Defining the Opportunity Stages that accurately represent the sales process is one of the key tasks facing any business that is using salesforce to track sales pipeline performance..
The standard out-of-the-box Opportunity Stage salesforce values often don’t reflect the terminology or stages that the sales teams use in your business. As a result, businesses that use salesforce often make three fundamental mistakes in defining their sales stage picklist terms. This blog will help you avoid these three common mistakes and to give you a great starting point for configuring your own Opportunity Stage values.
The screenshot below shows examples of the common problems with sales stages:
The three most common mistakes are:
- Too many sales stages.
This happens particularly in industries that have lengthy or complex sales cycles. The result is that on the dashboard it’s impossible to see the wood for the trees when you look at a pipeline chart. Solution: Restrict the pipeline to 4 or 5 key stages no matter how you might perceive the complexity of your sales process. Put other values in a ‘sub-stage’ field using the related picklist function.
- Ambiguous or overlapping sales stages.
The Opportunity Stage values should represent clearly delineated steps in the sales process. For example, “Needs Analysis” and “Investigation” both imply that we’re engaged with the customer in defining the needs and requirements more closely. Solution: Make sure the sales stage values are clearly defined and agreed and cannot be mis-interpreted.
- Picklist values represent specific milestones rather than phases in the sales lifecycle.
For example, “Meeting Booked” is sometimes used to denote the start of the investigation or discovery process. Or “RFI Received” to indicate that the Request for Information has arrived from the customer. But these terms really describe entry points into sales stages that will potentially require many meetings and phone conversations. Solution: Make sure each sales stage value represents a phase in the sales cycle that will require one or more independent activities.
So what’s a good starting point for a set of Opportunity Stage picklist values? Here’s a common set of sales stages that apply to many sales processes. Obviously customise and adapt them to your own business.
This is the earliest stage in the sales process. It reflects the probability that we think an Opportunity might exist but that further qualification is required.
Often the Prospecting Stage is used to create an Opportunity on an existing Account whereas a Lead would be created for a brand new prospective customer.
Investigation, or Discovery if you prefer. Describes the work we’ll do to find out more about the customer’s needs and requirements so that we can create a quote or proposal.
In some businesses the Investigation Stage will coincide with the receipt of a Request for Information (RFI) or Request for Proposal (RFP). If so then we’ll probably need a field on the Opportunity page layout to store the response deadline date.
The customer is evaluating the proposal. This proposal may not have been in the form of a formal document – it could be indicative costs and pricing. During this stage the sales person will be communicating the value of the proposal through meetings, presentations, re-quotes, phone calls and emails.
In principle the customer has accepted our proposal or quote. Now we’re involved in finalising pricing and agreeing the terms and conditions.
The deal is done!
The definition of what constitutes a ‘won’ deal can vary between organisations. The cleanest approach is usually to update the Opportunity Stage when the contract is signed by the customer. However other organisations may chose to allow Opportunities to be set to Closed Won when the fulfilment process starts or the project is handed over for delivery. In either case the important thing is there’s no ambiguity. We don’t want one sales person’s Closed Won to be another’s Negotiation.
The emotive Opportunity Stage!
There should be no shame in setting an Opportunity to Closed Lost. No sales team on earth will win 100% of its Opportunities. Indeed in many industries, if the win rate is over 30% then it suggests that only those sales deals that are already well advanced in the sales cycle are being entered into the sales pipeline. And this means you’re missing out on pipeline visibility. You can address this by using these dashboard charts to measure sales pipeline quality.
In order to soften the concept of “Closed Lost”, businesses will sometimes add additional Opportunity Stages – Not Proceeding for example. This reflects the fact that the customer has not chosen a competitor. They’ve simply not made any purchasing decision at all. But this risks clouding the quality of management information by adding multiple Stages to the dashboard chart. Better to collect lost reasons in a separate, related picklist or text field and then report on it using an adjacent dashboard chart.
Of course defining the Opportunity Stages is only the first step. Obtaining visibility of the sales pipeline and sales performance is often the most important benefit that businesses are seeking to obtain from their salesforce licenses. For that reason we’ve published extensively on how to configure dashboards to give full and robust management information.
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