The Opportunity Stages in Salesforce should match your sales process. However, the chances are, you think they don't. That's likely to be especially true if you're still using the standard opportunity stages—those out-of-the-box stages in Salesforce. Of course, you...
The Opportunity Stages in Salesforce should match your sales process.
However, the chances are, you think they don’t.
That’s likely to be especially true if you’re still using the standard opportunity stages—those out-of-the-box stages in Salesforce.
Of course, you can change them. (If you’re unsure how to do this, I explain the steps thoroughly in the video at the end of this post).
However, if the pre-defined stages are not what you need, the question is, what should the Salesforce opportunity stages be in your business?
I’ve seen this provoke many heated discussions. The answer is often a fudge, and the outcome, sometimes, is far too many stages.
Nevertheless, getting the opportunity stages to reflect your sales process accurately is essential. The benefits include greater visibility of the sales funnel and better pipeline management, and you’ll also get reliable pipeline coverage metrics and better tracking of sales versus target.
In this complete guide, we cover:
- How opportunity stages work and why they are critical.
- The four common mistakes to avoid.
- The five popular opportunity stages many companies use.
- How to make the changes in Salesforce.
- Best practices tips and advice you can use today.
Not only that, but I also point you to other helpful resources that help you get the best out of Salesforce. We even have a free special offer for you at the end of this article.
By the way, I also created a video to accompany this blog post: Six Recommended Opportunity Stages. I explain each stage and give examples of exit criteria.
With that, let’s start.
Why Opportunity Stages Are Important
To understand why let’s take an example.
To understand why let’s take an example.
This dashboard chart shows how the stages combine with the Close Date and Amount. It’s a great way to summarize the pipeline.
For example, we can see that the funnel contains $750K of opportunities due to close in November.
Of this, $40K is currently at the Prospecting Stage, and another $50K is in the Investigation Stage. You can easily see the values for the other stages.
You get the picture.
This type of chart is vital because it helps managers forecast accurately and prioritize sales activities.
The Best Sales Pipeline Chart To Use This Year. Step-by-step advice for getting reliable funnel visibility.
Opportunity Stages Explained
Having realistic opportunity stages is critical for sales managers because you get much better pipeline visibility.
Opportunity Stages and Probabilities
In Salesforce, each opportunity stage links to a pre-defined percentage probability. You can change these quickly (I cover the steps in the video at the end).
How To Make Opportunity Probability Your Trusted Friend. Detailed advice on using the opportunity probability to your advantage.
Opportunity Stages and Forecast Categories
Forecast Categories in Salesforce are a way of grouping opportunity stages.
That means they are a valuable way of summarizing the pipeline. That’s why some businesses use forecast categories to build their sales projections.
However, in my opinion, the Forecasts Tab is very complex. The tab is supposed to help create forecasts and track sales versus quota. However, many salespeople and managers find it challenging to use.
Fortunately, it’s only one of four ways to measure sales versus target in Salesforce. To understand all four, I recommend this blog post:
Five Common Opportunity Stage Mistakes to Avoid
Here are the five things I often see companies doing wrong when it comes to opportunity stages. I’ve included a best practices tip on avoiding or fixing the error in each case.
1. Stages are not clear
It’s essential that opportunity stages are well defined and do not overlap. Unfortunately, many times I see unclear stages.
Always, ambiguity here is a big mistake. That’s because a deal may be in one stage when it really should be in another. The result is that funnel visibility is unreliable because it’s distorted.
For example, I worked recently with a client that had stages of Closing and Negotiation.
What’s the difference? I didn’t know. And more importantly, neither did the sales team.
The result is that reports and dashboard charts didn’t deliver meaningful information on deals likely to close soon.
Make sure opportunity stages are clear, unambiguous, and do not overlap. Establish exit criteria for each stage. Communicate the meaning and definition of each stage clearly to salespeople.
