You know that feeling when you’re driving somewhere in a rush and you suddenly realise you’re on the wrong road? You took a wrong turn! You’re on a road going nowhere. Doesn’t matter how fast you’re going, you’re still going nowhere.
Now the question is, would you like to realize you’re on that wrong road after just 60 seconds of driving down it, or after 2 hours?
Lose early, not late – get off that road to nowhere fast
In sales, you should identify if an opportunity actually exists as quickly as possible. So you can get off that wrong road and go find the right one. We call this science Opportunity Management, and specifically the skill is referred to as ‘deal qualification’.
Road to nowhere – are you pursuing opportunities that aren’t going anywhere?
A strong system of qualification allows you to do this. Without a methodology to follow, letting go of opportunities that turn out to be illusions can be tough because it feels like losing. And when budgets are tight it can be tempting to chase anything that moves. But as we have mentioned before, early failure is better than late failure. And as Seth Godin puts it here, learning how to lose is a priceless skill.
With good qualification, you see there’s no opportunity quickly, and confidently eject faster than someone taking a ride in the passenger seat of James Bond’s Aston Martin.
Your 5-step system to knowing if an opportunity even exists
With TAS methodology qualification, you have GPS to stop you turning down those wrong roads in the first place. The first key question of the methodology is ‘is there an opportunity?’ Because there’s no point asking anything else before this. Here are 5 steps to answering this question.
- Understand the Customer’s Project and Problem
Opportunity Management always begins with the customer. Ask the customer to outline the business problem they’re trying to solve. Ask them open questions;
- What is the anticipated impact of this project on the organization?
- How does the project link to their overall business goals and strategy?
- How important is this project relative to other initiatives?
- Who are the key drivers behind the project?
The time you spend exploring and investigating with your customer now, will save you valuable time and start to reveal if an opportunity exists not.
- Understand the Customer’s Business
To discover if there really is an opportunity, you need to look at things from the customer’s viewpoint. Understand their business. Appreciate the context in which your customer is operating so you can work out the real importance of this initiative.
Develop a customer business profile by answering these questions;
- What is the customer’s core business and in which market segments do they operate?
- What are their key challenges and what’s the competitive landscape?
- What are the critical success factors for this project?
- How is this project connected to the customer’s business at a macro level?
If this project or opportunity is directly tied to one of the customer’s key business initiatives or to the corporate goals, there is a good likelihood that this project and opportunity is real.
- Find Out If They Have the Funds
There are no prizes for winning a deal with a customer who doesn’t have the funds. Establish the customer’s financial situation, starting with a basic financial review, checking;
- Revenue and profit trends
- Financial analysts reports or company commentary
- Financial outlook relative to their peers
- The key metrics they use to performance manage their business
If you know what financial metrics are important at a corporation level, then that usually filters down to executives, business units and departments, all the way down to the business initiative upon which your opportunity is dependent.
- Find Out If They Have Access to Those Funds
If a company is in a weak financial condition, then budgets are always at risk. However, even when companies have a very healthy Balance Sheet, or strong profits, there has to be a very good reason to invest on a given project. In financially strong companies, money is usually only allocated to a limited number of projects – and the criteria for funding are usually stringent.
If your project isn’t fully funded, then it’s time to move on to the next one. Ask;
- Is the budget fully allocated, authorized and protected?
If it’s not there’s clearly a problem.
- How was the budget determined?
If a competitor helped – you’re starting from behind.
- Is the budget adequate for the entire project?
Might the scope be reduced and your profitability threatened?
- Are additional funds available if required?
A positive answer here is a great sign.
- Are there other projects competing for the same budget?
If so, you need to stay close and help your sponsor build their case.
- Find Out If There Is a Compelling Event!
This fifth step is the most important one of all. A Compelling Event is what creates the motivation to act, and without one an opportunity is rarely real. A Compelling Event is not optional – it’s essential.
“A Compelling Event is a time sensitive response to an internal or external business pressure that drives the customer to act … to make a decision …. to solve a problem … to take advantage of an opportunity … by a defined date.”
All four previous questions allow you to answer this one. To uncover a Compelling Event you need to understand the customer’s business.
A Compelling Event might be project-driven. It could be the introduction of a new product. If the customer is a retailer it could be a spring sale or a holiday season. It might be driven by a budget cycle. Ask yourself these questions:
- Why must the customer take action?
- What is the deadline for the customer to make a decision?
- What are the consequences if this project is delayed?
- What is the payback for the customer if the project is completed on time?
- What will be the measurable impact on the customer’s business?
If you can identify a Compelling Event, then congratulations – you may have found a deal worth pursuing. If not, it might be time to get off that road!
One final point on identifying if an opportunity is real or just a mirage. These questions are not only for answering once. You should keep on going back to them and asking again and again throughout the full deal process.
More questions about Opportunity Management?