Defintions for percentages in Opportunities

[MuppetMaster]

Does anyone know where I may find a whitepaper or document on what the probability percentages and sales stages represent in the Opportunity section of the SFA. I am looking for something that will give me the basis to get everyone in a sales team to speak the same language.

Ideas?

[george_bbch]

Hi MuppetMaster,

Good point! This topic would probably also fit into the Business Discussion forum. There are a lot of white papers on the web, like this one - do a search by yourself and let us know what you've found.

Without being a business consultant or even sales guy I can only imagine that you have to define the sales stages that are relevant for your business and in the beginning use the standard probability values in the system. By consequently applying this model to your opportunities and updating their stages, you'll be able to figure out the average duration of a sales cycle and based on the recorded dates of each change in the sales stage, you can then compute the average duration of each stage and finally update your system with more accurate probabilities.

A simple example that assumes that this probability grows in a linear fashion over time:
- the sales cycle has 4 stages: analysis, quotation, negotiation and finally close (won or lost)
- the average duration of the sales cycle is 100 days:
- on average, the analysis takes 20 days
- the quotation phase also lasts 20 days on average
- negotiation takes 40 days
- closing needs 20 days

So:
- the analysis has a probability of 20/100 or 20%
- the quotation's probability is 40% (you need 40 days out of 100 to move beyond that stage)
- negotiation is 80%
- and close is 100% if won or 0 if lost

Of course, there are more realistic (and complex) models out there...

Cheers,
George