Every sales organization wants to keep track of the value of every opportunity that their team is working on or that they have closed-won, and with good reason. Opp values identify how much your each of these opportunities that your reps are working on or closing are worth, the sum of which determines your company’s total revenues.
Yet, for such a seemingly-simple process, there are actually several complex nuances regarding the logging of opportunity values in Salesforce.com. Sales managers can dictate what type of process and what level of complexity they want their sales reps to log opportunity values, depending on what type of information they’re looking for in their Salesforce reports. Choosing the right one that works best for you and your company can allow you to maximize the data available at your fingertips.
Here are three different ways to build out opp values in Salesforce.com, ranging from the simplest to the most complex.
Method #1
The first method is exceedingly simple, allowing sales managers to reliably count on sales reps to accurately enter this information. All reps have to do with each opportunity that they are working on is to fill in the dollar amount of what the opportunity is valued at, as well as the close date. Some sales organizations also feature two additional sub-fields that contribute to the overall opportunity value, depending on how their product is structured. For example, some companies have pricing plans that include the product or software cost, as well as a consulting or implementation cost. If that’s the case, make sure your reps are entering both those individual values in their respective fields, ensuring that the two costs add up to the overall value of the opportunity. In this example, the consulting cost is $2,000 out of the overall opportunity value of $10,000, which means that the software costs $8,000.
The primary advantage of this method of entering opportunity values in Salesforce.com is that it’s simple to get rep buy-in, which is half the battle regarding the logging and tracking of Salesforce.com data in the first place. With this information accurately collected, sales managers will be able to track over time what their winning deals are worth, how much is in your opportunity pipeline and the bookings trend over time, giving them a better overview of how prosperous the sales organization is.
Method #2
The second method of building out opp values in Salesforce.com builds on the first method but adds a couple of new fields. This method requires reps to enter the start date of the contract and an end date, or the entire duration of the contract. Working in conjunction with the information from the first method, sales managers can use this second method of building out opportunity values to gain additional insights on their opportunity pipeline that allow them to better plan their business processes.
The benefits of this method is that it allows sales managers to model their revenue over time, something that cannot be done with the first method. Such a linear pricing model collects important data over time, providing sales managers with ever more insight into their scheduled revenue collection. Managers can use this information to determine how much revenue they will have in the near future. Will they be cash poor or extremely liquid a year from now? The information on opportunity values collected here can help answer that question.
Method #3
Finally, the third and most complex method of building out opportunity values in Salesforce.com – line item schedules – is best-suited for companies that deal with irregular payment plans, such as balloon payment upfronts, quarterly payments or some other unique schedule. Collecting upfront payments is the ideal scenario for most sales organizations – unfortunately, the reality of the situation is that many customers will inevitably schedule erratic payments, making it ever more critical that sales reps are properly logging that opportunity value information in Salesforce.com. Sales reps have to not only log the total value of that opportunity but also schedule out those payments by the quarter, month, week or even day, depending on what both parties have agreed on as the best schedule of payment.
The problem with this method is that it asks a lot of your reps. Joey Sales Rep, who already hates data entry, loves the first method, where he only had to fill in two simple fields. The second method added several more fields, while this final method adds a whole new level of complexity altogether. Getting that full rep buy-in and cooperation might be a tough sell.
However, this method also allows sales managers to accurately forecast their revenue, not just for the entire year but for more specific segments of time, such as by quarter or month. Managers can track when payments are actually coming into the company, giving them a much better sense of the company’s revenue growth and trajectory.
These three different methods for building out opportunity values in Salesforce.com all have their pros and cons. An early-stage company with a simple sales process might be satisfied with the information provided in the first method. As the company grows and things become more complex, they might require the more meaningful and deeper information provided by the second or the third method.
Which method of building out opportunity values in Salesforce.com does your company employ? How is it working out for you? Do share your thoughts in the comments section below.