2. Opportunity Stages don’t reflect the sales process
In an ideal world, opportunity stages reflect the customer buying process. That way, the pipeline reflects where each deal is along the buying journey.
Unfortunately, there are three problems with this.
First, every customer’s buying process is different. That means it’s hard to standardize, and you’d end up with a lot of varying opportunity stages.
Second, the customer may not want to give us full details of their buying journey, where they are up to, and who is involved.
Third, even our key contacts may not fully understand the buying process. That’s likely to be especially true if it’s a significant investment they haven’t made before and there are many stakeholders.
So what do you do?
The answer is to make sure your opportunity stages reflect your sales process. That way, you do at least know where you stand from an internal point of view.
Nevertheless, there is work to do. The standard opportunity stages that come out of the box with Salesforce are unlikely to mirror your sales process.
That means you need to change them. (The video at the end of this blog post explains how to customize the opportunity stages in Salesforce).
Later in this blog post, I’ll explain the five opportunity stages that many B2B companies already use.
Nevertheless, you might be wondering:
What if I have more than one sales process?
For example, in many companies, there’s a defined sales process for new customers. And another, shorter one for renewals or upgrades.
I recommend you use Opportunity Record Types to handle this.
It means you create different record types for each sales process. Then modify the opportunity stage picklist for each record type. In other words, only include those stages relevant to each record type.
Modify the standard opportunity stages in Salesforce to align with your sales process tightly. Use opportunity record types if you have more than one sales process in your business.
3. There are too many Opportunity Stages
If you have too many opportunity stages, this is what happens:
Here are three reasons why this happens.
- The business is trying to get too granular in measuring the pipeline.
- You are not using record types to separate different sales processes.
- You use the opportunity stage field to track post-sales activities such as delivery or fulfillment.
If you have a very long sales cycle or want more detail on where each deal is in the sales process, I recommend tracking sub-stages in a separate field.
Likewise, use other fields to capture post-sales progress. Using the stage picklist to track post-sales progress makes reporting on won deals or win rates more challenging.
Don’t overdo things. Stick to four or five pipeline stages for clarity on the sales funnel. Use other fields if you need extra information or want to record post-sale progress.
4. Opportunity Stages are not verbs
It’s a mistake to use milestones as opportunity stages. Instead, I recommend you use verbs.
For example, Qualifying is better than Qualified. That’s because Qualifying describes the status of the deal over time. In contrast, Qualified is a milestone that means you probably proceed to the next stage. However, it doesn’t tell you anything about what is happening right now.
(We’ll talk about whether Qualifying is a stage you should include later. You might be surprised).
Likewise, I sometimes see a stage like First Meeting. However, the deal is only in that state for the hour it takes to conduct the call. It’s much better to use Discovery or Investigation. Those words give a better sense of the meetings, phone calls, and email exchanges taking place over time.
In other words, each stage should reflect the status of a deal over time.
That period might be weeks or even months. During this time, the salesperson does many things to move the opportunity along. Consequently, action-oriented opportunity stages are better than milestone-based stages.
Use opportunity stages that represent a series of customer interactions over time. I recommend you avoid stages that sound like one-off milestones. Instead, verbs are almost always the better choice.
5. Opportunity Stages are not up to date
As we’ve seen, its crucial opportunity stages accurately reflect the sales process.
However, it’s also essential that salespeople maintain the stages of each deal. If not, then pipeline reports and sales forecasts count for nothing.
For example, this sales dashboard chart shows the current pipeline.
Let’s assume we are in the last week of November, and the sales cycle in this business is three months.
Here’s the first question:
Are those deals in Prospecting and Discovery that are due to close in November really at the right opportunity stages?
If they are, then you’re right skeptical about whether they really will close successfully this month.
That means my pipeline view is probably not accurate. Either the deals should be at a more advanced stage or a different close date (or both).
And here’s the second question:
What are those open deals doing in earlier months? Unless you have a time-turner, they are not going to close successfully in previous months.
