Opportunities
Sales Opportunities (Opportunities) are a central object in the Microsoft CRM Sales functionality. Opportunities represent potential revenue-generating events. For example, in the case of a software company, an Opportunity will typically represent the possible sale of a particular product or mix of products and services. Normally, you will associate a total revenue potential amount, a projected close date, and a probability of closure. The word close in both cases refers to the successful completion of the transaction. The combination of this information creates what is known as the forecast for the opportunity. For example, an Opportunity with potential revenue of $100,000 and a 50% close probability has a $50,000 forecast value. The close date tells us when that $50,000 is likely to materialize. In a financial services environment, an Opportunity record might be used to track the ongoing relationship between a broker and his/her client. There might never be a single revenue number that is being pursued; rather the ongoing relationship development causes the client to steadily purchase the services being offered. In this type of scenario, revenue might be projected based on history and trends as opposed to specific, current deals in the pipeline.
Sales Opportunities that are in progress represent the organization's pipeline. Many of the Microsoft CRM reports are named with the term pipeline, whereas others simply have the word opportunity in the name. Reports with the word pipeline in the name will display only active opportunities. Reports that generically refer to opportunities take all opportunities, open and closed, into account.
After a company really starts to track its sales process, a lot of meaningful data can be gleaned. For example, if your company implements a sales methodology for all products or a particular product line, after some historical information is built, you can track metrics about the steps or stages of the sales methodology. Some of these metrics might be
Average probability of close based on stage in the sales cycle
Average sales cycle length
Average length of time per sales cycle stage
Overall win/loss ratio
Average number of Activities (calls, meetings) per opportunity
Used correctly, this can be valuable information. For example, consider that you've studied your sales process and have determined that opportunities in the Needs Assessment stage historically have a 10 percent chance of being won. If you also determine that the average Opportunity in the Needs Assessment stage takes three months to close and there is currently $1,000,000 in that stage, you can likely expect $100,000 in three months.
Similarly, imagine that you have a five stage sales methodology including Lead Conversion, Needs Assessment, Solution Definition, Proposal, and Solution Implementation, and you discover that historically Opportunities in the Needs Assessment stage have a 5 percent chance of closure, whereas Opportunities in the Solution Definition stage have a 40 percent chance of closure. The way your process is set up, your junior sales representatives handle the opportunity through the qualification stage, and then passes it to the more senior sales representatives. Based on this, you could surmise that a lot of qualification is happening in Needs Assessment, with a lot of unqualified Opportunities actually being weeded out before making their way to Solution Definition. This analysis leads to the conclusion that the junior sales representatives are not doing a very good job qualifying the opportunities, so the senior representatives are, effectively, repeating the qualification process.
Now, notice that our example four-stage sales process does not include a Qualification stage. This is because the Qualification stage should occur while the record is still a Lead. Leads cannot have attached Sales Opportunities. Only Contacts and Accounts can have attached Sales Opportunities. However, you might have Opportunities that are created on existing Contacts and Accounts where you need a Qualification stage. Not to worry, Microsoft CRM can support as many different sales processes as you need. We'll get to more of that in Chapter 12, “Workflow.” We could go on for days about this sort of thing, but let's get into the specifics of Sales Opportunities. Figure 7.5 shows the Microsoft CRM Sales Opportunity screen.
Figure 7.5. The Sales Opportunity screen.
Setting up a Sales Opportunity
The first decision in setting up a Sales Opportunity record is which CRM record will act as the Opportunity's parent record. Sales Opportunity records can have a single parent object, which will either be a Contact (in a B2C business model) or Account (in a B2B business model) record. Table 7.1 goes into detail about the attributes that make up the Sales Opportunity record.
| Field | Description |
|---|---|
| General | |
| Topic | Topic is the one-line overview of the Opportunity. Because this value alone is referenced from many places in the application, you will want to get in the habit of including the customer's name at the beginning of the topic. For example, if you enter “big opportunity” as the topic of an Opportunity, that is literally all you will see when you are doing a lookup of Opportunities from a related screen. Figure 7.6 illustrates this point. |
| Potential Customer | This field links to the Contact or Account for this Opportunity. |
| Price List | This is the price list from which Products are added to the Opportunity and its related Quotes, Orders, and Invoices get their prices. If you create the Opportunity directly from a Contact or Account record, the Price List on that record (if there is one) will pull over automatically. If you want the system to automatically generate the Opportunity's revenue potential from the Products you have added, you must have a Price List. |
| Estimated Revenue | |
| Revenue | Revenue is a radio button where you must specify whether you want the system to calculate the Opportunity's revenue potential based on the value of the associated Products or if you simply want to enter in a Revenue amount. Your selection here affects the Est. Revenue field. |
| Est. Revenue ($) | Estimated revenue for the Opportunity. This is either based on the Products entered on the Products tab or by an amount that you manually enter. |
| Probability | The probability that the Opportunity will be won. This probability can be automatically set by the sales process. The probability can increase to pre determined values per stage in the process. |
| Est. Close Date | The date you believe the opportunity will be won. |
| Rating | This field can be used to provide a little extra information on how the sales rep or his/her manager feels about the Opportunity's chances of success or its importance. |
| General Description | Description is a short overview of the Opportunity. |
| Administration | |
| Owner | The User who is responsible for the Opportunity. |
| Originating Lead | A link to the Lead from which the Opportunity was converted. Because Leads have a field called Lead Source, by linking the originating Lead to the Opportunity the possibility exists to analyze successful opportunities by Lead Source. |
| Status Reason | By default the Status Reason field lists two values: In Progress and On Hold. This can be helpful in placing an opportunity off to the side if unexpected delays arise. |
Figure 7.6. The Opportunity lookup screen.
After you have completed the Opportunity attributes outlined in Table 7.1, you can add the various associated records as necessary. The other tabs on the Opportunity record are for other associated records. Figure 7.7 illustrates how Opportunity records link to other records in CRM. The following record types can be associated with Opportunity records:
Products
(Other) Contacts
Quotes
Orders
Invoices
Competitors
Activities
Notes
Figure 7.7. The relationships between Sales objects.
Let's discuss each of these associated records and their relationships to the Opportunity record.