Simplifying Sales Stage Definitions for Inside Sales Teams

This week, a customer's Sales Enablement manager asked:

"Do you have any sales stage definition best practices?"

Below is a summary of our response, which relates to inside sales business development representatives (BDRs) focused on inbound lead qualification and outbound prospecting.

As teams move to Work From Home (WFH) and re-think how to manage themselves and engage with customers and prospects, it's not a bad time to go back to basics and consider how things like sales stages underpin the sales function. Stages are integral to CRM usage and an important building block for managing the sales pipeline, creating transparency, coaching the team and improving productivity.

For context, the BDR portion of the sales pipeline is just downstream from Marketing, where B2B companies typically use marketing automation platforms, lead databases and social media to generate leads.

BDR teams receive Marketing Qualified Leads (MQLs) and generate their own leads through self-directed prospecting. Leads come in as Open and are in a Working status as BDRs engage. If qualified, leads are Converted to a bona fide opportunity and passed to the Account Executive (AE) for further qualifying, proposing and closing, or Archived for potential future prospecting or Disqualified (see diagram).

Simplicity

A simple framework should be able to classify a diverse set high-speed/volume inside sales activities and outcomes. If it can't, it's probably not simple enough. And if your sales stages are not used in practice (ask the BDR team for a demo of how they use CRM), it could indicate an opportunity to consolidate stages.

Lifecycle

Keep in mind that the pipeline is not one way. It’s a lifecycle. A large percentage of leads worked by BDRs are Archived due to no response. However, the same leads can re-appear tomorrow, next quarter – even years in the future. Having a system that accommodates re-introducing existing archived leads is helpful as it enables a better understanding of the lifecycle of engagement leading to new business.

Stages are Milestones NOT Process

Sales stages signify that a certain milestone has been reached, but they do not specify behaviors required to achieve the milestone. Processes define and implement behaviors; They are the engine of pipeline throughput... and in major need of improvement... but for the purposes of this article they will remain a welcome topic for another day.

The following sections go into more detail.

I. STATUS: Reflects lead quality and progression through the pipeline

For BDR teams the usual progression is MQL > SAL > SQL

• MQL: Marketing Qualified Lead is a threshold crossed based on score or type of engagement. Inbound leads often sail through without being scored because the prospect has expressed true interest.
• SAL: Sales Accepted Lead signifies that the BDR evaluated the lead and thought it worthwhile to engage via email/call; It was not immediately disqualified.
• SQL: Sales Qualified Lead means that the BDR qualified the lead and sent it to the AE with an active opportunity for the current fiscal period, or with potential for a future opportunity and worthwhile to have in the AE's active prospecting territory.

II. STAGE: Reflects where a lead is in the pipeline

Open

Open means that an MQL has come in and is ready for BDR effort, but no effort has been made yet (no email or call tasks logged). We prefer Open to “New” because New only happens once whereas a Lead could be Open, then Archived, then Open again. It's clumsy to have New and Open... just Open is cleaner. BDRs can check activity history and notes for previous engagement, and Acuity3D flags “New” if new to Salesforce.

Working

Working means at least one email or call task has been logged. For understanding the cycle time of the pipeline, it’s helpful to know how long a lead was Open before being Worked and how long Worked before being Converted, Archived or Disqualified.

Exit (Converted, Archived, Disqualified)

• Converted means that the BDR qualified the lead. If an Opportunity is created, the AE owns next steps. If there is no immediate Opportunity, but the prospect (Contact associated with an Account in Salesforce) the team should determine if the AE, BDR and/or Marketing owns next steps.
• Archived: Either no contact was made, so it's not a definitive Disqualify (BDR never heard back) or contact was made and there is future potential but not worth pursuing for now. The team should define how and when to re-engage, such as through drip marketing managed by Marketing and/or the BDR.
• Disqualified: No future opportunities; Exclude from future Sales and Marketing activities.

These three stages are simple and comprehensive. Sales and Marketing leaders seek to track the full pipeline from Marketing to BDRs to AEs, which is easier if the total number of stages is small and tightly defined.

III. DISQUALIFIED vs. ARCHIVED and REASON CODES

• Disqualified: Means no future potential. Examples reason codes include: missing contact info, outside of strike zone (e.g., # users, $ revenues, no needs), non-Sales engagement (e.g., partner or vendor inquiry, existing client question, general inquiry), others.
• Archived: Means the BDR was unable to contact the lead or there is future potential preventing disqualification. Example reason codes include: unable to contact, contacted no budget, contacted bad timing, others.

IV. ELIGIBILITY: Why and when to re-engage archived leads

• Time-Based: After a cool-down period of X days, Archived Leads can be re-engaged by Sales (become Open again) and/or Marketing (eligible for campaigns); BDRs can decide if re-opened leads are worthwhile, or use scores, or Manager or territory AE input.
• Event-Based: Prospect behaviors trigger eligibility (view/open content, contact the BDR or AE, fill out a web form).
• Campaign-Based: If an Archived Lead is put into a Marketing or Sales campaign based on profile, it could overrule any cool-down time period (e.g., promote a webinar, send content).

V. MARKETING/SALES COOPERATION

Imagine that... actual cooperation between Sales and Marketing!? It can and should exist if process and stages are defined clearly and implemented consistently between Marketing Automation and CRM.

What is an MQL?

MQL definition guides if, when and how a BDR gets involved.

• Inbound Leads: Hand-raisers ("Have Sales call me...") immediately merit sales attention and do not need to be scored; Sometimes called Hot Leads.
• Above Threshold Score: Inbound and outbound leads that exhibit a series of content engagement behaviors and attributes (industry, # employees, $ revenues, etc.) that push a lead over a threshold score.
• Below Threshold Score: Inbound and outbound leads that exhibit a series of content engagement behaviors that have not yet pushed a lead over a threshold score. Marketing either keeps working these leads or sends them to BDRs with a lower score that merits less effort.

Marketing Campaign Eligibility

• Ineligible: Sales teams sometimes object to Marketing engaging with active prospects in their pipeline and existing customers. Therefore, statuses such as Working Active AE Opportunity, Archived in Cool-Down, Disqualified or Existing Customer Exclusion could make a lead, opportunity or customer ineligible for Marketing engagement.
• Eligible: Leads that are Open or Archived are generally in scope for Marketing campaigns. A lead in a designated cool-down period could be re-activated to become eligible depending on the importance of the campaign vs. the reason for the cool-down.

VI. LEAD STATUS HISTORY

While we're here... getting granular... we recommend turning on lead status field history tracking. If history tracking is on, it’s possible to see status progression and which events and behaviors occurred while the lead was in various statuses. For example:

• How many times was the lead Open and Working before being Converted?
• How long did it take for the BDR to attempt to connect with the Open lead?
• How do BDR call/email activity, content and prospect answers to qualifying questions during Working correlate to Conversion outcomes? 

Without history tracking enabled, the only status available is the last/current one, which is less useful when trying to understand pipeline dynamics; Valuable data is lost.

Summary

Having a simply-defined sales stage lifecycle makes it easier for BDR teams to engage and qualify leads, and enables managers to analyze, report on and improve team productivity.

What do you think? What practices do your teams follow?

Please message me in comments, contact me directly or go to AcuitySDS.com for more information.