What is a sales opportunity, and when do you know it’s not a lead anymore?
In this article, I am writing about the first stage opportunity, immediately after it’s converted from a lead — the true starting point of a selling process. A sales opportunity is a qualified prospect that has a high probability of becoming a customer.
This might seem like a picky point, but every sales rep knows that a “sales opportunity” is when you are working with a qualified prospect that has a good chance of becoming a customer. But what does “qualified” mean, and how do you know the chance of a deal is not imagined? After all, typically only 10 to 15% of B2B sales opportunities become deals.
Lead vs Opportunity
A lead is an individual who’s a targeted customer but hasn’t yet been qualified. For example, they could have been contacted by a sales rep via a cold call or a cold email. This is an opportunity of a qualified prospect with a high chance of closing.
But a “sales opportunity” is more than a “lead,” and herein lays the rub. Many think that a lead becomes an opportunity when you qualify based on BANT criteria — Budget, Authority, Needs, and Timeline. However, as the name of this article suggests, that’s not the case in my opinion.
The reason is this — it should not be necessary to know the prospect’s budget, timeline, or authority right at the very beginning when you’re just deciding whether you have enough there to convert the lead to an opportunity. If the prospect tells you that she has budget and a 30-day timeline to buy your product then you have yourself a nice late-stage opportunity with maybe an 80% chance of closing, not a first stage opportunity that typically comes only at a 10 to 15% win rate.
Lead vs Prospect
Sometimes there’s confusion between a lead and a prospect. A lead is an unqualified contact, while a prospect is a qualified potential contact that has been moved into the sales process as a customer or client.
So, how can you move leads and prospects to opportunities? Look for these characteristics.
Characteristics All Sales Opportunities Must Share
I think we can all agree that a lead needs to have some sort of pain (AKA need) before they can be converted into an opportunity. People generally buy to reduce pain, so if there isn’t pain, there probably isn’t a high likelihood of a sale.
However, it’s the job of the sales rep to identify that pain. Just because a prospect doesn’t explicitly express the pain to you out of his or her own volition doesn’t mean there is none. To be successful in sales, a sales rep needs to develop the right qualification skills to bring that pain to the surface and pull it out of prospects by asking carefully crafted questions.
The next thing I look for is interest. For example, the prospect might be aware of their problem, but does that mean they’re interested in solving it? Ask them how long they’ve had this problem. If they say it’s been around for 20 years, then why would they care to solve it now? They’ve lived with the issue a long time without being bothered by it. There is clearly little interest in solving it. Executives must pick and choose their battles, and the most acute pain will get solved first.
Let’s say you have a prospect that has a pressing need and a strong desire to solve the problem. Just one issue. They operate a three-person company, and your product is made for businesses with 100+ employees. Does this person represent a sales opportunity?
No, because they’re not the right fit for your offering. They might want to buy your product, but the salesperson shouldn’t sell it to them. Since the product and the prospect’s situation aren’t well aligned, it’s a recipe for an unhappy customer. And unhappy customers often take to online review sites to express their frustration.
What You Don’t Need to Qualify a Sales Opportunity
In my opinion, these three traits are the only criteria salespeople need to establish before converting a lead to an opportunity in their CRM. Sales reps who qualify with the BANT framework might be a bit confused. For instance;
- Where’s the budget qualification?
- The timeline?
- The authority?
If you are able to establish B, A, N, and T during a first call, then you don’t merely have an opportunity on your hands — you practically have a deal! The prospect is far more advanced than a first stage opportunity.
By definition, an opportunity means that you have a chance of selling a customer — not a guarantee. A fully BANT-qualified prospect is essentially a guarantee. An opportunity is a prospect that has pain, interest in solving that pain, and fit. A salesperson can pick up on the budget, timeline, and authority throughout the sales process to further qualify (or disqualify) the opportunity.
Using these three criteria to upgrade leads to opportunities ensures that sales managers and leaders analyze apples to apples in reporting. Once you’ve established the milestones a lead needs to satisfy to be considered an opportunity, put similarly well-defined criteria in place for the other stages in your sales process. Clear exit criteria ensure consistency and repeatability; the foundations of a strong sales process.