AMA - Demystifying HubSpot's lifecyle stages, deal stages and lead status

[franksteiner79]

Hi all

I'm Frank Steiner, Principal Inbound Consultant at HubSpot (Germany). I've been with HubSpot since May 2018 and have been a HubSpot fanboy and customer since 2014/15 when I did my first HubSpot implementation whilst working as Marketing Manager for an IT Service Provider in the UK.

Lifecylce stages, lead status & deal stages can be pretty confusing, especially if you're learning about HubSpot for the first time. That's why I'll start with a few definitions first:

Lifecycle Stage: Describes a contact's relationship with your company

Lead Status: Describes sales activities during the qualification process

Deal Stage: Represent steps in  your companies sales process

I came up with this little visualisation, keep in mind I am not a designer! 😉

How lifecycle stages, lead status und deal stages are connected

1. Lifecycle phases

Let's first take a look at the lifecycle phases. These form the foundation for editing and categorizing contacts in HubSpot. The following points should be noted when working with lifecycle phases:

• Lifecycle phases should "increase" incrementally, resetting an LC phase is possible but not recommended.
• HubSpot Lifecycle phases cannot be modified or added to. (*yet…)
• A lot of HubSpot features and standard reports use HubSpot Lifecycle phases, for this reason creating your own custom LC phases should be well considered.

Setting of lifecycle stages in HubSpot

My colleagues and I are often asked which of these phases is automatically set by the system and when:

• Subscriber: Automatically set when a new contact: Manually created*, imported*, filled out a blog subscription form, or created via the conversation tool.
• Lead: Automatically set when a new contact: was converted via a form*, was created via Salesforce Sync, or was created via the HubSpot Sales plugin.
• MQL: Not set automatically by the system, but based on user-defined lead scoring criteria and through workflows.
• SQL: The contact has been qualified by sales (according to BANT model or similar) and the purchase intent has been classified as probable.
• Opportunity & Customer: Can be enabled in Deal Settings in HubSpot, and means: if a contact is associated with a deal, its lifecycle phase is raised to Opportunity. If a deal is later set to Won, the LC phase automatically changes to Customer.*

* Small addition: unless another lifecycle phase was set when manually creating, importing or in the form. Existing customers with which further deals are associated keep their lifecycle phase "customer" and are not reset by this setting.

When is an MQL an MQL and who sets the SQL status?

As soon as a contact has cleared the "hurdle" to becoming an MQL, in the ideal scenario the transfer of the contact to Sales takes place. But often the definition of the MQL already proves to be difficult. From experience I know that this question alone deserves an AMA, and there can and should be many different implementations. In the end, however, an MQL represents a lead that is more likely to become a customer than other leads.

Once we have defined our MQLs and set up lead scoring, we come to the next controversial point - how does an MQL become an SQL and who is responsible?

There is often policy discussion here, in some cases the marketing team defines and sets the SQL status, which I personally find rather questionable. This decision should be left to the sales, inside sales, pre-sales (whatever the team is called in the company). After all, this should ideally be the qualification of the MQLs according to proven models and criteria. BANT (Budget, Authority, Need & Time) is a well-known model here. While much of the marketing activity can be automated, direct and personal interaction via emails, calls, video conferencing is recommended here. And here we move seamlessly into the "Lead Status" topic....

2. Lead status in HubSpot

Is a detailed look at the MQL/SQL lifecycle phases of a contact. The lead status property is predefined, but can be fully customised and changed to meet the unique needs of each sales team and process. Ideally, the lead status represents the typical activities that are performed during the qualification process.

Furthermore, the Lead Status is not set fully automatically via HubSpot's system settings, but either:

Manually by the respective sales staff, or.

Via workflows (e.g. If a contact is associated with a new deal for the first time, then set Lead Status to "Open Deal").

By combining several properties, we are thus able to better segment our database, and in particular our leads, and can for example display contacts whose lifecycle phase is MQL, but whose lead status has not yet been set. These should be qualified by sales as soon as possible.

