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Video: Why You Should Customize Your Deal Stages (1:55)

In this video, you'll learn the importance of customizing the deal stages inside HubSpot CRM to match your sales process.

Hey, it’s Kyle from HubSpot Academy. Let’s talk about deals and deal stages. Deals inside of HubSpot CRM represent potential sales, and the deal stages they move through represent the steps of your sales process.

It’s important to remember that deals represent the sales themselves, not the people or organizations involved in those sales. While your reps are making initial contact with their prospects, all of the information they gather and the conversations they have should be stored in contact and company records. A deal should only be created when there’s a real chance that money is going to change hands. The deal stages then help you keep track of how soon that transaction is likely to occur.

So, question: have you customized the deal stages inside your CRM?

The CRM comes with a set of default deal stages, but every sales process is different, so if you’re using those default stages, chances are they don’t exactly align with your current process.

Think about it this way: Does each deal stage mean the same thing to everyone on your team? Do your sales reps always know when to move a deal from one stage to the next? Do you know how likely a deal is to close based on the stage it’s in?

If the answer to any of these questions is “No,” you’re losing money. If your team isn’t completely aligned on what your deal stages mean and how to use them, I can guarantee you that your pipeline is full of inconsistencies and inefficiencies that are holding you back. And it’ll be almost impossible for you to do any sort of revenue forecasting using a pipeline like that. But if you customize your deal stages and make sure your reps all agree on what they mean, you’ll get a reliable pipeline that can be used to accurately forecast revenue and give you insight into how your reps are performing.

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Video: Defining Your Sales Process (8:51)

Before you can customize the deal stages in HubSpot CRM, you have to understand the steps of your sales process. This video will show you one way to do this.

Hey, it’s Kyle from HubSpot Academy. Let’s talk about how to customize your deal stages to match your sales process. The first step is figuring out what your sales process is. To do this, think about everything that has to happen in order for someone to become your customer. What actions do they have to take? What actions do your reps have to take?

I once had a job selling accounting software to property management companies. If I were to lay out a timeline of what that sales process was like, I’d draw a long horizontal line. Above the line, I’d put the things my team had to do during the sales cycle, and then I’d put the things the buyer had to do down below. It would go something like this:

First, we had to identify a company that looked like it was a good fit for our software. And we didn’t really use any inbound methods, so we spent a lot of time calling people and trying to convince them they had a problem. If we were able to do that, the next step was finding a time to meet. Then we’d have a meeting where we’d show them our product, and they’d get their questions answered. If they decided they were interested, they’d usually say something like, “This looks great, but I’ll have to get the rest of the team to take a look.” So then we’d spend the next several days following up. Eventually they’d have an internal meeting to discuss our offering with their team, and if they decided to move forward we’d schedule another time to meet. Finding a time that was good for everyone was always a pain, and we’d have a lot of back and forth trying to get it scheduled. Finally, we’d get some time on the books and all meet together. During this second meeting, my team would answer everyone’s questions, and we’d discuss the nitty gritty details of price and terms of service and all that fine-print stuff. If they committed to moving forward, that was great, but in many cases they’d have to have another internal meeting to figure out the best path forward--and so, of course, we’d do some more following up. Finally, they’d agree to buy, and we’d send them a contract. Their legal team would take their dear sweet time reviewing it, and we would do a little more following up. And then the happy day at last would come: they’d sign and return the contract and finally become a customer.

That’s a pretty good description of the typical sale for the team I was on. Your sales cycle might be longer or shorter, simpler or more complex, but you can probably lay it out in a similar format, with buyer and seller actions happening in a fairly set order. If you do that, then you’ll have an excellent starting point for figuring out your actual sales process.

To get there, follow these four steps:

First, only include steps that are required. What does that mean? Well, a required step is one that you want your reps to take in every sale, no matter what. These are the steps that your team should never, ever skip--even if the opportunity to do so presents itself.

So looking at the timeline I created, we can remove a lot of stuff. Like pretty much everything that happens before the first meeting. If I had bumped into someone at a conference and they had said, “Hey, Kyle, my company’s looking for new accounting software--can you show me a demo?” I wouldn’t have said, “No no no--first I have to leave you a dozen voicemails and get to know your secretary by name.” No! I would have opened up my laptop and given them a demo right then.

But that demo couldn’t be skipped. If that same person came up to me at a conference and said, “Kyle--here’s money--give me your software now!” I would have said, “Whoa, hey, let’s back up and make sure it actually does what you want it to.” So the demo stays.

But all this following up? I’m going to cross that out everywhere it appears. If we had a highly motivated contact, or if we had been able to automate the follow up process using a tool like Sequences, none of this following up would have had to happen.

I’m also going to remove the first internal meeting because we sometimes worked with very small companies where there was only one decision maker. I’m also going to cross off this second instance of finding a time to meet because, again, if there was only one person we needed to meet with, we could have set up the second meeting at the end of our first meeting.

