Chapter 6: An Introduction to Sales

CHAPTER 6: AN INTRODUCTION TO SALES

Objectives
The objectives are: Know the fundamental elements of the sales process. Know when to use leads to qualify or disqualify opportunities. Know when to use opportunities. Understand sales order processing and know when to use quotes, orders, and invoices. Know when to use the Product Catalog. Know when and how to use the Competitors area. Know when and how to use the Sales Literature area.

Introduction
This lesson covers the basic sales process and how sales processes vary between organizations. It describes and provides guidance for making decisions about which areas of Sales to use and how to use them. It discusses some key elements to consider when deploying Microsoft Dynamics CRM, including the need to meet stakeholder goals and find a balance between meeting those goals and the goals of constituent user groups. It also provides details about general features of the sales system that are not covered in future lessons.

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Introducing Sales Management

Sales is the heart of Microsoft Dynamics CRM. If an organization uses no other area of Microsoft Dynamics CRM, it uses the Sales area. For that reason, the Sales folder in the Navigation Pane provides access to all core Microsoft Dynamics CRM functions. For sales managers and other company management, CRM provides insight into the sales pipeline, including the ability to track types of opportunities, close ratios, revenue forecasts, and other important sales information. This data is available at an individual and departmental level so that performance can be measured throughout the organization. However, as discussed in Lesson 4, the data available to these managers is only as good as what is entered by the workforce. Microsoft Dynamics CRM sales management provides tools for helping salespeople manage their own pipeline. These include integration with Microsoft Outlook, e-mail, activity tracking, and reminder and task management features. At the heart of sales management is the opportunity. An opportunity is used to track a deal as it moves through the sales process. Opportunities represent the sales pipeline for the organization. For organizations that want to track more detail about how opportunities are created, the leads entity can be used. Leads contain information about potential deals and customers. Leads can be used to help track ways the organization establishes new relationships. Sales can be tracked at the opportunity level to provide high-level data around the pipeline, but for organizations that want specific data around amounts and blends of the products and services being sold, CRM provides a Product Catalog. This feature can be extended using the sales order processing features to track the quoting, ordering and invoicing processes. Sales order processing features are also easily integrated with fulfillment and accounting systems.

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The elements described above are all tied together through a sales process. CRM can support many different sales processes. A typical sales process looks like this:

FIGURE 6-1 TYPICAL SALES PROCESS

Microsoft Dynamics CRM supports the sales process through these key modules: Accounts: Allows you to manage accounts, which are organizations that the organization might do business with. Contacts: Allows you to manage contacts: a person representing a customer or potential customer, or an individual related to an account, such as a supplier. Leads: Allows you to manage possible customers who must be qualified or disqualified as sales opportunities. If a lead is qualified, it can be converted to an opportunity, account, and/or contact. Opportunities: Allows you to manage opportunities, which are potential sales to an account or contact. Opportunities represent potential revenue from an account or a contact. Competitors: Allows you to manage competitors, which are entities that might compete with your organization for sales opportunities. Competitor records can be linked to opportunity, product, and sales literature records, so they are available when competing for a sale. Sales Literature: Allows you to manage sales literature, the documents that are created and given to customers to help increase sales.

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Products: Allows you to manage products, the items, or services that the organizations sells or provides. Products can be linked to other records, such as quotes, campaigns, and cases. Quotes: Allows you to manage quotes, which are the formal offers for products or services, proposed at specific prices and the related payment terms. Quotes can be sent to an opportunity, account, or contact. Orders: Allows you to manage orders, which are confirmed requests for the delivery of goods or services based on specified terms. An order is a quote accepted by a customer. Invoices: Allows you to manage invoices, which are orders that have been billed. Invoices record a sale to a customer, including details about the products or services purchased.

Not all of these modules are required. Every organization is different and will need to decide which modules to use and how to use them. This chapter provides an overview of the sales modules and how they work together, as well as information to help you decide which modules and features to use and how to use them.

