Best Practices for B2B SaaS Opportunity Management

Opportunities play a crucial role in forecasting future sales for B2B SaaS companies. However, the diversity of SaaS products in the market often leads to unique challenges and demands from executives. In the early stages, companies strive to sell their product to demonstrate market demand, even if it lacks certain features. This often results in customized deals, discounts, and promises to address customer needs. As a result, each opportunity becomes distinct, requiring sales teams to be creative.

Balancing the need for scalable processes with the flexibility required in sales can be a challenge for early-stage companies. Executives sometimes expect salespeople to provide extensive product data, inadvertently burdening them. To navigate this situation effectively, it’s important to consider the following best practices.

Record Types vs. Page Layouts

When implementing new processes, it’s common for sales managers or separate teams to desire different approaches. Inexperienced Salesforce administrators may default to creating new record types when introducing process changes. However, record types should be reserved for situations where processes differ significantly or distinct access rights are necessary. For example, if specific fields need to be locked down (while remaining visible) after opportunity contracts are approved, switching record types might be appropriate to restrict access to finance and senior management.

Pro Tip: If you require different picklist values for various page layouts and record types, remember to assign the values on the record type configuration page.

Page layouts, on the other hand, are suitable for most scenarios. For instance, customer success teams might only need access to a subset of fields on the opportunity page without delving into the sales methodology. Multiple page layouts can be assigned to different profiles within a single record type.

Previously, record types were necessary to display different fields based on opportunity types. However, dynamic lightning pages now offer greater flexibility, allowing field visibility to be controlled based on stages. It’s recommended to explore dynamic lightning pages and leverage their capability to hide or expose fields as needed, provided that the selling teams can agree on stages.

Embrace Validation Rules for Enhanced Control

Validation rules can be valuable in ensuring data cleanliness and facilitating the generation of quarterly reports. For example, a validation rule can be created to prompt users to update the close date for open opportunities when they are set to close in the past. Another example is not allowing the amount field to be blank after reaching a specific stage.

While validation rules are useful, it’s crucial to prioritize usability. In one instance, I consulted for an organization that had over twenty validation rules, resulting in salespeople resorting to Excel for forecasting calls. Streamlining the system and removing friction can eliminate excuses for sales teams to avoid using Salesforce, increasing adoption rates. In this particular case, we used the sales team’s refusal to forecast as evidence to convince the finance and product teams to eliminate unnecessary data points.

A reliable forecast to report to the board holds more significance than collecting prospects’ opinions on numerous potential features.

Simplifying Opportunity Contact Roles

Here’s a secret: Marketers typically dislike dealing with opportunity contact roles. Although necessary for connecting campaign information to opportunities, sales teams often view data entry as a non-selling activity. Enforcing or automating contact roles can be challenging due to high turnover rates, leaving marketers without solid proof of their effectiveness.

You have two options to address this issue. One is to ensure opportunities have a primary contact by mandating that opportunities be created from the contact object. The second option involves utilizing a data warehouse, data lake, or customer data platform for marketing reports, eliminating reliance on contact roles. The first option requires removing the opportunity create button from the account related list and opportunity object tab, while it’s advisable to restrict the clone button to administrative profiles.

Tracking MRR, LTV & TCV

While investors are interested in bookings, they are more concerned with what is repeatable. Total Contract Value (TCV) calculates the sum of all dollars involved in a single contract. The amount field in the opportunity often includes recurring revenue and upfront fees not captured in the Monthly Recurring Revenue (MRR).

MRR can be calculated using a rollup summary field that sums the actual prices of product line items, with an indicator for recurring revenue when the line item is marked as such.

Customer Lifetime Value (LTV) is typically determined by calculating the average first-year contract value plus the average renewal and expansion value over the remaining customer lifetime. It’s important to consider additional factors such as annual subscriptions, one-time fees, and future upgrades. By analyzing these values, LTV can be accurately determined.

If you use a Configure, Price, Quote (CPQ) product, the object structure may differ from opportunities and opportunity products. When implementing such tools, ensure you inquire about rollup fields and the ease of swapping out quote lines, as this is a common practice for sales executives who generate multiple quotes. Implementing a single primary quote can help prevent incorrect roll-ups by restricting manual edits when necessary.

Integrating ERPs

Integrating Enterprise Resource Planning (ERP) tools with Salesforce can be complex. Here are a few key considerations:

1. Ensure your integration supports updates and corrections.
2. Verify the alignment between the ERP and opportunity line items before integration.
3. Consider using contracts and auto-populating renewals with product line items.
4. For co-termed deals, requiring multiple opportunities is recommended to maintain accurate reporting.
5. Strive to find a solution that works seamlessly between quoting and accounting systems. If conflicts arise, involve the operations team in the opportunity division work during the close process to minimize complaints and reliance on spreadsheets.

Pro Tip: Streamline the quote approval process as much as possible. If multiple rules need to be triggered upon submission, consider considering the opportunity as approved if the highest-ranking person approves the submission. Requiring multiple tiers of approval can frustrate everyone involved.

Managing Usage-Based Billing

There isn’t a straightforward solution for handling usage-based billing. If your sales team receives commissions based on estimated yearly value while also capturing the actual monthly billing rate, you may need to consider two record types—one for commissions and another for reporting purposes. Collaborate closely with the finance team to determine how to report the amount upon closure and account for monthly adjustments.

In general, it’s recommended to update existing, closed opportunities only in the event of complete payment failure. Partial cancellations are usually not permitted. If exceptions are made, you’ll need to decide whether to update the original amount (in cases of clawbacks) or create a “Correction” type opportunity with a negative amount to account for the difference. The approach chosen may vary based on the CFO’s preferences.

Cancellations, Clawbacks & Churn

Maintaining clear customer status indicators at the account level is valuable. Recommended picklist values include:

1. Prospect
2. Customer
3. Churned

It’s advisable to retain date stamp fields for customer acquisition and churn dates. This enables quick assessment of an account’s status and facilitates cohort analysis of customer and churn data.

Avoid using cancellation-type opportunities. Instead, when a customer chooses not to renew, mark the renewal opportunity as “Closed Lost” and update the Churned and Churn Date stamp fields. Leave previously won opportunities unchanged to ensure historical reporting accuracy. The only exception is when a customer refuses to pay, leading to a clawback. In such cases, considering the deal as lost is fair, as no revenue is generated for the business.

Salesforce is Flexible

While the outlined best practices are applicable to many SaaS businesses with sales teams, it’s important to note that Salesforce offers flexibility, and specific circumstances may require deviations from these recommendations. There is no single “right” way to achieve everything in Salesforce, so it’s crucial to exercise your judgment and leverage peer resources to find the best solutions for your organization’s unique situation.