Why defining sales stages is really useful
Defining your sales stages isn't just engaging in some tired old pipeline visualization exercise. What you're doing is creating a shared understanding of the ideal sales process. You set up a series of "valves" in the pipeline that one by one lead to a signed deal.

If, for example, your stages are to make first contact, identify the prospect's needs and then send them a quote, you don't want people jumping the gun and sending out quotes before they even know what the prospect needs. You can't jump from stage 1 to stage 3 and expect a good result.

Defining the stages of a sale is defining how you do things in your organization. It saves time and gets everyone in sync. Defining sales stages also helps you set more specific activity goals.

How to establish your sales stages
You can segment your pipeline into whatever stages you want, but to help you along, here are some examples of typical sales stages:

1. Create a lead idea
2. Make initial contact with a potential customer
3. Find out what it is they want or need
4. Make them an offer that meets their needs or wants
5. Offer is accepted and a new customer emerges

Of course, your particular industry and business will influence exactly what stages you create as the segments in your pipeline. Your sales procedures, products or services offered, how your prospects make decisions and other factors all come into play. Just as in plumbing, no single pipeline design fits all situations… thankfully.