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  • Writer's pictureEric Heine

How to Create a Basic Sales Process that Works, Part 3 of 5

5 Fundamentals for Improving Win-Rates and Narrowing the Gap between Forecast and Results.

In the first two parts of this series, we talked about the importance, to companies of every size and stage of growth, of having a unified end-to-end sales process that begins with demand generation, and continues in a coordinated, consistent way through deal pursuits, pipeline management and forecasting, cross-sell / up-sell / renewals, and beyond, and we also explored the notion of defining recommended sales-rep activities for each stage of the sales pipeline.

In this third article in our five-part series, we will continue our exploration of five important fundamentals of a basic sales process (below) that can help your sales performance now, and prepare you for greater sales sophistication down the road, by examining the third component of a sound, basic sales process: Stage Gates.

  1. Define a Common Set of Sales Stages;

  2. Define Typical / Recommended Activities Sales Reps should be doing at each stage;

  3. Define specific, required Stage Gates that must be satisfied for opportunities to advance from one pipeline stage to the next;

  4. Assign Specific Probabilities of Close to each pipeline stage;

  5. Ensure that all stage definitions, activities, gate requirements, and probabilities are consistently and completely communicated, understood, and used throughout the sales organization.

What are Stage Gates, and Why Do we Need Them?

Two of the things I love most in (work-) life are helping companies generate more revenue faster and at higher margins, and building unified sales ecosystems with the end-to-end consistency, traceability, and transparency that enable anyone authorized -- from sales reps and managers, to finance and senior executives or board members -- to easily see and understand what has been sold, and confidently forecast what will be sold and why, and believe strongly in the integrity of the data and evidence behind the numbers. This is especially critical for companies undergoing, or about to undergo, growth-stage transformations of their sales teams and revenue targets.

An essential part of doing that relates to having appropriate controls around how companies define opportunity status, and manage the progression of opportunities from one stage to the next. In the first two parts of this series, we talked about the necessity of simply defining sales stages, and then the desirability of building an activity-level framework within those sales stages, to help flexibly guide sales rep actions and establish consistent expectations of how selling should be conducted across the entire sales team. The third pillar of success derives from how we control the progression of opportunities from one stage to the next, and ensure that all deals are appropriately categorized within the pipeline. That is where the concept of Sales Stage Gates comes in.

Sales Stages have real meaning in helping us understand where deals are in the pipeline. They help us understand what has happened in a sales cycle thus far, which serves as a good proxy for whether a deal is really as far along as a sales rep claims, and, as we will see in the next article in this series, each sales stage will also have an associated probability of close, which is essential to understanding the pipeline value in expected-revenue terms; this also serves as a useful bellwether metric for assessing progress toward individual and team quotas. Therefore, it is critically important that each opportunity be properly designated in the appropriate sales stage.

Sales Stage Gates are the mechanism that keep reps and managers, alike, honest in pipeline reporting and forecasting, by controlling when deals can be advanced from stage to stage. Simply stated, a Stage Gate is a specific criterion that must be met before an opportunity can advance to the next pipeline stage in the sales process.

Examples of stage gates may include such conditions as:

  • For an early stage in the sales cycle: "BANT* qualification criteria have been met, and we know who the economic buyer, decision maker, and approver(s) are."

  • For a mid stage in the sales cycle: "Both our company and the prospect believe that our product or service are uniquely suited to meet the client's business need."

  • For a later stage in the sales cycle: "We have received verbal or written commitment from the prospect indicating they intend to execute contracts with us by a specific date, at the negotiated price."

*Look for more information about BANT and other qualification methods in a future article on this blog.

Stage Gates are so important that there should be universal understanding throughout the entire sales organization and related roles, up and down the entire organizational hierarchy. They are also so important that they should be automated and enforced in the CRM system, to ensure compliance. As you may have read in Part 2 of this series, I favor a degree of process flexibility, so sales process doesn't become sales prevention. But, with respect to Stage Gates, I believe they must be rigidly enforced, as they are truly the gate-keepers that keep our sales pipeline honest.

Our next post in this series will discuss the connection between sales stages, probabilities of close, and forecast accuracy. Thanks for reading!

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About the author

Eric Heine, Founder of Growth Point Solutions LLC, draws upon over 25 years experience in marketing, sales, service, and IT leadership to advise C-level executives and boards of directors of growth-stage companies, as well as growth-equity investors, to help organizations develop, refine, and execute the revenue strategies that power significant, sustainable year-over-year growth.


This content of this blog article is for informational purposes only, and is not intended to constitute professional, legal, or commercial advice. The opinions expressed are solely those of the author. Please read our full legal disclaimer for further details.

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