Assuming a contact has been qualified, we are sure there is potential here to sell our products/services, then we create a deal....

3. Deal Stages & Pipelines

Are a detailed look at the opportunity lifecycle phase and yes depending on the business model a contact can spend several weeks and months in this phase and deal phases help us go into a bit more detail here.

Again, some general info here:

• Deal phases are predefined but can be completely customized.
• The phases are strongly oriented towards the sales process of the respective company, golden rule: Multiple pipelines only make sense if they are also based on strongly divergent sales processes.
• Deal phases can be combined with mandatory fields for deal properties and workflows.

There are 2 options how we can ensure that the necessary deal information is captured and stored in the system during deal creation & during the sales process.

1. System-wide definition of deal properties that are queried during the creation of each deal (no matter in which pipeline).
2. Pipeline and deal phase specific deal properties that are queried when moving a deal to a specific deal phase, these can be optional or mandatory.

Additionally, we are able to associate a variety of automation options with reaching certain deal stages. This is where I am often asked - "What is best practice? What do you need to do?" This is where my standard answer kicks in again - it depends... The more appropriate questions are:

• What are your company's internal processes?
• Are there mandatory and "nice to have" notifications?
• Are there internal approval processes that need to be mapped?
• Do we want to change or set default or custom properties based on where a deal is located?

In the above example, we do the following:

• When deal phase "decision maker brought in" is reached, then create a task for the sales representative: 
• Within 3 days, the first quote should be created.
• We add deal specific info like "Deal Name" & "Deal Stage" in the task title and notes.
• Once set up, this workflow is triggered whenever a deal reaches the "decision maker brought in" stage.

Summary

My top tip after nearly 6 years of HubSpot experience (and especially 3 years as a HubSpot customer) is that the need to have an open discussion between sales & marketing (Buzzword - Sales & Marketing Alignment!) and reach a common understanding of these properties and categorizations are essential. Not only for the successful implementation of HubSpot, but also for better alignment between marketing and sales and the long-term business success.

• If possible, always stick to HubSpot lifecycle phases, and use custom lifecycle phases only in the absolute exception and consider their impact.
• Lifecycle phases should "ramp up" incrementally, and not be reset
• The "Lead Status" property provides a more detailed look at the MQL/SQL LC phase.
• Pipelines & Deal phases are a detailed look at the Opportunity LC phase.
• Golden Formula: Deal Pipelines = Sales Process, only if there are fundamental differences in the sales process do multiple pipelines make sense.
• Deal phases can be combined with mandatory fields for deal properties to ensure good data quality.

Additional resources & reading

• Use lifecycle stages
• What is the default lifecycle stage for newly created contacts in HubSpot?
• Benutzerdefinierte Lifecycle-Phasen erstellen (englischer Community Artikel)
• Install HubSpot Sales for Gmail, Office 365, and Outlook desktop
• Set up score properties to qualify contacts, companies, and deals
• Set up and customize your deal pipelines and deal stages
• HubSpot's default properties for contacts, companies, deals and tickets
• Property Field Types in HubSpot

Now it's your turn!

What questions do you have about lifecycle stages, lead status and deal stages?

What experiences have you already had? Are there any implementation scenarios that puzzle you? Or maybe you've built a "best thing since sliced bread" setup that saves your company time and money?

From October 25-29, I’ll answer your questions about Lifecyle Stages, Deal Stages and Lead Status! I look forward to hearing from you.

Cheers

Frank

[StPatrick]

@franksteiner79  this is GOLD. Thank you!

[hhawk]

Thanks @franksteiner79 

My focus is solving for marketing -- I was wondering if you had an answer to my original question, "When we generate a lead that turns out to be an existing customer, I'm temped to mark them as a customer but worried that might mess-up the reports and analtyics."

While there are benefits to full-funnel full customer lifecycle messaging and communications with further integrations and/or adopting more Hubspot functions. The central issue remains:

When a lead from marketing turns out to be a customer:

• Should I be worried about marking them as such? 

