1. Customer Relationship Management for Sales Implementation Guide
  2. Sales Methodology Setup

Sales Methodology Setup

When you set up a sales methodology, you define sales cycle steps for the methodology. A typical sales methodology might include these sales cycle steps:

  • Initial Call

  • Proposal

  • Demonstration

  • Quote

  • Won Business

  • Lost Business

For each step, you assign a sequence and a probability of closing the sale. The sequence is used to specify the order in which the steps should be completed. The probability of closing is used to calculate the amount of business the organization might expect to receive at that step in the sales cycle.

Typically, the first steps in a sales cycle have a lower probability of closing than the later steps. For example, the organization might find that it is able to win business during the initial call step 5 times out of every 100 calls. Therefore, you might assign a 5 percent probability to the Initial Call sales cycle step. Similarly, you might find that sales representatives are able to close eight out of 10 deals once the transaction reaches the Quote sales cycle step. Therefore, you might assign a probability of 80 percent to the Quote sales cycle step.

The percentages that you assign to these sales cycle steps are used to calculate pipeline amounts. The pipeline is used to determine how much potential business is currently in process. You can exclude sales cycle steps from the pipeline calculation if you choose. The system multiplies the potential revenue amount that is associated with the opportunity by the probability that is associated with the active sales cycle step. This amount is then entered into the pipeline in the bracket associated with the probability percentage.

For example, if an opportunity has a potential revenue amount of 100,000 USD, and the active sales cycle step on the opportunity is Quote, which has a probability of 30 percent, the system performs these actions:

  • The system calculates the pipeline amount as 100,000 USD * 30 percent = 30,000 USD.

  • The system enters 30,000 USD into the pipeline in the 30-39 percent bracket.

Each sales methodology should include:

  • At least one sales cycle step with a probability greater than zero.

  • One sales cycle step with a probability of 100.

    The probability must be 100 to convert a sales opportunity to a sales order.

  • One sales cycle step with a probability of zero.

    When you lose a sales opportunity, you assign the sales cycle step with zero probability to that opportunity. This removes from the pipeline the potential revenue that is associated with that opportunity.

You can also associate an action plan with each sales cycle step in a methodology. An action plan is a list of predefined tasks and activities that a sales representative should complete when they are in a particular step of the sales cycle. For example, the Proposal step might be associated with an action plan that includes these activities:

  • Input the data that you received during the initial call and generate a proposal document.

  • Send the proposal document, along with a thank you note, to the opportunity contact.

  • One week from the date you mail the proposal, place a follow-up call to the opportunity contact.

In addition to sales cycle steps and action plans, you can also associate sales drivers with a sales methodology. Sales drivers are the forces that play the greatest part in a potential customer's decisions to select your business. When you add a sales driver to a methodology, you can define the importance of that sales driver.

For example, you might find that the most important sales driver in a particular sales methodology is a client's budget. Therefore, you can set up a sales driver code, and assign it a high level of importance. You set up sales driver codes in UDC 90CB/CA. You set up sales driver importance codes in UDC 90CB/IM. You must set up these codes before you can assign sales drivers and importance codes to a sales methodology.