WEIGHING UP THE
VALUE OF A
BUSINESS OPPORTUNITY.

ALL BUSINESS OPPORTUNITIES AREN’T CREATED EQUAL.

Building your own “Standards of Value Matrix ” to assess the actual value of new revenue opportunities plays a critical role in using your business resources in the most effective way.  

Because Business opportunities are not all created equal.

it’s possible to waste valuable resources by focusing on ones that may look promisingly lucrative at face value but when you scratch the surface they simply don’t stack up.

What Are the Odds?

Do you know the odds? Is there a 90% or a 15% chance of winning the new business revenue you want?

Over the years, I’ve met a fair few sales teams, and business owners who consistently spending 60% of their time chasing the 15% chance of success AKA ‘closing the deal’. This is mainly because that’s who will talk to them or have responded to their marketing. They rely on  “hope and skill” that they will be able to change these percentages and outcomes in their favour… and close the deal.

Know the Consequences.

Don’t get me wrong, yes, you can win this ‘low chance business’ on occasions, but at what cost? What is the cost of the resources you are chewing up, in terms of money, time or human resources input, and can this be considered predictable income?

Sales teams are typically asked to predict the likelihood of a deal or an opportunity’s success as part of reaching KPI’s and sales targets, yet they often aren’t given clear criteria on what the % ‘s should represent against a particular opportunity. In other words, that all opportunities are not equal.

So, how do you work out if someone is a 15% or 90% chance of a successful outcome? How do you determine how best to focus your efforts to reach the best possible outcomes, in a timely, resource-efficient manner?

Every Business Is Unique.

To date, I haven’t found just one rule that covers all businesses, as every business is unique.

And this is true even if two businesses have an identical service at an identical price. What the business wants to achieve, how they view relationships, and how they deliver the service will differ and these business-specific goals and values play an important role in the assessment of opportunities.

Based on my experience, I believe the answer lies in establishing a simple matrix (this is your chance to play with a whiteboard) to assess what your sales goals and criteria are against a particular service area in your business.

Multiple Matrix Are Better Than One.

If you have multiple service offerings, I suggest setting up a matrix tab for each individual service area rather than just one to cover the whole of the company sales goals. 

Why? In simple terms, you could have a long play service that has a 12 month lead time, and separately a short term/cycle service that provides the “bread and butter” revenue for your day to day business costs AKA it pays your bills now. The way you weigh up the value of these two and who is a 90% or 15% is often quite different, as each scenario has different complexities and each will require different information inputs.

What to Weigh Up.

Some of the areas you can put a weighting or scale against in your matrix include

❓ How far is the potential client into the buying cycle/process when you first got involved? (e.g scale 1-5 ) (1= late = low score low value) or ( 5 = Early = 5 high score high value) 

❓ Have they purchased from you or a competitor before? (qualifying need, yes = 5 high value)

Has the client expressed a real and urgent need for an outcome you can deliver

❓ Do you honestly know your service will provide real benefit to this client? (1 = not sure, 5 = Absolutely ) 

❓ Are you already talking to the right people, the decision-makers or do you need to also find someone else?

❓Do you know/understand their procurement process and timing? (e.g yes/no, 50% of)

❓Did you approach them or did they approach you?

❓ Is this potential client a strong gateway to other opportunities

❓Does this potential client meet our “client lifetime $ value goals”)

Designing the matrix in such a way so that each point can be individually assessed and the final ‘score’ of each added up to an overall score that is represented as a scale or even a ‘% of success likelihood’ is ideal.

I recommend breaking it into a few different segments and ways of viewing the outcomes for a balanced approach.

This example is for illustration purposes as each business, sales methodology, service or product offering may have different criteria to work through to come to the right conclusion.

To download a PDF of this document CLICK HERE

Depending on your business and your service offerings, There are many more questions that can be asked depending on what is important to you and your business.

Working through a matrix should only take a couple of minutes per opportunity once you have set up the base model to ask questions and measure against.

Note; areas like price can come into it but my preference is to make that round two, once you know you actually have an understanding of the client’s needs and how they buy and if you have a high % of having a fair evaluation of your service.

You Need To Be Close To It To Win It.

A second and deliberate benefit from utilising this system is that if you or your team don’t know the answers to these questions asked in the matrix, it may be that you or your team simply are not close enough to the opportunity to win it. 

In which case, you need to ask more questions, do more research and find out more information to determine if the opportunity is worth it for your business.

Focusing Resources In The Right Place.

Having the matrix built and in use helps to provide a level of clarity and due diligence across your sales process and ensures the sales-focused parts of the business invest their time in the right direction. 

I have used this system many times across my own sales teams, my own sales and my clients where it’s been implemented successfully into their business. It is an invaluable tool to have as part of your sales process regardless of the type or size of your business. 

 

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