[franksteiner79]

Hi @hhawk 

I assume this is to show marketing impact, i.e. how much interest are we generating from campaign X, how many downloads / signups / etc. are we getting; correct?

Even though you say your focus is on marketing, it seems to me that some work on sales/marketing alignment, tech stack and data quality is needed. But ignoring that for a second, my key advise would be:

1. LC stage is one of many markers/data points and I wouldn't focus too much on it, especially when multiple systems are at work and aren't integrated in real-time.
2. LC stage It should reflect the reality, so if a contact is an existing customer in another system it should be marked as such. The question then becomes how can we ensure that information flows as closely to real-time as possible between various systems.
3. In order to report properly, and considering your setup, I'd move away from reporting on LC stage but rather consider campaign reporting, form submissions reporting at form or portal level, or look into custom reports, i.e. monthly/quartely report of selected forms and their submissions.

To your question - Should I be worried about marking them as such? 

I don't think so, but your current systems setup means that standard LC reports just won't work, which is why I'd look into alternative reporting options mentioned in point 3.

Frank

[franksteiner79]

To your question - Should I be worried about marking them as such? 

I don't think so, but your current systems setup means that standard LC reports just won't work, which is why I'd look into alternative reporting options mentioned in point 3.

[SCustomers]

Hi @franksteiner79  Thank you this is very useful. I understand this approch is comletely for Potential Cutomers. But what happens to LC and LS, if a Customer (Lifecycle Stage = Customer) comes to our page again some months after the first deal was closed, showing interest and/or requesting a quote for a different product or product line which is not related to the first deal? 

[franksteiner79]

Hi @SCustomers 

I answered a similar question earlier.

For me LC shouldn't change. I've bough a few months ago, so I'm still a customer.

Once my first deal closed, LS should either be cleared or set to a value that indicates as much "became a customer" or "deal won".

If I then take any high-intent action in the future that could trigger a number of things:

• A simple lead revisit notification or form submissions notification for the assigned sales rep
• If reps work with filtered views in HubSpot, think about "hand raise views" for reps
• A workflow that sets the LS to "new lead" or another value that makes sense for your processes -> this notifies the rep -> a new deal gets created, either in the same pipeline with deal type set to "existing business" or you might want to consider using a seperate upsell/cross-sell pipeline.

Hope that helps.

Frank

[RHandler]

Frank, the LC (Lifecycle Stage) and LS (Leadstatus) properties exist under both Company and Contact.  

(Meaning there's: LC Company, LS Company, LC Contact and LS Contact)

Where do you suggest we track LC and LS?  Under Company or Contact? Or some combination?

My understanding is that if we're B2B (which we are) then we should track it at the Company level, and if we're B2C at the Contact level.

Can you provide guidance?

Thanks for a well thought out post!  Very timely!

Rich

[franksteiner79]

Morning @RHandler 

Good question. I would always "work up" from contact to company for the LC properties.

Even in a B2B context, you would initially have some sort of interaction with a contact at a company.

As long as you have a good process in place to ensure contacts always get associated with companies, you can then copy the contact values into the company properties. So the focus and work is done at contact level and we then use automation to keep the company LC property up to date.

Although we have a LS property at company level, personally I think it makes more sense to just "maintain" that one at contact level as we normally deal with contacts within companies.

How does that sound?

Cheers

Frank

[RHandler]

Frank, can you point me to a "how-to" for using "automation to keep the company LC property up to date" as you mentioned? 
If you're referring to a Workflow, can you point me to an example (like, inside a video, article, or image)?  

Thanks so much for your super clear reply, Rich

[franksteiner79]

Hi @RHandler 

There isn't a "how to" guide for this, but I've put an example Workflow together for you and will explain why I chose that approach and some key considerations based on HubSpot's features and settings.

