How do you close out prospects, leads, and opportunities that engage with your business? The short answer is that every deal should not be boiled down to a simple win or loss label.

First, you can get five important pieces of information out of the closing status every lead, or prospective customer that your organization interacts with:

  1. Whether the sale closed or not. This is the primary responsibility of the sales and marketing teams. Everything depends on our ability to bring in deals to support the business.
  2. Whether there is a future opportunity or not. This includes if the sale did not close but there may be an opportunity in the future, or if there may be an opportunity to further serve this customer.
  3. How effectively the lead was qualified. Regardless of how the lead was generated, there will always be a percentage of disqualified leads. We want this to go down over time.
  4. How effective the sales rep is. When adding multiple sales reps to the team, eventually there will be performance discrepancies that emerge between members of the team.
  5. Why the customer chose another product. Sales captures critical insight into feature, price, and other differences versus competitors. For the sales team, share this information then forget it.

With all this in mind, I recommend five closing statuses for the leads in your CRM software (or spreadsheet, if you don’t have a CRM in-place yet).

  • Won: We won the deal and it is the most important thing that the sales and marketing teams should be focused on. If there is a future opportunity, whoever closed the deal should pass that information to the account manager, inside sales team, or in a small operation just find a way to make a note of the future deal potential.
  • Lost: We lost the deal and expended some meaningful amount of time engaging with this customer. The lead was appropriately qualified and we had relevant and timely conversations with them. They chose another product or didn’t choose ours. There should not be many leads that end up falling into this category.
  • Recycle: This is where the majority of leads are going to fall. Since the overwhelming majority of prospective customers have latent needs for the solution we offer, they probably are not ready to buy from us yet. Recycle means that we need to revisit in some future time, after having several qualifying conversations.
  • Disqualified: This should be a small but important number to watch. Disqualified leads are not a fit for our solutions. This is not a function of their readiness to buy. In other words, they do not need what we are offering at all today or at any point in the future. This reflects the quality of our lead generation efforts.
  • Dead: This should represent a small number of our total leads. These are businesses that are out of business, the number doesn’t work, emails bounce back, we get returned direct mail, etc. If this becomes a meaningful percentage of your leads, there is some serious problem happening with however your leads are being generated.

Having the right states in your CRM (or spreadsheet) is an important step but just part of the journey in scaling your sales and marketing operations. From standardizing processes and using performance frameworks like Objectives and Key Results (OKRs) to reporting and analytics, there’s a lot more to consider.

2 Comments

  1. Great timing for this post. I’m just setting up my CRM and have been wrestling with how to categorize lead statuses. This is a super helpful roadmap.

    1. Glad you found it helpful Mark, thanks for the feedback and good luck with the new system! Having these stages defined now will lay the foundation for reporting later (that you may not need for the time-being.)

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