lead stage conversion

Defining Lead Stages and Conversion Funnel

If you didn’t completely identify with the standard sales funnel, that’s understandable. The model was designed around B2B sales models involving long a long sales cycle and a dedicated sales team. That’s not the case with small companies or e-commerce.

For example, here’s the typical path of a sale at my wife’s company, Wolfgang Career Coaching:

    lead stage conversion

  • a person finds our website and submits a form or places a phone call
  • the person schedules a free, initial consultation
  • the person signs up for service or doesn’t

There are only 3 stages from the traditional model that apply:

  • marketing qualified leads – those who contacted us
  • qualified opportunity – if they had a free initial consultation
  • closed won/lost – did they begin services

Even though we didn’t use all of the stages, we still stuck with the standard model. I believe in keeping with a standard model because you need a framework that everyone understands and remains consistent even when your lead flow or sales steps change.

Transactional Sales Model Conversion

Let’s look at a final relevant example: a transactional sales model with a short sales cycle, low average transaction price and no dedicated outbound sales force. This is the case for many online businesses, retail stores and service companies.

Here you may want to align your stages with your conversion points – required actions in order to become a client. For example, a person first needs to create an account on your site; afterwards choose a service and enter credit card information. Maybe you offer a free trial and many people cancel their account just before the trial is over. These conversion points should drive your stages and conversion funnel. Here you would use different names such as “registered”, “trial member”, “canceled/active” and so on.

How Do You Choose Your Lead Stages?

Hopefully you are getting some ideas? If not, list out the steps a typical customer goes through from start to finish. Do you have a lot of stages but wonder which ones are significant enough to identify as a stage? Here’s some criteria to help you determine if a step in the sales cycle should be considered a “stage”:

  • When you know enough about an inquiry to tell if they fit the profile of a customer. (e.g. a student who downloads your content for research.)
  • If a certain amount of time passes, and the person should move back a stage?
  • When a different department at your company takes ownership of trying to convert a person to the next stage.
  • If you perform different actions at a particular point. (e.g. send a “welcome” email.)
  • When you are aware of a specific product/service and quantity the person is interested in
  • When actions by the person increase the probability of closing the sale

Again, use the criteria above and consider how you would like to report on the health of your demand generation – that should also be a driver in determining your stages.


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