Here is the workflow:

Workflow: Contact -> Company Lifecycle Stage Sync

Key Considerations

1. Deal Settings

I would always use the option to "sync lifecycle stages" in the deal settings. This means when a deal is created, HubSpot will change the lifecycle stage of associated contacts and companies to Opportunity. When a deal is won, this changes the lifecycle stage of associated contacts and companies to Customer.

Deal Settings HubSpot: Sync Lifecycle Stages

I'd like to stress the importance of consistently and correctly associating contacts and companies on deals. Too often I see either companies or contacts missing on deals, or a number of contacts missing, especially on complex B2B deals. 

2. HubSpot's handling of LC stages

An important rule in HubSpot is that the tool will not set a LC backwards. The only way to do this is to clear an objects LC stage and then copy in another value. This is good for us as it means we can ignore the case of a company having an LC of "Opportunity" and us trying to copy the "MQL" LC stage of a contact into the company.

Error message: HubSpot not setting LC stage backwards

3. Workflow enrolment - "is known"

Hubspot WF enrolment triggerOur contact workflow enrollment triggers are:

1. The contact has an associated company AND
2. The contacts LC is known AND
3. The associated company (ignore the primary here, my test portal already has access to the flexible associations feature) doesn't have an LC of Opportunity or above as that will be covered by the deal settings in point 1

The "is known" trigger has an often overlooked benefit as it also triggers when a value changes, which in combination with re-enrollment this essentially allows us to monitor and react to changes in values.

4. Workflow action - set property value

I then work my way down from SQL to Subscriber, checking which LC stage a contact has and then setting the corresponding LC stage for the company. 

I did some quick tests and this works as intended. I'd also add that this is one way of doing it.

Another approach would be to "listen out" for specific LC stages at contact level have a WF for each and the trigger the "set property value" action.

Hope that helps.

Frank

[hhawk]

Thanks @franksteiner79,

Our sales team works out of Close and our CS team out of FreshSales... we are not currently sync'ing in any meaningful way.

Campaign(s)
Example: A paid or organic search motion that existing customer completes a form fill. At that point we will check to see if they are an existing customer; if they are my desire is to set Lifecyle to Customer, and Lead Status to sign-up. 

• Esp. w/ Paid efforts setting LC to Customer can have sevearl knock-on impacts
  • Generating conversion events via HubSpot's Event beta
  • Attributing a customer to the campaign

Our only sync'ing
Any close contact w/ an Email is added to HubSpot. Close Contacts who reach Opp. stage the deal size get's pushed to HubSpot. We do track Opp & Closed won deals from Inbound leads -- but not from Upsells or Winbacks.

Why?
Esp. with FreshSales, bringing over additional contacts isn't an expense we are looking to add, plus the complexity of it. 

[franksteiner79]

Thanks for the additional context @hhawk!

What's the thinking/reasoning behind having Close, FreshSales & HubSpot for different teams?

I admit I know very little about the feature set and functionality of the other two tools but would expect HubSpot to be a match on most features.  I work with a number of customer who combine Inbound and Outbound approaches with the HubSpot Marketing and Sales Hubs and use the HubSpot CRM as their source of truth when it comes to customer data.

You mentioned "bringing over additional contacts from FreshSales" is an additional expense. How come? Is that an expense on the FreshSales side? We do seem to have an integration . I've not used it but it looks like getting the two systems integrated is possible and would allow you to sync contacts and companies.

Cheers

Frank

[hhawk]

Frank,

When we generate a lead that turns out to be an existing customer, I'm temped to mark them as a customer but worried that might mess-up the reports and analtyics. 

Background:
I'm generating net new leads and tracking results in HS.

Existing customers are tracked in a different CRM but often we find we get a form fill from a current customer (which would become in upsell lead); something we don't track in HS.

[franksteiner79]

Hi @hhawk 

Can you tell me a bit more about what other CRM you are using. If it's integrated with HubSpot. If so, how. If not, why not. And maybe an example of a campaign where are an existing customer becomes an upsell lead.

Thanks

Frank

[Hesham]

Thanks 🙏 I really appreciate it

[taylorrpayne]

Hey Frank! Really appreciate the insights here.