Managing Leads
Leads represent lists of potential customers and deals that have not been qualified. A large percentage of leads never materialize into customers. Thus, the goal of the sales organization is to qualify leads that have the potential to turn into a sale, so that sales representatives can focus on the opportunities that have higher chances of success. Deciding Whether to Use Leads Not all organizations use leads. Some organizations deal with opportunities; that is, qualified prospective sales. These organizations may not implement the leads portion of Microsoft Dynamics CRM. Organizations that depend on mass demand generation processes - such as advertisement, road shows, cold calling prospect lists, and so on-will likely use leads. Businesses that have demand generation methods or those that engage in mass marketing campaigns may benefit from lead management because this process helps sift through the data and helps sales focus their efforts in the best direction. To decide whether to use the leads area, consider these questions: Does the organization invest substantial time and money in generating lists of possible customers? For example, does the organization do mass mailings, cold calling, and so on? Does the organization keep lists of people who are the correct demographic, but for which it has limited information (such as limited contact information)?

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Does the organization have a process or teams dedicated to sifting through these possible customers and contacting them or otherwise filtering them to identify good prospects? Does the organization need to manage lists of potential customers that should not be mixed in with the Accounts and Contact lists?

If the answer is yes to these questions, the organization may want to use leads. Even if the organization does not have large lead generation initiatives, ask if management wants to track the effort that sales spends tracking and working with prospects. If so, consider using Microsoft Dynamics CRM's lead management features.

Managing Opportunities
In Microsoft Dynamics CRM, qualified leads, such as those that have estimated revenue associated with them, become opportunities. When the prospect or customer expresses qualified interest in buying the business products or services, they are considered an opportunity. This is a key part of the sales process because this is where the sales team spends most of its time and effort. The process of working on an opportunity may include several customer interactions. How well the sales team manages this stage can mean the difference between a win and a loss. BEST PRACTICE: Every organization considers qualified prospects differently. The difference between a lead and a customer/opportunity pair should be studied in planning an implementation. Often, there is a sensible line in the sales process, such as handing off contact information from marketing to sales, that is clearly a qualification process. Many sales organizations start their process from the opportunity stage rather than the lead stage. Sales people spend the majority of their time working on the opportunity and use Microsoft Dynamics CRM to track customer communications and tasks relevant to converting the opportunity to a sale. Almost all sales processes use opportunities to track potential revenue and do sales forecasts.

Opportunities and Other Areas

The Opportunity area integrates with the Products and Competitors areas if they are used. If the organization creates a product catalog with price lists, users can associate products with opportunities. If the organization uses orders, the opportunities can generate orders or proposals. Likewise, users can associate competitors with opportunities to show the competition for a sale. Users can view sales literature by directly searching the literature list or view it while working on an opportunity, through the products or competitors associated with the opportunity.

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Processing Sales Orders

Quotes, orders, and invoices are all potential components of an organization's sales processing. Although Microsoft Dynamics CRM is designed so that the sales processing flows from quote to order to invoice, an order can be created without a quote and an invoice can be created without an order. Thus, CRM provides flexibility to accommodate a variety of sales processing methods.

Managing Quotes
Quotes are used when a sale representative must inform potential customers about the products and prices associated with the opportunity. Often, the quote goes with a proposal. Customers receive the quote and evaluate it against their budget and needs. If it is a match, then the customer comes back with an acceptance and places an order for the product or service based on the terms in the quote. Otherwise, there are further negotiations until you reach acceptable terms. Quotes only work if the organization has price lists. Price lists can be set up through Microsoft Dynamics CRM's product catalog or they might be stored in another internal system, such as an Enterprise Resource Planning (ERP) system. Quotes can be the integration points between the two solutions. For example, the Microsoft Dynamics CRM quote might pick up the customer information from Microsoft Dynamics CRM and pick up the product and pricing information from the other system. Quotes provide customers with the terms of sale, so it is important to capture price and product or service information in quotes. In some cases, an organization may need to capture special information such as a tracking number, which must be added to Microsoft Dynamics CRM as a custom field. Or, integration with another system may require custom fields. You can add additional fields or customize many existing ones to meet these needs.