Either way, failure to keep opportunity stages up to date will ruin your funnel visibility.
Make sure everyone understands the importance of updating and maintaining the stage on each opportunity. Create a formula field that shows the number of days since the last opportunity stage change. Combine this metric with others, such as the number of times the Close Date has moved from one month to the next. Use these metrics to validate your sales pipeline reports.
For more information on these Opportunity mistakes and the best practices to avoid them, see this video: Five Opportunity Stage Mistakes To Avoid.
Recommended Opportunity Stages
- Prospecting (or Qualifying).
- Discovery (or Needs Analysis).
- Customer Evaluating (or Proposal).
- Closing (or Negotiation).
- Closed Won.
- Closed Lost.
Some businesses have additional variations of Closed Lost. Qualified Out and No Purchase are examples of this.
Let’s crack on.
The Prospecting (or Qualifying) Opportunity Stage
These deals are in the first stage of your sales process. Opportunities in this stage are your long-term pipeline.
Often, you think there’s a deal, but right now, it’s far from certain.
The customer may not yet have a budget or timescale commitment. The Close Date is uncertain and can be many months in the future.
Sometimes, the customer – if asked – might not even agree that a potential deal yet exists. That’s because you are busy educating the stakeholders on how the status quo needs to change.
Nevertheless, entering deals in this stage is valuable because it’s essential to keep track of those long-term prospects you are targetting.
The primary outcome of this stage is deciding whether to spend more time, effort and resources working on this opportunity.
To determine this, ask these four questions:
- Is there an opportunity?
- Can we win it?
- Is it worth winning?
- Do we want to win it?
You might think questions three and four sound similar. Nevertheless, they are different.
‘Is it worth winning?’ is an economic question. Are the revenue and margin worth the cost and effort?
‘Do we want to win it?’ is a strategic question. Existing customer relationships or marketplace dynamics may give a compelling reason to attempt to win the deal. These factors may apply even if it’s not that attractive economically.
Currently, you may not be able to answer these questions definitively. However, there needs to be enough information to decide whether to move to the next phase.
Incidentally, I prefer the term Prospecting rather than Qualifying for opportunities at this stage.
That’s because, as Alan Morton, CEO of SBR, says, “qualifying is a continuous activity throughout the sales lifecycle; it’s not a one-off step early in the process.”
Either way, many Prospecting opportunities will be removed directly from the pipeline at this stage. That’s fine. Don’t waste time with deals that don’t have legs.
- Positive answers to the questions that qualify the deal.
The Discovery (or Needs Analysis) Stage
The traditional way to think about this stage is to find out about the customer’s business situation.
The aim is to align the proposal or quote you send in the next stage with precisely what the customer wants.
However, the best salespeople go far beyond this.
They are not passively listening to the customer. Instead, they often directly influence or change how the customer perceives their needs. This activity is widespread in cases where the customer plans to issue an RFP. You want to bend the content to align with the capabilities of your products and services.
Likewise, high-performing salespeople also find out about many other factors influencing their chances of a successful outcome. They ask questions about the decision-making process and gather much information about the people involved. They also gain vital details about the budget and timescales and collect news about competitors.
That’s why I prefer the term Discovery to Needs Analysis because it better describes what is happening in a successful sales process.
Finally, in this stage, re-ask the four qualification questions. You can now answer with more conviction and certainty. If these answers are not compelling, remove the deal from your pipeline.
- There is clarity around how the customer views their needs.
- A thorough understanding of the buying process and the people involved.
- You have updated the qualification questions with convincing answers.
The Customer Evaluating (or Proposal) Stage
In this stage, the Customer receives your proposal or quote. To proceed beyond this stage, the Customer must agree, in principle at least, to do business with you.
Of course, you do not have to issue a formal quote. However, you are communicating specific pricing and scope proposals. In other words, stakeholders within the customer business are evaluating the particular value your company is offering.
