Schedule Revenue Over Time In Salesforce
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Not every sale results in a single, one-off invoice and payment.
Often, they result in multiple orders and payments over time.
However, here are two common mistakes companies make in Salesforce:
- They do use repeat opportunities when they shouldn’t, and sometimes
- They don’t use repeat opportunities when they should.
- Your sales process is more complex than necessary.
- It’s challenging to get accurate pipeline visibility.
- Sales metrics on the size, quality and trend in the sales pipeline become distorted.
So, here are five examples in which you may think repeat opportunities have a role to play in Salesforce.
- Software as a service.
- Insurance premiums.
- Service contracts.
- Framework or umbrella agreements.
- Proof of concept deals and free trials.
In each of these commonly occurring scenarios, companies receive multiple payments over time. So, are repeat opportunities the best way to handle each situation?
Here’s a simple way to answer this question:
Decide whether future revenue is in jeopardy.
If the answer is yes, then repeat opportunities are probably required.
However, if the answer is no, then you probably don’t need repeat opportunities.
Here’s how repeat opportunities apply – or don’t apply – to each of the situations above.
Repeat opportunities with software as a service
Based in Paris, Sidetrade provides predictive software to accelerate credit management and the sales-to-cash cycle.
Sidetrade delivers its platform on a SaaS basis. Customers sign-up for a fixed-term contract for several years. Payment is on an annual basis.
Sidetrade doesn’t need recurring or repeat opportunities each year.
Repeat opportunities are not required because the future revenue on the existing contract is not in jeopardy. The opportunity is not in doubt. That’s because the signed customer contract is already in place.
Therefore, instead of repeat opportunities, Sidetrade forecasts future revenue using Revenue Schedules.
For sure, Sidetrade will aim to sell additional services or upgrades to the customer.
However, Sidetrade handles this using additional opportunities. These are new opportunities for incremental revenue rather than repeat opportunities.
Repeat opportunities with insurance premiums
Based near Toronto, Aboriginal Insurance Services (AIS) sells insurance products to the Indigenous Native American communities across Canada.
For example, the community will purchase motor insurance to cover all vehicles operated by the municipal area.
The insurance and premium is always for one year of cover.
AIS will aim to renew the policy with the community. However, there’s no guarantee of this renewal.
Future revenue is in considerable jeopardy. Each year, competitors will seek to undercut AIS or offer more product benefits.
Therefore, it’s right for AIS to create a repeat opportunity to manage the renewal. It is a separate sales process. AIS will apply crucial, proactive key account planning to optimize the chances of success.
There is, however, no certainty of a positive outcome.
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Repeat opportunities with service contracts
Based in Yorkshire in northern England, MAM Software sells advanced software and hardware to support the automotive logistical supply chain in the UK and the USA.
The company provides support contracts that cover the software and hardware. These typically run for 3 – 5 years.
The customer pays an annual fee for support.
However, MAM doesn’t use repeat opportunities.
That’s because the customer is committed contractually for the duration of the support arrangement. The revenue is secured. It’s not in jeopardy.
Instead, MAM has a single opportunity. Products with Schedules forecast future revenue. These schedules mean MAM has an accurate, forward-looking view of secured income.
Repeat opportunities with Proof of Concepts
Another London based customer, Modernis, provides advanced analytics and consultancy services to the insurance and reinsurance markets across the UK, USA and Europe.
Modernis offers the analytics products in a software-as-a-service platform.
However, the sales process often involves two distinct stages.
First, Modernis provides chargeable proof-of-concept access to its platform. Later, once customers have experienced the value that the platform brings, Modernis sells a contract that runs for several years. This contract incorporates an annual license charge.
To manage this, Modernis create two opportunities.
The first opportunity represents the sales process for a chargeable proof-of-concept.
A second opportunity is automatically created. This represents the sales process for the full contract.
So the company uses repeat opportunities – at least of a type. The repeat opportunity is used because commitment to the full contract is not a given.
Instead, it depends on a successful outcome to the proof of concept.
Modernis also forecast the future revenue on the full contract using Schedules. This is because once the contract is signed, the revenue is not in jeopardy. Therefore, a repeat opportunity is not required.
Framework agreements in Salesforce
Gilbarco Veeder Root (GVR) is one of the world’s leading manufacturers of petrol pumps and retail equipment. Based in Greensboro, North Carolina, the company has a Salesforce deployment covering six continents.
A GVR opportunity often relates to a large site re-fit program for one of the major petrol retail companies.
The refit program may take the retail petrol company several years to complete. It’s likely to require a significant purchase from GVR.
One the one hand, a long-term contract benefits both parties.
On the other hand, the customer doesn’t want the delivery of all the petrol pumps manufactured and delivered in one go!
Rather, they need to ‘drawdown’ the units as-and-when the refit program is ready to install them.
So the total value of the contract is agreed upon. However, the month-on-month revenue is variable.
GVR handles this with a single upfront opportunity.
The company uses custom revenue schedules to predict the volume and revenue that is anticipated each month. The GVR Account Manager updates the schedules each month with the actual orders.
This allows GVR to track the projected volume (upon which the commercial terms were agreed) with the actual volume ordered by the oil company.
Recommended blog post: How To Manage 4 Types of Framework Agreement In Salesforce.
Implementation points to consider with repeat opportunities:
- Consider triggering the repeat opportunity automatically. This avoids the subsequent opportunity being forgotten about. That trigger happens when the first opportunity is won or at some other predetermined point in the process.
- Measure the win-loss ratio for the repeat opportunity separately to the initial opportunity.
- Consider using Products and Schedules to forecast the revenue over time. Read this blog post for more advice on how to do this.
- Consider custom revenue schedules if you need additional flexibility. For example, if you need to record the status (not due, invoiced, paid) on individual schedules, then you will need custom revenue schedules.
Not every sale results in a single payment or transaction. However, only use repeat opportunities when it is right to do so. And if it isn’t right, then try revenue schedules instead.
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