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What is opportunity in CRM?

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As a business owner, you always want to optimize your customer relationships and sales processes. That’s where a CRM comes in.

Understanding what is opportunity in CRM (customer relationship management) is an important way to distinguish yourself from your competitors. 

Keep reading to learn:

  • What is opportunity in CRM vs. a lead?
  • What is the sales pipeline?

Tools to manage a prospective customer and improve your chances of conversion.

A good understanding of what is opportunity in CRM helps you:

  • Increase your conversion rates.
  • Grow your customer base.
  • Make your sales process more efficient.

Let’s take a closer look at how you can achieve this!

What is opportunity in CRM?

A sales opportunity in CRM is a prospect with a high chance of purchasing from your business. By identifying opportunities, you can focus on prospects with the greatest potential to close.

Not to be confused with a lead, opportunities are further along in the sales pipeline. You’ve identified them as much more likely to purchase from you. 

Understanding what is opportunity in CRM — as opposed to leads — helps you focus on the prospects most likely to make you money.

What is the pipeline?

Your sales pipeline demonstrates how far your prospects have moved through your sales process, from showing interest as a lead to closing on a sale. 

Deal stages tracking in your CRM shows you in detail how an opportunity moves through each stage along the sales pipeline.

The pipeline shows nine opportunity stages:

  1. Prospecting: Identify how interested a prospect is in your product or service.
  2. Qualification: The prospect undergoes qualification based on set criteria (e.g., how interested they are, how likely they are to purchase, etc.)
  3. Needs analysis: Determine whether or not your product or service fits their requirements to make a sale.
  4. Value proposition: Understand the value of your product or service through the eyes of your prospect. Conduct a competitor analysis to shed light on your strengths and weaknesses.
  5. Identify decision makers: Identify which people have the power to make purchasing decisions and nurture your relationship with them.
  6. Perception analysis: Find out how your customer perceives your product or service and what their expectations of it are.
  7. Proposal/price quote: Review your quotation and proposal management plan and send off documentation.
  8. Negotiation/review: Work out the final details to close the deal.
  9. Closed: In this final step, there are two possible outcomes:
    1. Won: A sale is agreed upon between you and your lead, and they become a customer.
    2. Lost: The prospect chooses not to purchase your product or service. CRM software documents this data to help you improve your sales pipeline.

These stages represent the progression of a sales opportunity toward a successful sale. The closer an opportunity gets to the win-and-loss stage, the more potential revenue that opportunity is worth. This is called the pipeline amount.

In other words, your pipeline amount represents the value of potential revenue that an opportunity is worth. Let’s explore this idea further.

Actual revenue

Generally, you’ll want to assign an amount to your sales pipeline that shows how much actual revenue that opportunity is worth when you close the sale.

For example, if a prospect is interested in painting a room, and your company charges $1,000 for that service, then the actual revenue of that opportunity is valued at $1,000.

Pipeline amount

You calculate your pipeline amount by finding the probability percentage of the current pipeline stage and multiplying it by the actual revenue amount.

So, if your actual revenue for painting the room is $1,000, and your opportunity is in the prospecting stage of the pipeline with a probability percentage of 10%, then the pipeline amount for that opportunity is $100.

What is the difference between lead and opportunity in CRM?

In CRM, a lead represents a potential customer who has shown interest in your product or service. Leads come from sources like:

  • Marketing campaigns.
  • Website visits.
  • Cold calls.

So what is an opportunity in CRM? It’s a lead that you qualify as a good prospect and is further along in your sales funnel. An opportunity has an associated probability of closing, more so than leads.

You qualify a potential customer based on criteria you set to decide whether they are a lead or an opportunity. Making this distinction helps you target each qualified prospect more effectively.

To help you answer, “What is opportunity in CRM for my business specifically?” be sure to develop an ideal customer profile. This helps you measure what qualifies your best prospects to direct your efforts.

Why do you need an opportunity management tool?