But this second meeting I’m going to keep. Accounting software is a big purchase, and selling it required at least two meetings--the first to explore the buyer’s needs, and the second to advise them on a path forward. So this meeting stays.

The rest of the process was unavoidable, so let’s keep that, too. For now.

Next, only include steps that are factual and inspectable. A factual step is tied to a specific action rather than being based on a feeling. You don’t want your reps qualifying a lead based on how much they like them--or on how much they feel liked by them. Instead, you want your pipeline based on real actions. Similarly, an inspectable step is one that can be verified by a record inside the CRM. A factual step might be taken, but if you can’t prove that by looking inside the CRM, it doesn’t really count.

So looking back at my process, we’ll keep that first meeting because it’s a factual step and, assuming we remembered to add some notes to our company’s CRM, it would also be inspectable. The same is true for the second meeting. But this internal meeting that the buyer has--that might be factual, but it definitely isn’t inspectable, so I’m crossing it off.

Sending the contract stays because we always sent the contract in an email, and that email should have been recorded in the CRM. We didn’t have HubSpot CRM, so it didn’t get recorded automatically, but we always made a point of putting contract information in our CRM. So that’s factual and inspectable.

But the buyer’s legal team reviewing the contract--again, this is factual, but there’s no way to verify that it actually happened, so we have to cross it off.

And finally, receiving a signed contract is definitely factual and inspectable, so that stays, too.

Next, prioritize buyer actions over seller action. In most cases, you can make the steps in your sales process buyer-focused simply by changing their names a little bit. But this little change can make a huge difference in the way your team operates. Because if you define the sales process around seller steps, then your sales reps think, “This is what I need to do with this buyer.” And the buyer feels like they’re being pulled through something that’s more the seller’s job than their own. But if you reframe the process to be from the buyer’s perspective, then your reps will look at that and think, “This is what I need to help this buyer accomplish,” and the buyers will feel like they’re on the same page.

So looking once again at my process, let’s prioritize the buyer’s actions over my team’s actions. In the first meeting, we’re demoing the product, but the buyer is exploring the product, so we’ll go with Explore Product. In the next meeting, we’re Educating, but the buyer’s Evaluating, so we’ll go with Evaluate. Sending the contract is a necessary step, but it’s a seller action. However, we can fix that by changing it from Send Contract to Receive Contract. If I had been using HubSpot Sales to track my emails, then this would still be an inspectable step because the contact record would show when the contact opened the email with the contract in it. And finally, Sign and Return Contract is already a buyer action, so we’ll keep that as it is.

And now we’ve boiled this long, messy sales process down to four key steps: explore product, team evaluates, receive contract, and sign and return contract. These are the steps I as a seller am trying to help my buyers take.

The final thing we need to do is remove redundancy. When you look at the steps in your sales process, really ask yourself whether any of them are redundant. For example, in my sales process, there are two meetings. Is that redundant? For us, it wasn’t. The sale was large enough that two meetings really were required. For you, that might be different. Similarly, it might seem redundant to have two steps involving the contract, but there’s a big difference between a person who has a contract and hasn’t signed it yet versus a person who hasn’t even received the contract yet. If a person is sitting on a contract, I need to follow up with them, but if they’re waiting to receive the contract, that’s on me.

So this is a pretty good sales process.
Workbook

Worksheet: Identify Common Steps

This short PDF document gives you the tools you need to map out the common steps of your sales process and boil them down to the most essential parts.

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Video: Customizing Your Deal Stages (3:41)

Now that you have your sales process defined, you're ready to customize the deal stages inside HubSpot CRM. This video walks you through the best practices for doing this.

Now let’s talk about how to turn this process into deal stages inside HubSpot CRM.

Here are five best practices to help you make the best deal stages possible:

First, deal stage names should be in the past tense. Deal stages represent the actions that your prospects have already completed. This way, there’s no confusion on what it means for a deal to be in a particular stage. If a deal is in that stage, it means that action has been completed.

So if I convert my four stages into the past tense, I get Product Explored, Product Evaluated, Contract Received, and Contract Signed and Returned.

Next, make sure you have a stage for deals that have been won. This is the end goal that all of your deals should be moving toward. In the case of my process, “Contract Signed and Returned” is it. You can use a descriptive name like this, or you can simply call the stage “Closed - Won.” Go with whatever makes the most sense to your team.

Next, make sure you have a stage for deals that have been lost. Not all of your deals are going to make it to your closed-won stage, so you need a place for the other deals to go. Since this isn’t a standard part of your sales process, you won’t have a stage for this at first, just like I don’t currently have one. So I’ll add one and call it “Closed - Lost.”

Next, add a 0th stage. This is a place for newly created deals to go before the first stage has been completed. Now, a word of caution here: many teams open deals too early. You don’t want to create a stage that will make it open season for deal creation. If you do, you’ll end up with inflated numbers, a bad forecast, and a sloppy pipeline. Even in this first stage, deals ought to represent sales that have a real chance of closing. But it’s also import not to set that bar too high, lest some potential sales get forgotten. It’s a delicate balance.

