Google “common salesforce stage names.” You’ll find a bunch of articles that outline the basic sales process. Depending on the assumed annual contract value (ACV) of the article, you’ll typically see a list that looks something like this. The lower the ACV, the fewer items in the list.
Prospect
Marketing lead
Marketing qualified lead
Sales accepted lead
Sales qualified lead
Opportunity
Discovery
Online Demo
Onsite Demo
Negotiations
Proposal
Legal/Procurement
Closed Won
Closed Lost
This stage naming convention is not useful. It tells the selling organization very little about where the customer is in the buying process. The are a few problems:
1) These stage names are a series of actions the account executive (AE) has done with/to the customer. More importantly, these stage names do not reflect where the buyer is in their decision making process. If a deal is listed in Discovery, the selling organization knows the deal is still early in the sales cycle, but that’s about it. “Discovery” doesn’t indicate anything about the customer. These stage names do not highlight the problems the customer is facing in making a decision.
2) The more complex the sale, the less linear it is. This naming scheme attempts to force a non-linear sales process into a linear progression.
3) There is no consistency in the naming. In English class, we were taught that lists need to be consistent. A list of 6 items shouldn’t include 3 verbs, 2 adjectives, and a noun. This isn’t about being grammatically correct, but rather highlights that there is in fact something wrong with this naming convention.
The Right Approach
It’s called the Enterprise Integrated Sales Process (EISS). Full disclosure: I was taught the bulk of this by my good friend and mentor, Jim Banks of ShadeTree Technology. Although it’s designed for larger ACV sales, the frame of reference is usable for lower ACV opportunities. The stages are:
1) Awareness
2) Recognition
3) Determination
4) Justification
5) Acceptance
I’ll walk through these in reverse order because the key to the sales process is to reverse-engineer the deal from the end to the beginning.
Acceptance — an opportunity moves into Acceptance once every requirement from every stakeholder in the buying organization has been addressed. This includes legal and procurement. If all redlining has been finished, IT has approved security requirements, budgets have been allocated and approved, fee schedules set, use cases validated, and workflows understood, then the only remaining step is to initial paperwork.
In many organizations large and small just getting the signature can take days. Those few days are the Acceptance stage. By moving an opportunity to Acceptance, the AE is signaling to her company that every obstacle has been overcome. Nothing that was foreseeable can stop the deal now.
There are instances where procurement organizations will lie to the AE and a deal will move back to Justification from Acceptance. This should only happen when truly every foreseeable requirement was fulfilled, and then out of nowhere, something comes up at the end. “[Competitor] just offered us a price that’s 25% less than yours. If you don’t match it, no deal.” It’s unfortunate, but many procurement organizations are designed to do exactly this to vendors.
Justification — this is typically the longest stage of the sales cycle. An opportunity graduates from Justification into Acceptance when every foreseeable requirement for every stakeholder has been fulfilled. An opportunity moves into Justification from Determination when all of the requirements to close a deal are known. Thus, to move to Justification, an AE needs to understand the requirements of:
Approver — the person who literally signs the check. This is typically a procurement person, or in some cases, the VP whose budget is paying for the solution.
Decision Maker — typically the VP whose budget is paying for the solution. The DM and Approver can be the same person, although this is uncommon.
Recommender — these are people the VP looks to in assessing the solution. These can be Directors, or they can be SMEs. There may be a few Recommenders in a deal.
Influencer — like Recommenders, but they have less clout with the DM. This can include business analysts who help build business cases, or lower ranking SMEs who sit in on demos. There can be more than dozen Influencers.
IT — Although you could categorize IT as an Influencer or Recommender, they are an organization that almost always has its own unique of set of technical challenges that other Influencers and Recommenders don’t. As such, IT warrants its own role and in SalesForce. Note: if you’re selling into IT organizations, this this doesn’t make as much sense as most of the stakeholders are by definition in IT.
Legal — again, a functional group that AEs always have to deal with. Make sure that AEs know who these people are and what they want in a deal.
Procurement — again, a functional group that AEs always have to deal with. Make sure to know who these people are and what they want to see in a deal.
Each stakeholder in the buying organization has her own thoughts and views of the solution they’ve been asked to evaluate. Very few of them will directly shares their views with the AE. But most of them will share their opinions of the seller’s solution if the AE asks. The imperative of the Justification stage is to ensure that no one in the buying organization has any reason to object to the seller. NONE. If anyone has a reason to object, the deal is likely lost.
