CRM “Stage” Craft

posted Sep 7, 2013, 2:35 PM by Douglas McCartney
What Are The Right Opportunity Stages for Your Business?

One of the things most sales teams start doing with their new CRM is to begin tracking their opportunities, but in their excitement to get started they often just “go with” the stages that are in the system by default. Of course, one might assume that the default list represents some sort of “best practices” guideline, so why would anyone change them? Well, I would say, because when it comes to selling your product to your prospects YOU are the EXPERT, not the CRM software provider.  So in a nutshell, a lot of companies end up with opportunity stages that don’t work for the sales team and don’t work for management either.

Further, when stages have been customized beyond the provided standard, they are often what I would call logistically oriented stages, which really aren’t stages at all. You thus see lists such as the following:

  1. initial contact

  2. scheduled demo

  3. demo complete

  4. proposal sent

  5. negotiate agreement

  6. etc.  

But that is a very tough list to work with as well, for as anyone who has tried to work with such has found you run into an endless series of exceptions. The standard “rule” in other words, too often doesn't apply.   

For example, perhaps you have multiple people to make an initial contact with, but to get to the second you’ll need to do a short little demo for the first? Or your prospect contact won’t budge until you give him or her some idea on pricing so you need to send them something akin to a proposal, but in fact you’ll skinny it down so you have someplace to go later on (and when the value of your service is better understood). In those cases, what is your sales rep to do in regard to picking a stage? They are doing a demo and or sending out pricing, so aren't they well beyond initial contact? In those two examples they clearly are not. But alternatively, if they leave them at Initial contact someone might ask why they did a demo? The point is that the rep really isn’t sure where to put this prospect and worse, management has no real idea how close the rep is to a sale. That is clearly not any good for anyone involved.

So in my experience, I've always rejected a logistics focused list like the one above and instead tried to focus on the spectrum that starts with identifying an issue and on to proving my solution. In fact, even before we had CRMs and we instead “diagrammed” our prospects out on paper, I always kept stages focused on this problem solving approach or method. Selling after all is always about solving problems (current or future). But it’s always been a bit hard to get everyone to agree on that approach and more importantly selecting a few key stages and words to describe them.

Enter a book  I recently picked up at the suggestion of Ian Smith of The Portfolio Partnership and author of the blog, the Smith Report ( Ian is an expert in the field of sales and marketing process and is a real student of available resources. The book he recommended has many great sales insights, but a primary focus is how best to approach a sales process.  The book is Exceptional Selling by Jeff Thull (John Wiley & Sons, Inc. Hoboken, New Jersey 2006).

As Jeff puts it, a salesperson has four primary goals. They are:

“(1) to quickly and effectively identify the customer who has the highest probability of purchasing the offering; (2) to provide the customer with the incentive to change; (3) to provide the customer with the confidence to invest; and finally, (4) to ensure that the value promises made are fulfilled. ” (Exceptional SellingJeff Thull, Page 78)

For Jeff, that boils down to four basic steps or stages that can apply to any size sale and any type of deal:

  1. Discover

  2. Diagnose

  3. Design

  4. Deliver

These four stages - or the four Ds as I like to call them (I believe Jeff calls it the Prime Process) - capture what your sales team and your organization needs to do to win and maintain business. In short, I submit that very few organizations if any need more stages in their CRM. Using them keeps your stages simple, understandable, and most importantly information valuable. If you are on to delivering your solution to a client you are clearly very close to a completed long term sale. But further, from my point of view, the four stages can also clearly inform your organization on how you want to think about marketing as a whole, what you do in your sales calls and presentations, and even how you compensate your sales team. The trick of course, is to determine how best to fit the logistics of your sales process into them, but that is something we would be happy to help you with, so feel free to give us a call.