities and distinguishing them from mere leads also increases businesses’ chances of converting sales, as the potential clients they follow up with are more likely to be interested in what’s on offer.

Ultimately, it’s all about targeting sales efforts effectively and efficiently, making informed decisions in order to increase the chances of solid, long-term success.