In the sales meeting, someone says an opportunity has reached the “Negotiation” stage. A proposal has been sent, the customer has been called, a few emails have gone out. But the customer has not yet commented on price or scope.
At that point, the progress shown in the CRM and the customer’s progress through their buying process have drifted apart. The sales team’s effort is on record; how close the decision actually is remains unclear.
That is the problem to solve when designing opportunity stages: what information explains the stage an opportunity is in? In this article we look at the exit criteria that make stages meaningful in day-to-day use, with examples.
First, choose the buying process you will track
Before naming the stages, decide which sales you will track in the same flow. A standard product order from an existing customer and the evaluation of a production system being bought for the first time can move very differently. For one, the product, quantity and delivery date are enough; the other may need a technical review, a trial and investment approval.
Running both through the same detailed process creates unnecessary record-keeping for simple sales. Tracking both in a very short process can hide important steps in complex sales. Opening a separate pipeline for every product makes management harder too. It is more practical to separate them only when the customer’s decision steps genuinely differ.
To start, review a few recent opportunities that were won, lost or left on hold. Look together at where customers moved forward, which information was missing and where things stalled.
Each stage should describe the customer’s situation
Entries such as “called,” “visited” and “presentation given” matter. But on their own they do not explain where the customer is in their buying process.
After a product presentation, for example, the customer may start a technical evaluation. At the end of the same presentation, it may also become clear that the need has been pushed to next year. The activity is the same, but the two opportunities are in different situations. That is why a stage definition needs to state what we know about the customer at that point:
- Have the need and the scope become clear?
- Is technical fit being evaluated?
- Is the proposal being handled within the customer’s buying process?
- Has a concrete discussion of commercial terms begun?
The answers to these questions say more than the stage names do.
Write exit criteria in terms of observable information
Phrases such as “high interest” or “the rep feels positive” vary from person to person. An exit criterion should be clear enough that another team member can understand it just by looking at the record.
The table below is a starting example for a technical B2B sale. Not every company needs to use every stage.
| Stage | What we know at this stage | Criterion for moving to the next stage |
|---|---|---|
| Clarifying the need | The customer has stated a need or a problem. | The intended use, the basic scope and the people involved in the evaluation are clear. |
| Evaluating the solution | The customer is reviewing whether the proposed solution fits. | Enough scope has been confirmed to prepare a proposal; any critical technical questions have been answered. |
| Evaluating the proposal | The proposal has reached the customer and the evaluation process has been discussed. | The customer has given concrete feedback on price, scope, delivery or payment terms. |
| Commercial discussion | Specific terms of the proposal are being discussed by both sides. | Open commercial issues are resolved; the remaining approval or order steps are confirmed. |
| Awaiting order / contract | There is commercial agreement; the formal process is being completed. | A valid order or contract document, as defined by the company, has been received. |
A customer may complete several steps in a single conversation. In that case there is no need to hold the opportunity in every stage just to keep the sequence. What matters is that the information supporting the move is there.
Example: where should the opportunity be once the proposal is sent?
Take a representative example: a manufacturer is considering replacing a piece of equipment on its packaging line. The supplier has discussed the need, prepared the technical scope and sent its proposal.
The customer saying “We received the proposal, thank you” does not mean commercial discussion has begun. At this point you need to find out who will evaluate the proposal, against which criteria and when.
If a week later the customer says, “The capacity looks right. Installation has to happen over a weekend, and let’s discuss the payment plan,” new information exists. There is feedback on technical fit, and delivery and payment terms are open for discussion.
The opportunity can now move to the commercial discussion stage. Rather than just changing the stage, the record should also capture the conditions the customer stated and the next step that was agreed.
If instead the customer says the investment has been postponed, moving the opportunity forward would be wrong. The reason for the delay, when it will be reassessed and whether it stays in the active pipeline should be addressed.
Which fields does the CRM need?
Adding lots of mandatory fields to every stage does not improve record quality by itself. The team may start filling in information it has not yet learned by guessing. To begin with, making the following information visible is a sufficient foundation:
- The need the customer is trying to solve.
- The customer feedback that supports the stage change.
- The people involved in the decision and the known evaluation steps.
- The next step, its owner and its date.
- The open issue standing in the way of progress.
If information has not been obtained yet, it is valuable for that to be visible. A note saying “budget approval process unknown” can be more useful than a date filled in on assumption; it shows what needs to be learned in the next conversation.
Test the new structure on real opportunities
Before rolling the stage definitions out to the whole team, review a few existing opportunities together. If two people place the same opportunity in different stages, talk through their reasoning. Sometimes the difference comes from a missing record, sometimes from a definition that is open to interpretation. This exercise makes sure the process is understood before the CRM screen changes. A short checklist might look like this:
- Does every stage have a clear meaning?
- Can the information supporting the move be found in the record?
- Has the next step been discussed with the customer?
- Can pending or postponed deals be told apart?
- Does the team assess the same example in a similar way?
It is normal for the definitions to be revised in the first rollout. Different customer groups and ways of buying in particular can surface needs nobody thought of at the start.
Well-defined stages reduce the need to retell every opportunity’s story from the beginning in the sales meeting. The team can spend its time on the open issues, the support needed and the customer’s next step.
At Eidos Growth, in our CRM and sales system work we treat opportunity stages together with how the team works and how the customer buys. The goal is a structure the team shares an understanding of and can use in day-to-day sales management.