Managing Orders
When customers confirm requests for the product or service, an order is placed. Organizations receive and process orders that covert to invoices and revenue. Microsoft Dynamics CRM offers functionality to record customer orders. Orders can be created from quotes that have been accepted. Thus, they can be related back to the opportunities that resulted in them. After the order is placed it needs to be fulfilled. Organizations often have a fulfillment system in place that Microsoft Dynamics CRM needs to integrate with. Alternatively, the user can enter fulfillment status in Microsoft Dynamics CRM to track it in the system. Information about an order should include the shipping and billing contact information as well as the price and product or services ordered. Beyond this, the business may have a set of details they want to include, such as discount or promotion codes. These can be added as custom fields to the order record type.

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Microsoft Dynamics CRM has two kinds of pricing behavior on orders and invoices: Use Current Pricing Prices Locked

When you use current pricing, the price is directly associated with the price per unit for the product as it appears in the product catalog. Therefore, if a price is changed for a product in the product catalog, the unit price changes in all open invoices, as well as both draft and active orders that include that product. This may not be the behavior you want with existing orders or invoices that have been presented to the customer. In this case, use the Prices Locked method. When you lock prices, the price per unit for a product in an open order or invoice is locked. Even if the product price changes in the product catalog, the open order or invoice that has locked prices enabled remain at the original price.

Managing Invoices
Invoices are requests for payment from a business to its customers. Invoices are related to orders. Depending on the payment terms, an invoice may be generated from an order after it is fulfilled or when it is placed. Microsoft Dynamics CRM allows users to generate invoices from the system. In many organizations, a separate financial system tracks the invoice payment. In those cases, if the solution's Invoice area is used, it is important to effectively integrate the two systems to keep the data synchronized. Invoices should contain information from the order, such as the billing and shipping address and payment terms. Organizations with specific needs can add custom fields to the invoice, such as loyalty program numbers, and so on. Businesses may decide to add an approval process to the invoice and use workflows to support it.

Managing Products and Pricing

Microsoft Dynamics CRM offers businesses the choice of maintaining and managing their product and pricing information in the solution. This information helps the sales team reconcile product and price information during a sales process and allows for automated creation of quotes and orders. In non-service organizations, products and inventory are closely linked. Many organizations have internal systems to handle inventory management. In that case, the product details, pricing, and stock information must be passed to Microsoft Dynamics CRM, so it will be necessary to integrate the two systems. Sales literature can be associated with products. If the Product Catalog area and the Sales Literature areas are used, sale representatives can view the available literature for products when working on opportunities.

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Keeping Track of Competitors

Microsoft Dynamics CRM includes a competitor feature that enables an organization to compile information about its competitors. This information provides the organization's sales staff with a powerful tool they can use to compete effectively, close on more sales opportunities, and strengthen customer relationships. The competitor information management feature allows orgaonizations to: Compile a repository of product literature, pricing structures, and product reviews for each competitor. Track the products that competitors sell and compete with your products. Add products or sales literature to help compete with the threat, such as battle cards or information on how to win against the competitor. Track competitors by creating relationships between competitors and opportunities. Track sales lost to competitors by specifying the competitor you lost to when a sale is lost. The organization can use this information to assess the opportunities lost to or won against each competitor.

Tracking competitors can be a key aspect of the sales process. The more information a team has about a competitor's strengths, weaknesses, opportunities, and the threats a competitor presents, the more likely it is to win sales against that company. Sales literature can be associated with competitors. If Competitors and Sales Literature are used, sale representatives can view the literature available to compete with other organizations, while working on an opportunity.