In order to fulfill everyone’s requirements, AEs first have to figure out what people want.
Determination — this stage is all about diagnosing. The AE has to 1) figure out who all of the stakeholders are, and 2) what their requirements are. This is an explicitly divergent problem, whereas Justification is a convergent problem.
“Here are the 12 people you’ll need to engage with. John makes the decisions around here. He needs to see a 25% ROIC and 12 month payback period to do a deal. He will rely on Sally and Bob’s judgement about the real value you can deliver. John will work with Jim and Jane on building a business case. And he’ll turn to Janet in legal, Nancy in procurement, and Dylan in IT to get their blessing. Here’s everyone’s contact info. Oh, and Nancy will be the one that signs the check. I know you care about that.”
That has never been said in the history of sales. AEs have to uncover all of that information and more.
During this stage, AEs need to rely on their Champion inside the buying organization to navigate. The Champion will be involved in Justification too, but the bulk of the work the Champion will do be in Determination.
Recognition — A deal exits Recognition when the AE has asked her primary point of contact these 2 questions:
1) “Will you be my champion? That is, will you help me navigate your organization and understand the pitfalls and processes that we’ll need to work through together?”
2) “If it’s not going to work out, will you be the first to tell me so that we don’t both waste our time?”
When the champion has agreed to those criteria, a deal moves to Determination. Recognition is about selling one person. The remainder of the sales cycle after Recognition is about selling the rest of the organization.
The most common reason deals fail in Recognition is when the contact in the buying organization says “let me get my colleague involved for a demo” before the two questions above have been asked. This almost always results in failure. Why? Because that statement implies that AE’s current contact isn’t Champion material. Champions by definition need conviction in the solution they’re bringing into the organization. Without conviction, there’s no Champion. Without a champion, there’s no deal.
Most contacts that a sales organization is talking to at the Recognition stage have never championed a project through before. They rarely understand how their organization buys solutions, or even that champions need to exist to shepherd deals. This is why question #1 above is so important.
Question #2 is just as important. This will be the first time that anyone from the sales organization expresses vulnerability to the buying organization. This is a crucial moment of trust-building. It also creates a commitment from the champion to be honest with the AE.
Awareness — Awareness means that at least one person from one side of a transaction is aware of and interested in the other company. For inbound leads, Awareness translates to unqualified marketing leads. For outbound sales efforts, Awareness-stage deals are all untouched, qualified prospects. A deal moves to Recognition when one individual from each side of the deal has expressed interest in the other. At this point, the sales organization has to convince this person to be the champion.
Note: most sales organizations will transition account ownership from an SDR to an AE when a deal moves from Awareness to Recognition, or after the 1st or 2nd conversation in Recognition.
The Power of EISS
So why is the EISS naming-scheme so much better than traditional naming conventions? Because these stages tell all parties inside the selling organization what’s going on in the deal. For example, is it more useful for a CEO or CFO to see “Demo” or “Determination” as the stage for a given deal?
“Demo” is a meaningless term. Demos can happen in Recognition, Determination, and Justification. But Determination means that there’s a champion, and that the AE is trying to figure out who else needs to be involved. With that information, the CEO/CFO can ask hard questions such as “What is the background of the SME/Recommender on this deal? Has she led prior technology implementations that impacted this population of employees?”
Another example. If an AE has listed as a deal as “Negotiation,” the natural inclination is to ask about the terms that are currently being negotiated. But this is the wrong first question about any negotiation: “Have we (the selling organization) diagnosed every issue and requirement possible, and fulfilled the key requirements to ensure that the customer realizes the potential value of our solution?” If an AE lists a deal as “Determination” but begins talking about pricing, that’s a red flag. How could the customer possibly be willing to pay the maximum possible price if the customer doesn’t yet know what the real value of the solution is?
One of the most challenging aspects of sales is to orient EVERYTHING through the lens of the customer. This post just touched on one component of view: stage naming. Terms like “Demo” and “Negotiation” are actions that the sales organization does with the buyer. But those actions don’t represent where the buyer is in their buying process. The EISS provides the framework that sales organizations should use to map all actions and descriptors through the eyes of the customer.