This post is the 2nd in a series of 5 posts highlighting best practice tools to measure winnable opportunities. Here we had a low average selling price and were using salesforce.com.
There is logic to this approach but
it is one-dimensional. You may be at an early stage with a prospect who
has bought from you at their previous company and have a high likelihood of
winning or be at a later stage in 3rd place with a very low
probability of winning.
Stage completion probabilities also
suffer a timing problem when used for pipelines and forecasts– what happens
when you have completed most of the opportunity stages – say you’re 80%
complete -- and although you are
confident you will win, there is a good chance the deal will roll into next
period?
Do you sandbag by changing the close
date to next period and try to bring in the big surprise this period? Do you leave it in this period but detach the
stage probability from the stage itself and use it to show the probability of
winning this period vs. winning at all?
If you take this approach, how do you track general winnability?
In a perfect world, you’d want to
measure multiple dimensions of winnability, like how far you are in the cycle,
how likely the prospect is to buy anything and how likely they are to buy from
you.
In emerging markets where the
competition is small and fragmented and doesn’t show up regularly in every
deal, tracking how good the fit is and how likely the prospect is to buy
anything can be a good proxy for how likely you are to win.
This scoring tool example is an example of scoring both fit and how likely a prospect
is to buy anything. This was done in
Salesforce.com and, like the first example, has 10 questions. These are carried both at the lead and (shown
here) opportunity levels.
There are some ‘table stakes’
questions that didn’t score any points but are critical to a good fit that could
be answered after an early qualification call – like ‘do they primarily sell
with a direct sales model?’ and ‘is new account business important to their
sales effort.’
Other questions like ‘is there a
compelling event?’ or ‘have we spoke with the line VP?’ typically took more
time to understand and execute. An
example of a proxy for ‘will the prospect buy anything’ was ‘how long have they
had Salesforce.com?’ We found that
companies that had Salesforce.com longer were more likely to be aware of its
shortcomings and so further appreciate our product.
While the table stakes questions
were not scored, the others were. Six
were equal to 10% and the main correlator was worth 30% so there were 90% winnability
points possible. The reason we used percentages
and a total of 90% points here was so we would could look at this number in
conjunction with the opportunity stage completion percentage and easily compare
them.
This scoring approach is valuable
for multiple reasons. It quickly flags
differences between the winnability and opportunity stage completion
numbers. If you are at an 80%
opportunity completion stage and you show only a 20% chance of winning, it is worth
a conversation with the rep about fit and tactics.
(Index of the 5 posts on opportunity scoring)
- Simple Opportunity Scoring (medium
average selling price (ASP), spreadsheet)
- Winnability Scoring #1
(low ASP, Salesforce.com)
- Winnability Scoring #2
(medium ASP, Goldmine)
- Sales Resource Prioritizer (high ASP, spreadsheet)
- Client Success Scoring (high ASP, spreadsheet)