Sales Process Manager automatically calculates the opportunity's closure probability. This topic explains how this is calculated.
Calculation of closure probability
The closure probability is given by this formula:
Closure Probability = (Sum of Current Qualifier Scores) ÷ (Sum of Maximum Possible Qualifier Scores)
Each of the qualifying question ('qualifier') scores that make up the sum of scores is calculated as follows:
Qualifier Score = Qualifier Importance X Qualifier State
-
Qualifier Importance
-
'Nice to have' = 1
-
'Important' = 2
-
'Very Important' = 3
-
'Essential' = 4
-
Qualifier State
Each qualifier is assigned an Importance level in the sales process. Each level of importance has an associated score:
The importance of a qualifier can be configured by your administrator and is not indicated to users who are completing the questions.
Each possible qualifier state has an associated score:
'No' = 0
'In Progress' = 1
'Yes' = 2
Note: An opportunity with all qualifiers in the green state (maximum possible score) is effectively a Closed Won deal. It has a Measure of Progress of 100% (because the deal has already been won).
Example of closure probability calculation
Suppose that a very simple sales process has three stages: 'Target Selected', 'Evidence' and 'Verbal Order'. The following three tables show the qualifiers (and their level of importance) assigned to each stage:
|
'Target Selected' Stage |
Importance |
|---|---|
|
Does the customer understand our Products & Services |
3 |
|
Have we identified the Buying Roles |
4 |
|
Has the customer committed resource to the buying project ? |
4 |
|
'Evidence' Stage |
Importance |
|---|---|
|
Do you have Inside Support? |
2 |
|
Have you formally presented our Solution? |
4 |
|
'Verbal Order' Stage |
Importance |
|---|---|
|
Have we secured a Signed Agreement? |
4 |
|
Have we secured an Purchase Order? |
2 |
First, let's calculate the Sum of the Maximum Possible Qualifier Scores.
|
Qualifier |
Qualifier Importance X Green state |
Score |
|---|---|---|
|
Does the customer understand our Products & Services |
3 x 2 |
6 |
|
Have we identified the Buying Roles |
4 x 2 |
8 |
|
Has the customer committed resource to the buying project? |
4 x 2 |
8 |
| Total 'Target Selected' Stage Score | 22 | |
|
Do you have Inside Support? |
2 x 2 |
4 |
|
Have you formally presented our Solution? |
4 x 2 |
8 |
|
Total 'Evidence' Stage Score |
12 | |
|
Have we secured a Signed Agreement? |
4 x 2 |
8 |
|
Have we secured an Purchase Order? |
2 x 2 |
4 |
|
Total 'Verbal Order' Stage Score |
|
12 |
| Sum of Maximum Qualifier Scores | 22+12+12 | 46 |
Now let's calculate the Sum of the Current Qualifier Scores based on a set of qualifier responses that have been selected for the opportunity by a user.
|
Qualifier |
State Icon |
State |
Importance |
Score |
|---|---|---|---|---|
|
Does the customer understand our Products & Services |
|
1 |
3 |
(1 x 3) = 3 |
|
Have we identified the Buying Roles |
|
2 |
4 |
(2 x 4) = 8 |
|
Has the customer committed resource to the buying project? |
|
2 |
4 |
(2 x 4) = 8 |
| Total 'Target Selected' Score | 19 | |||
|
Do you have Inside Support? |
|
1 |
2 |
(1 x 2) = 2 |
|
Have you formally presented our Solution? |
|
2 |
4 |
(2 x 4) = 8 |
| Total 'Evidence' Score | 10 | |||
|
Have we secured a Signed Agreement? |
|
0 |
4 |
(0 x 4) = 0 |
|
Have we secured a Purchase Order? |
|
0 |
2 |
(0 x 2) = 0 |
|
Total 'Verbal Order' Score |
|
0 |
0 |
0 |
| Sum of Current Qualifier Scores | 19 + 10 + 0 | 29 |
With the above data (the total possible score and the current recorded score), Altify calculates the closure probability as follows:
Closure Probability = (Sum of Current Qualifier Scores) ÷ (Sum of Maximum Possible Qualifier Scores) = 29/46
This means that the opportunity in the given example has a closure probability of 0.63, or 63%.