Procedure: Create a Competitor

1. In the Navigation Pane, click Sales, and then click Competitors. 2. On the Actions toolbar, click New. 3. On the General tab, enter information or observe any noted restrictions or requirements as needed: Name: The name of the competitor. Ticker Symbol: If you enter a ticker symbol for a market outside the United States, you must prefix it with the country code, for example, US:MSFT (country code:ticker symbol). This information is available only for markets that are currently listed on the MSN Money Web site. In addition to the United States (US), MSN Money also provides information for markets in Australia (AU), Belgium (BE), Canada (CA), France (FR), Germany (DE), Great Britain (GB), Italy (IT), Japan (JP), Netherlands (NL), Spain (ES), and Sweden (SE).

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Key Product: Enter the competitor's product that you most frequently compete with for sales. Web Site: The competitor's web site address. Reported Revenue

4. Address Section: Fill out the competitors address information. Click the Analysis tab and fill in the following fields with the relevant competitor's information: Overview Strength Weakness Opportunity Threat

5. Click Save and Close.

Adding Products to Competitors

Knowing the products competitors carry helps to identify areas within your own product line where you can expect the greatest challenges to making a sale. If you list the products competitors carry, then you can create a scorecard that helps the sales organization present data to potential customers about how your products provide benefits that your competitors cannot meet. Procedure: Add a product to a competitor 1. In the Navigation Pane, click Sales, and then click Competitors. 2. Select a competitor from the list, on the Actions toolbar select More Actions, and then select Edit. 3. Under Details in the left navigation, click Products. 4. On the Actions toolbar, click Add Existing Product. 5. Type part of the product name, and then click the Lookup icon. 6. Under Available records, select the product, click the >> arrow button to move the product to Selected records, and then click OK. 7. Click Save and Close.

Managing Sales Literature

The Microsoft Dynamics CRM Sales Literature system is a central repository for an organization's sales information. It provides your sales team with access to sales literature, product brochures, articles, discount, and pricing structures, and so on. NOTE: Sales literature is categorized by subject. Create a subject tree before adding any literature or documents. Refer to Lesson 4 for more information about creating subject trees.

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Users can view sales literature by directly searching the literature list or view it while working on an opportunity. Sales literature can be associated with either products, competitors, or both. Organizations can make relevant sales literature easier to find by implementing either a product catalog or the competitors module, or both, and then relating the literature to the appropriate product or competitor. The sales representative can then look up the relevant literature based on the product or competitor associated with the opportunity.

Procedure: Add or Edit Sales Literature

The Sales Literature area provides a way to add, remove, and manage documents associated with products and services. 1. In the Navigation Pane, click Sales, and then click Sales Literature. 2. On the Actions toolbar, click New. 3. Fill out the following on the Sales Literature form: In the Title box, type a title of a sales literature. This is a required field. Enter the Subject, type in the subject and click the Lookup search icon, or click the lookup search icon. Select the subject. If there are no other subjects listed, select Default Subject. This is a required field. In the Type drop-down list, select the type of sales literature. Under Description, type any detailed information that needs to be highlighted in the sales literature. Employee contact, this field indicates the most knowledgeable person about the sales literature you selected. Expiration Date, this date is when the sales literature expires and is no longer available. 4. Click Save and Close.

Procedure: Add Documents to Sales Literature

You can attach documents to sales literature. When adding a document, you must enter a title. You can also specify the author and add keywords, which can be used later to locate the document. 1. In the Navigation Pane, click Sales, click Sales Literature, and then double click a sales literature title to open it. 2. In the form's navigation pane, click Documents. 3. On the Actions toolbar, click New Document. 4. Enter the Title that describes the document. This is a required field. 5. If known, type in the author of the document under Author.

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6. Under Keywords, type in keywords to help identify the document. 7. To attach a file to the document, click Browse to locate the file, and then click Attach. Attaching a file might take a few minutes, depending on the size of the file. 8. Click Save and Close.

