Lead Stages: What, Why & How?
Ideas, no matter how groundbreaking they might be, have little value at all unless executed. On the other hand, one might say that ideas act as a multiplier. It is the execution that adds immeasurable value to ideas, and therefore it is the execution that is worth a million bucks.
This mantra, in business, can be followed like the Pole Star. But if you are wondering how this is related to the sales lead stages, hold that thought.
Your business idea might be worth a million dollars- but it is the execution that translates the value of your idea. So before you go ahead and call your idea into action, you need to carefully define your sales pipeline and the various lead lifecycle stages in it.
And that’s not it. You also need to follow your leads throughout their sales funnel stages or lead funnel stages, as they pass from one step to another. Read on to find out more about lead stages., and how this analysis can actually benefit your business.
Let us begin with how a customer need is created in the first place.
How is customer needs created?
It starts with a business goal or an economic goal, which take priority in their life. An example would make it easier to understand. Let us suppose that a company wants to work towards increasing the lead to conversion ratio. This company feels that they are investing a lot of money in the advertisements and generating lot many web enquiries. But actual closure or conversion to revenue is only 10%. The company wants to increase it to 20%.
So the first event that happens in the customers’ mind is
- Prioritizing increasing the lead to conversion ratio as a key initiative.
Now the company brainstorms through the plans to increase the conversion ratio substantially. Ideally, they have three plans to choose from:
- Train the sales team
- Make the landing page more detailed to get fewer but better leads.
- Improve the productivity of the sales rep by implementing lead management software.
Sifting through the dangers and benefits of each plan, the company will be able to choose a more effective strategy. The team would usually discuss the pros and cons of each plan and its repercussions on the company sales. For example, reducing the lead flow as in scenario (b) might not be an excellent idea. Instead, the company can implement lead nurturing to engage the leads more. This will keep the lead flow steady, and the ones who do not convert instantly can be pursued to convert later.
- Thus, the company decides on the plan (c), i.e. to improve sales productivity by implementing lead management software.
- There is no singular correct way for lead management and analysis. Hence, now is the time when the team analyzes the challenges that their chosen plan might pose. The challenges associated with the implementation of the mentioned plan in this case are:
- Does the company have the necessary budget for a plan (c)?
- Do they have access to adequate resources?
- Which software vendors are available, and who are they?
- Will the gap between the software functionality and vendor capabilities hurt the plan?
After extensively going through these questions, the company authorities did three activities.
The company :
- Evaluates the service providers
- Run the demo and proposal
- Decides to Run a trial with two service providers.
Finally, the date by which the prospective buyer has decided to achieve the goal of increasing the lead to closure ratio to 20% is set. The company then compiles an ROI analysis, negotiates its contents, and starts off.
This sequence of steps that a Buyer goes through before purchasing a product is often called Buyer Journey.
Let me write down the steps that the buyer went through in the above example:
- Prioritizing increasing lead to closure ratio.
- Researches the options.
- Evaluates the service providers.
- Runs a demo & proposal.
- Runs a Pilot.
- ROI calculation of investment.
The above flow of events is called the Buyer Journey. The Buyer Journey represents the sequence of steps through which the customer progresses as he/she purchases a product.
Why is the Buyer Journey important?
It is imperative to engage customers constantly at each stage to help move them along the journey, from the stages of initial awareness to making a purchase. The needs of a customer evolve as they move through the buyer’s journey. But how do you attract new customers while building trust and credibility to maintain a long term relationship? You need effective content that can be used throughout the buying process. For this, you need to understand the stages that the customer goes through while buying a product or service. This is where the buyer journey plays a huge role. Let us delve into this further with a few questions.
Is it possible we could do everything possible that we are supposed to do in our sales process perfectly- and still not make a sale?
Of course, it is.
To develop a deeper understanding of this subject, let me ask you another question:
If the potential buyer did all of the things that they were supposed to do to buy; but we as salespersons missed one or two steps- could we still book the deal?
Surely, we can.
Hence, the buyer journey is essential.
What are the lead stages?
There are number of definitions of Lead Stages. Every sales manager or an organisation has its own way to define the lead stages. However, we will like here to present the lead stages that Imaginesales team has found to be useful. These are the lead stages in crm that we recommend.
Knowing these sales stages will help to increase sales funnel. It can also be defined as sales pipeline stages.
Leadsquared another competitor of ours has its own way to describing lead stages. We don’t agree to their opinion.
As the lead moves from being just contacted to becoming a legitimate customer, it moves across several intermediate stages. Let us understand what each intermediate stage entails.
- Open to Talk.
This is the very first stage. Is the potential suspect open to talk to you?
- Problem Aware
This is where the potential buyer has been thinking of a problem. Like in the above example it was poor lead to closure ratio. The owner identified that marketing money is going waste because too few leads are converting. If we can increase the conversion that will be great ROI.
- Solution Aware.
This is the stage wherein the potential buyer enlists out the possible ways he can do so. Either to train the sales rep or increase the number of fields in landing page or implement a lead management software.
- Product Aware
This is the stage where in they are aware of the names of quite a few service providers. They have been talking to them. They know quite a bit features of the competition.
- Most Aware.
It is a stage where in they have used the trial or demo version of a particular service provider. They know quiet a lot of features and flow about the software. They is a stage often called as most aware.
How does defining lead stages help businesses?
The first step towards defining lead stages is to understand the functionality of your business. For example, the stages of lead a B2B business tend to be very different from a B2C business. Leads may be at varying levels of engagement with your offers, depending on their awareness, interest, budget, and requirements. You can group your leads into various stages based on the levels of their engagement or their similarities and disparities. The advantage of this is that you can now customize your strategies of lead engagement and offers for each stage.
The Lead Stages are imperative to a successful lead to customer conversion. And as mentioned above, there are a few ways to go about them. A thorough understanding of the buyer’s journey will help you make an informed decision regarding your lead conversion strategies. Once you can decipher your leads and their respective sales lead stages, you can plan in more detail and create customized offers for your target lead groups. Not only does it increase the efficiency of your offers but also boosts the lead conversion rates.
As Steve Jobs wonderfully quoted, “groundbreaking ideas mean little unless they are executed”; and execution can be successful only if it is accurately targeted. Thus, Lead Stages will help you to make more informed marketing and sales decisions, and visualize and build your sales funnel better. Though the cases can differ from brand to brand, the basic framework will remain pretty much the same. All of this analysis translates into deeper insights on the performance of your sales, guiding you on how to optimize it further.