(If the stakeholders are not evaluating your proposals, the deal is lost or at a different stage).
In many companies, this opportunity stage is called Proposal Made or suchlike.
I’m okay with that, although I believe that Customer Evaluating more accurately reflects the activity both you and the prospect are probably doing.
That’s because other activities might include proof of concept demos, reference visits, or a short video to demonstrate the solution.
These activities might happen before you send your detailed proposals. Some companies also prefer to siphon these activities into an earlier stage (Demonstrating Value, for example). Whether you need to do this depends upon your sales process.
- A commitment from the customer (in principle at least) to do business with you.
- Agreement on the essential details of your proposal, even if the precise details and finer points still need to be hammered out.
- A detailed Close Plan agreed with the customer. These are the specific steps required to get ink on the contract.
Closing (or Negotiating) Stage
Many people call this final pipeline stage Negotiating.
I prefer Closing, for several reasons:
- Negotiating implies we are likely to make concessions on pricing or terms and conditions.
- Closing better describes the complete set of activities probably needed to get the deal done.
There’s likely to be a discussion on the commercial terms. And almost certainly, there’s a legal contract to finalize and get signed.
However, I recommend you think through all the other activities that need to take place. These may include handing the deal over for fulfillment, briefing customer services, or agreeing on a delivery schedule.
If you have a project to deliver after winning the deal or other fulfillment steps, I recommend you track the status in different fields, not the opportunity stage. That’s because adding new post-sales stages muddies the water when it comes to measuring win rates and sales performance.
- A contract signed by the customer.
- Other critical details (e.g., delivery plan) are agreed upon and documented.
The deal has concluded successfully. The contract has a signature — time for a celebration.
Use this stage when the deal is not proceeding.
Perhaps the customer decided the products or services from another supplier offered a better solution.
Alternatively, you may have decided not to expend more time and effort on the opportunity. For example, you could not write compelling answers to the ‘four questions’ test we looked at in earlier stages.
Remember, it’s vital to re-examine and upgrade your answers at each step in the sales process. This process is not a one-off activity that takes place at the start of the sales cycle. Instead, it should happen every time you are ready to move from one stage to the next.
As my friend Bud Suse likes to say, “if you’re going to lose, you might as well lose early.“
Of course, there’s another scenario. The biggest competitor for many companies is ‘Did Not Proceed.’ In other words, the customer decided not to go ahead with the project, or it simply fizzled out.
Both cases mean you might want to use two further stages.
‘Qualified Out’ means there is not enough mutual benefit for either party to spend any more time and effort on the deal. ‘No Purchase’ indicates the customer did not commit to any supplier.
Either way, open opportunities that no longer have legs are the most significant source of over-inflated sales pipelines and inaccurate revenue forecasts. If you want reliable pipeline visibility, it’s essential to remove lost deals and dormant opportunities with no realistic chance of ever proceeding.
Opportunity Stages in Salesforce Lightning
First, use the path to display the stages.
Salespeople click on the path to move the opportunity to the next stage.
I recommend you adjust the path to include a stage definition, vital activities, and exit criteria.
The Kanban view gives salespeople a dynamic display of all deals.
Salespeople drag and drop opportunities from one stage to another. It’s a quick and easy tool for updating deals and keeping the pipeline accurate.
How To Change Opportunity Stages In Salesforce
The default opportunity stages in Salesforce are:
- Needs Analysis
- Value Proposition
- Decision Makers
- Perception Analysis
- Proposal/Price Quote
- Closed Won
- Closed Lost
In this video, I show you step by step how to change these default stages to values that suit your business.
Getting In touch
That’s why we have a free offer for you.
Get in touch, and we’ll hold a thirty-minute web meeting with you to talk through your stages. We’ll help you decide upon the settings that best suit your business. No charge, no gimmicks.
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The Opportunity Stages in Salesforce should...
Many sales managers are crestfallen when it...