Procedure: Remove Documents from Sales Literature

1. In the Navigation Pane, click Sales, click Sales Literature, and then double click the sales literature title to which you added a document. 2. In the form's navigation pane, click Documents. 3. Select the document to be deleted, on the Actions toolbar, click the Delete icon, and then click OK. 4. Click Save and Close.

Summary
This lesson provides an overview of the features available in the Sales area of Microsoft Dynamics CRM. It described each area of the sales system in greater detail and provided guidance to help decide when to use each.

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Test Your Knowledge

Sales Assistance
1. Microsoft Dynamics CRM provides assistance with which of the following? Select all that apply. (Select all that apply.) ( ) Lead Management ( ) Sales Forecasting ( ) Guaranteed sales ( ) Tracking customer communications

Business Benefits
2. What business benefits can be gained by using Microsoft Dynamics CRM? Select all that apply. (Select all that apply.) ( ) Shorter sales cycles ( ) Higher close rates ( ) Better customer retention ( ) Better inventory management

Creating an Opportunity
3. What needs to be present before creating an opportunity? ( ) A marketing list ( ) A lead ( ) A competitor ( ) A customer

Leads
4. Is the use of leads required for the sales process? ( ) Yes ( ) No

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Sales Process
5. Task: Arrange the following in order according to their position in the sales process, from first to last. Select all that apply. Step _____ : Opportunity Step _____ : Quote Step _____ : Lead Step _____ : Invoice

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Lab 6.1 - Create Competitors

In this lab, enter a competitor in the competitor form instead of importing. The lab is intended to familiarize you with the fields in the competitor form. As you perform the instructions use the information in the Scenario and Goal Description to complete the lab. Scenario To review how effective a recent marketing campaign performed you created a report of how many opportunities you have won. You have found a significant number of opportunities closed with a loss to [name] company. This company may pose a threat so you feel you should analyze and track them. You ask one of your Marketing Representatives to create a competitor in Microsoft Dynamics CRM to follow up on this [company] and track the competitor's activities. Information about the company: Name: Website: Address: Keyproduct:

Goal Description The goal of this demonstration is to learn how to create a competitor in Microsoft Dynamics CRM. This will place the competitor in the system for future analysis.

Challenge Yourself!
Use the information in the Scenario and Goal Description to complete the lab.

Need a Little Help?

Use the information in the Scenario and Goal Description to complete the lab. 1. In the Navigation Pane, click Sales, and then click Competitors. 2. On the Actions toolbar, click New. 3. On the General tab, enter the Name, Web Site, Address, and Key Product. In this lab, this is the product [name] produces that competes against you. 4. On the Notes tab, click the line Click here to enter a new note... When the cursor bar begins blinking enter a quick note about the company; Company needs threat assessment. 5. Click Save and Close.

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Quick Interaction: Lessons Learned

Take a moment and write down three key points you have learned from this chapter: 1.

2.

3.

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Solutions
Test Your Knowledge
Sales Assistance
1. Microsoft Dynamics CRM provides assistance with which of the following? Select all that apply. (Select all that apply.) () Lead Management () Sales Forecasting ( ) Guaranteed sales () Tracking customer communications

Business Benefits
2. What business benefits can be gained by using Microsoft Dynamics CRM? Select all that apply. (Select all that apply.) () Shorter sales cycles () Higher close rates () Better customer retention ( ) Better inventory management

Creating an Opportunity
3. What needs to be present before creating an opportunity? ( ) A marketing list ( ) A lead ( ) A competitor () A customer

Leads
4. Is the use of leads required for the sales process? ( ) Yes () No

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Sales Process
5. Task: Arrange the following in order according to their position in the sales process, from first to last. Select all that apply. Step 1 : Opportunity Step 4 : Quote Step 3 : Lead Step 2 : Invoice

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