If the sales funnel is the heart of lead generation, then defining the stages of the sales funnel is critical to a good healthy heart. While some (it should be all) organizations have embraced the concept of the sales funnel, the stages selected and what makes a lead be in a certain stage vary widely. In an ideal world, there would be a common definition that all marketing and sales organizations could just implement much like development organizations implement standard protocols. But we know this is not an ideal world. In fact, many of us know that these standards take forever to define so you can only imagine how long it would take to get the sales funnel defined in a standards body since in many cases marketing and sales in ONE organization can't agree.
This last point is what absolutely needs to be fixed if any lead generation program, and for that matter any organization, is to be successful. Sales and marketing must agree on the stages of the funnel, what defines each stage and use the same terminology across the entire funnel. This is definitely a tall order and if you're in the midst of defining these stages I feel for you. However, I can't stress enough how critical it is for each stage to be clearly named and defined and then have each lead be ranked with this criteria in mind. If this doesn't happen at the outset, and I've seen it many times, marketing and sales will become increasingly frustrated and always point the finger at each other about why the lead generation programs aren't successful.
I really wish I could post a clear definition for all the stages of the funnel but the reality is that it varies for each organization and type of sale. It is clear that the prospects that marketing identifies by collecting information about them are the first stage of the funnel. While some would dismiss this stage as not important since theses leads are not sales-ready leads, it is still crucial to define this stage in terms of the criteria that needs to be collected since these prospects will be the sales-ready leads in the future.
To define the other stages, I propose that marketing listen carefully to sales and ask them to outline what they see as an ideal account. Then take as many of these attributes as possible and use that critieria as the basis for the next stage in the funnel which I normally refer to as A leads. Another set of key criteria involves BANT (budget, authority, need, timeframe), and while it's not always easy to collect, it definitely needs to be a key part of the next stage which is what I call qualified leads, or sales-ready leads. The next couple of stages really depend on the target audience, the technical nature of the product and the sales process involved in closing deals. Quite often these are called technical closure and business negotiation, but may go by many names, and may also involved some business case closure or trial stages as well.
In the end, and I've said it many times, the number and name of the stages are not what's important. What is important is that marketing and sales agree on ALL of it and also what it takes to move a lead from one stage to the next. While funnels will vary between different industries and organization, it must NOT vary within the organization.