For my process, I’m going to add an Appointment Scheduled stage because if someone has actually agreed to meet with me, there’s a real chance that they’ll go on to close. This is a good starting point for most sales processes.

The final step is to assign each deal stage a probability of closing. This is used by the CRM to calculate revenue forecasts. If you don’t know for sure what the probability of each stage is, that’s okay. For each one, ask yourself, “How close is this deal to closing?” Is it halfway there? Three quarters? Then assign percentages to each stage based on that. It won’t be perfect, but it’ll give you a good starting point. And you can always adjust these percentages later.

For my process, when an appointment is scheduled, the sale is just getting started, so we’ll say it’s about 10% done. After we’ve explored the product, though, we’re much further along--probably about a third of the way there, so we’ll call this 30%. The tipping point is when the prospect evaluates the product and reaches a decision that they want to move forward--when that happens, we’re definitely more than halfway there, so we’ll call this 70%. And once they have the contract, we are are right at the finish line, so we’ll call that 90%. And then closed deals are already closed, so they don’t get percentages--they’re either won or lost.

And now you know how to design your deal stages inside HubSpot CRM. Creating your deal stages around the principles in this video will ensure that your team is implementing a consistent sales process, and it will enable you to produce accurate forecasts from month to month and quarter to quarter. Happy selling.
Workbook

Worksheet: Name Your Deal Stages

Use this workbook in conjuction with the Identify Common Steps workbook to turn the steps of your sales process into deal stages in HubSpot CRM.

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Video: Deal Stages in Action (2:37)

See how Bob customized the deal stages in HubSpot CRM to match his sales process.

Let’s take a look at how you might customize your deal stages to represent your sales process. We’ll use the fictional example of Bob, a sales rep who works at a landscaping company called Groundskeeper, Inc. He sells landscaping services to small property management companies. Bob just got promoted to sales manager, and wants to make sure his team is implementing a consistent sales process. So he’s customizing the deal stages inside HubSpot CRM to match the way his team sells.

First, Bob lists out the key steps of his team’s sales process. They start by meeting with potential customers to define the project. The goal, here, is to find out which landscaping services they’re interested in. After that, they send a contract, and if the person signs and returns it, the deal is won.

As Bob thinks about the purpose of each of these steps, he realizes that the meeting only matters if the buyer identifies which services they need, so Bob calls this stage Needs Identified. To make it inspectable, Bob creates an an email template that his team can send after having a meeting with someone to confirm which services they want to sign up for. Deals will move to the Needs Identified stage when the person responds affirmatively.

To make Send Contract buyer-centric and past tense, Bob renames it Contract Received. This will be verified with an email-opened notification. The final stage, Contract Signed and Returned, is fine as is.

Next Bob adds a stage for deals that don’t close and an initial stage called Appointment Scheduled. Then he goes into HubSpot CRM and customizes the deal stages. He replaces the default stages with the stages he has created, and he gives each stage a probability:

Appointment Scheduled is Bob’s Stage 0, and there are a lot of people who schedule appointments and then decide not to move forward with Groundskeeper’s services, so Bob assigns this stage a probability of 10%.

Needs Identified is a huge step forward. When people confirm that they need particular services, it’s very likely that they’ll go on to actually buy those services. However, the deal sometimes gets vetoed by other people in the customer’s organization, so deals in this stage aren’t guaranteed to close. So Bob assigns this stage a probability of 70%.

Deals that make it to Contract Received almost always close, so he sets this stage to 90%.

Bob then sets the probabilities for Won and Lost and saves his stages. And now he has a clear and reliable pipeline for his deals to move through.

Rock and roll, Bob!
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Tool Walk-Through: Customizing Deal Stages and Pipelines (1:46)

A brief demonstration of customizing deal stages and pipelines inside HubSpot CRM.

This is the Deals page inside the CRM. These columns represent the different stages in your sales process. As a deal progresses, you can drag and drop it from one column to the next. You can also add filters to view only the deals that meet certain criteria.

If you’d like to be able to see more information on this page about individual deals, you can change from Board View to Table View. Then you can add, remove, and rearrange columns to get the information you need.

In either of these views, you can see an individual deal’s record by clicking on its name.

To change your deal stages, click the Actions button and select Edit Deal Stages. Click on the name of the pipeline you want to edit.

Here, you can add and remove deal stages and drag and drop them into a new order. You can also change their names and probabilities. The probability represents the likelihood that the deal will close by its projected close date, and this information is used in the Deal Forecast on the Sales Dashboard. You can change these probabilities at any time to fine tune the forecast if you find that it needs adjustments. When you’ve finished editing your deal stages, click Save.

If you sell more than one kind of product or work in more than one industry, you can create multiple deal pipelines to keep track of these different sales processes. To create an additional pipeline, click the “Add another pipeline” button. Give the pipeline a name and add stages and probabilities to it. When you’re done, click Save.

Back on the Deals page, you can switch between pipelines using this dropdown here.