An opportunity management tool simplifies tracking and nurturing for sales opportunities. It helps you categorize and focus on high-value prospects so that your sales representative can prioritize your best potential buyers. These tools are designed to help you better identify what is opportunity in CRM.

An opportunity management platform will document information on your customers to give you valuable insights and analytics that you can share with sales managers. This data:

  • Provides a number of insights into customer needs and preferences.
  • Influences sales strategies and decisions.
  • Offers a view of potential business growth.

You can use this information to upsell based on the opportunity’s products/services association.

By leveraging an opportunity management tool, you ensure your customers:

  • Can be tracked in a visual sales pipeline.
  • Can be categorized based on priority or size.
  • Are more engaged because of benefits from collaborative efforts of the sales team.
  • May have associated tasks or actions marked for your sales team.
  • Receive financial documentation that carries an estimated revenue value.

Method:CRM — The best opportunity management CRM

Method is the #1 CRM platform for QuickBooks and Xero users. This powerful business tool integrates with your accounting software to give you an instant, two-way sync with your customer data. 

And with no-code custom fields and customization, you can build Method to your unique business needs.

Not to mention, Method’s opportunity reporting and dashboards are available on the web, so your sales reps can provide updates on potential deals even when they’re mobile at a conference or business trip.

You can use Method:CRM to:

  • Integrate with your emails and contacts to track customer data across other platforms.
  • Access detailed reports that are compiled automatically from past sales activity logging.
  • Monitor how each customer moves through various stages of the customer journey.
  • Work with data that reflects potential sales deals that may be linked to specific leads or accounts.
  • Track and communicate with any opportunity who needs regular follow-ups for progression.
  • View opportunity history and notes or set notifications and alerts.
  • Design customized sales processes for your unique business needs.

Overall, answering the question, “What is opportunity in CRM?” is a game changer for your business. By using the right tools and strategies, you: 

  • Simplify your sales processes. 
  • Boost business growth.
  • Stay ahead of the competition.

Frequently asked questions

How do you know that you need an opportunity management tool?

Many companies get by without the support of an opportunity management tool, but they could be doing better with one. They provide data that serves as a key metric in sales analytics for revenue forecasting.

You’ll especially benefit from using features included in opportunity management tools if your business is struggling with: 

  • Finding a customer’s probability of closure.
  • Growth of company size or operations.
  • Identifying opportunity size and value.
  • Sales pipeline management.

Do you need CRM for opportunity management?

You don’t need CRM for opportunity management, but it makes the process much more effective.

Identifying what is opportunity in CRM means using the platform for an overview of: 

  • Customer interactions.
  • Sales history.
  • Prospects. 

These tools make it easier to convert leads into sales and provide automation for manual data entry.

Because your customer information database requires regular updates for accuracy, CRM software can update this information for you automatically. So, you spend less time on manual data entry and more on value-added activities like collaborative deal management.

How should businesses manage sales opportunities?

Most of the time, your sales opportunity management involves the following steps: 

  • Identify unqualified and qualified leads.
  • Prioritize opportunities based on potential value.
  • Maintain regular communication with each person involved.
  • Leverage data analytics for informed decision-making.

CRM integrations with other modules give you linked contacts and accounts to pull customer data from emails, social media, and other platforms you use.

For example, your sales cycle might look something like this:

  1. Use CRM software that integrates with sales forecasts to generate and analyze a report that provides insights into customer needs and preferences.
  2. Collaborate with the sales and marketing team on a new marketing campaign based on the data you find.
  3. Identify new leads and put together a shortlist, which often results from successful marketing campaigns.
  4. Segment the opportunities from the leads based on click-through rate.
  5. Identify the top source or lead reference by how likely they are to spend money.
  6. 6. Your list of opportunities then can be assigned to specific team members to nurture.
  7. Upsell based on how the customer relates to specific products or services.
  8. Set up a win/loss analysis and expected close date for each opportunity.
  9. Close the sale. Remember that closing deals isn’t always the end of your customer journey.

Interested in making CRM a part of your business? Start your free trial of Method:CRM today!

Image credit: Anna Shvets via Pexels

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