When we were in Business School, our professors used to give us projects to test our entrepreneur spirits. I remember, during one such project, we were required to form groups and come up with a business plan. One of my classmates came with an amazing idea, but when asked how he will execute it and how he will encourage his leads to become prospects, he replied, “I’ll just wing it.” My professor was not pleased. And, that’s how he lectured us on how ideas are worth nothing, and it is the execution that always matters (paraphrasing Steve Jobs). But what has this got to do with lead stages? Let me tell you.
Your business idea, like my classmate’s, might be the next big thing. But, again, before you put it into action, you need to define your sales funnel and the various stages at the very beginning. You need to track the leads as they pass from one stage to another. This article is going to be all about the different lead stages and how you can define them for your own business.
What is a Lead Stage?
Leads that come into your system will have varying levels of readiness to purchase your product. Some of them might be desperately in need of what you sell and hence they might convert faster, others may need prolonged nurturing to convert into a customer. In simple terms, the position of your lead in your sales funnel based on their engagement levels and propensity to buy is called a lead stage.
As I said before, defining lead stages only help you to plan how your sales process is going to be like and the steps that you need to follow to push the leads to convert.
Defining Lead Stages
To define lead stages for your business, you should first understand how your business works. The lead stages for, say a B2B and a B2C business tends to be different. For example, in an online based fitness business, the goal would be to get the leads to subscribe to their business. But, in a B2B business, the decision makers involved are more and it might not follow the same process.
However, we can all agree that there is some basic framework that is common for all businesses. There are six lead stages that we can all agree upon.
- Custom stages
Let’s see what each stage means and how you can optimize these stages for your business. For the sake of clarity, let me take the example of a business that sells fitness plans online.
This is the very first lead stage of any sales process. This is the time when your audience is first introduced to your business. They could have come across you thanks to your marketing efforts. Say, you ran a Facebook campaign targeting young earning professionals within the age group ’24-35′. A visitor, Hareesh, happens to see your ad and clicks on it. He gets redirected to a webpage offering discounts. He glances through but doesn’t do much.
However, he happens to see a widget asking for his contact details in exchange for a newsletter subscription. On a whim, he decides to subscribe. Now, Hareesh has officially become your ‘contact’.
Yes, Hareesh has voluntarily given up his contact details, but he is not yet a lead. He has not yet taken any action that suggests that he might be interested in buying from you. So, you start sending him informational articles on how following a proper fitness regimen can work wonders for his health.
He opens some emails, he ignores others. But, slowly his click rates improve and he starts to interact with your emails and starts visiting your website more often. Finally, he downloads your app as well. Now, Hareesh is actively interested in what you have to offer. He has become your lead.
Hareesh has started to actively use your app, browsing through everything you have to offer. You now know that he is interested, so you slowly start pushing him to purchase. Let’s say, you are offering him a free trial of a gym close to him, or a free diet consultation with your nutritionist. With each activity, his lead quality score increases and his propensity to convert also increases simultaneously.
Again, you start nurturing him, slowly but steadily, to sign up for either a consultation call or to take a gym trial through text messages, or emails or even through push notifications. Finally, he signs up for a free nutrition consultation. Yay! Now Hareesh has become a prospect.
But, just because Hareesh agreed to take a free consultation call does not mean that he is ready to buy. There is still a high chance that he may change his mind. However, the fact that he took the free consultation means that he is having second thoughts about his current lifestyle and is looking for ways to make a healthier change.
He is now an opportunity for you. You need to ensure that his call goes well and offer him enough incentive over the call as to why buying a fitness package from you would be the best thing he can do to take the first step towards a healthy lifestyle. If you can convince him, then he will move on to the next lead stage.
In this case, the next stage would be an evaluating phase where he can take the subscription for 7 days to see how it works for him, before making a long term purchase. You can name this stage as ‘Trial phase’. So, Hareesh, may or may not buy after his trial is over.
For other businesses, they can have one or more stages at this point depending on their use cases. This will differ for each business.
After all your efforts in nurturing and educating Hareesh, he finally decides to buy from you. Usually, this is the final stage for most businesses, because he has finally decided to buy from you and that was the whole point after all. But, most businesses don’t stop there. Maybe you sell fitness apparel, you can start giving Hareesh discount codes to start wearing more stylish workout clothes. You also need to be handy to ensure that you always provide him with constant support when he needs it. This will help in long term customer retention.
But, not always do businesses get a dream customer like Hareesh. Sometimes, your leads may have a change of heart at the very end of the funnel. Or your competitor may have won him over. In this case, the next stage for the lead is ‘Lost’.
I hope the above example clearly illustrated exactly how you can set up various lead stages. Though the use cases can differ, the main framework will always remain the same. Planning and setting up these lead stages within your CRM will help you to visualize and build your sales funnel better. Ultimately, this translates to deeper insights on how well your sales process is performing and how you can optimize it better.
Looking for a CRM that helps you set up lead stages and track them better? Why don’t you give LeadSquared a try?