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Sales Stages: Funnel, Opportunity, Deal or Pipeline

The following is an excerpt from: James Obermayer, Managing Sales Leads: Turning Cold Prospects Into Hot Customers, (Mason, Ohio, Textere an imprint of Thomson/South-Western, 2007) and Racom Books, Page 111

Sales Stages: Funnel, Opportunity, Deal, or Pipeline


Once the lead is sent to the salesperson, it begins to go through a filtering process that will either kill it as a prospect or advance it to the next level of the pipeline. These stages can be just a few or a dozen or more. Every company and its products are different. The basic stages are here, but others can be added.

Sales Lead, aka Sales-Ready Lead. This is truly a qualified inquiry. They have an immediate need, a budget, a projected time frame for purchase, and usually a few other "custom" thresholds that have been reached so that it is a genuine sales lead.

Discovery. Many inquiries never get past the discovery stage. This is where the people and the companies decide if they want to work together and if the products fit the need. Discovery happens during the first few meetings, where the prospect and the seller size each other up and get the problems fully fleshed out. This is where the chemistry so vital to any successful sale must happen; otherwise, the future deal dies here.

Validation. At this stage the proof of concept begins to assert itself. Whether it is through a demonstration, free trial, free sample, Web seminar, reference checks, etc., validation is the stage where someone has to finally say, "Yep, I think this will work the way we need it to."

Working Opportunity. Just what it says, this lead is being worked by the sales representatives and has an opportunity to become a sale or to at least move to the next sales stage. An opportunity is most often those names that are transferred into the sales rep's contact system (SFA). These are the leads that appear in the salesperson's forecast. Not every lead that knocks on your door is worthy of making it to the forecast; probably, at best, 50%. The huge mistake many companies make is dumping all inquiries into the SFA system and then trying to manage the database, which is bloated with all sorts of irrelevant names and information, at the salesperson's level.

Proposal. Whether it is a quote or a proposal, 1 page or 50 pages, somewhere in the process a number will have to be given to the buyer. Every company should know the closing ratio of its proposals. Once that proposal is laid on the prospect's desk you should know within a barrow percentage what your chances are.

Negotiation/Sale Pending. Maybe we're slicing this too thinly, but some companies know that the negotiation stage can take time. Once in this area the outcome is reasonably predictable. Unless the salesperson has not done his homework or the two companies have not properly identified any serious outstanding issues, the outcome should not be in question; only the final value and terms and conditions are being discussed.


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