Let's say a deal becomes lost because through the opportunity process, we learned they were truly unqualified, or ghosted us.

We've been leaving the Lifecycle Stage as Opportunity (even though it's a Lost Deal) and using Lead Status set to Unqualified to indicate their status.

But, it seems lead status is only supposed to be used for MQL/SQL LCs. Is that the best way to handle it or should an unqualified deal be downgraded in lifecylce stage to something other than opportunity? 

[franksteiner79]

Hey @taylorrpayne 

That's a great point that was also raised during the German version of this AMA in the community.

If anything it's down to my lack of design skills. Ideally the lead status colouring would fade into the opportunity LC stage. And the way you described it is actually perfect.

We'd want to know when contacts became opportunities and didn't end up closing. As this provides insights - should we qualify better, what are reasons for not closing (price, lack of features, timing, budget, etc.). One report I find really useful is looking at time in lifecycle stages (which requires some manual setup) and Deal average time spent in each stage (which is available in the report library). This helps identify where prospects experience friction.

Personally I am not a fan of resetting or downgrading lifecyce stages as this would mean any reports we run on LC stages wouldn't be accurate.

[taylorrpayne]

Oh man, that's awesome. Honestly, the validation is super helpful. I think I've learned that we're not using MQL/SQL properly.

We've been defining an MQL as anything our marketing has qualified. For us, this means a demo/discovery call is booked. 

Based on the graphic, it looks like when an appointment is scheduled, that doesn't necesarily qualify them as MQL. Is that right?

Our logic has been that the demo will result in one of three things: an SQL with no opportunity yet for further pursuit, it'll turn into an opportunity, or it'll be unqualified in which we leave the LC stage alone and mark lead status as unqualified.

So it made sense to use to make all website/ads meetings booked (demos, discovery calls) as MQLs. Are we thinking about this the wrong way?

[franksteiner79]

I wouldn't overthink the naming. The default HubSpot deal stage just happens to be called "appointment is scheduled" but in this context that wouldn't equal someone booking a meeting. This is more, we've qualified you and have our first proper sales call.

To me your definition of MQL sounds spot on. Are you doing lead scoring already? Or how do you define and set the MQL status.

As a rule of thumb setting of MQLs is usually automated via lead scoring. One thing I've done myself in the past is to fast track leads when they submit high intent forms, i.e. request a demo. This makes them an MQL immediately, not needing to reach a certain score. 

Setting SQLs is always a manual step, done by the sales rep or someone equivalent. This can be done in various ways, the one I commonly see is BANT - Budget, Authority, Need, Time. If that hurdle is passed the contact is SQL. After that an Opportunity/Deal is created. In reality this can sometimes be done at the same time.

Sounds like you are doing all the right things!

[taylorrpayne]

Thanks for the info, Frank!

So we have some lead scoring, yes. We've also identified that at a lead score of 8, those are worth our sales team engaging with and reaching out to. Our customers generally have a lead score of 16+. 

I'm thinking that any discovery call or demo that gets booked should be an MQL and then I add a workflow that graduates people to an MQL when a lead score of 8 is acheived. I have a workflow that prompts my sales team when this lead score is acheived but I'm not automatically elevating their lifecycle stage.

P.S. as an inbound consultant, how does one engage you for consulting? Not sure if I can ask that here or not haha.

[franksteiner79]

Hi Taylorr

8 seems a bit low for a lead score. What are you scoring for and how high are the scores?

Are you scoring demographic and behavioural data points? Commonly I see 50 or 100 being the target score for an MQL, with things like "right industry" scoring 5 or 10 points.

I'm also a big fan of more but less complex workflows.

In the case of scoring this would mean:

1. Workflow sets the MQL LC when the required score is reached.
2. Workflow assigns and notifies the sales rep.

That way the second WF triggers whenever a contact becomes an MQL, regardless of if that change happened automatically or manual.

As for working with me, or one of my colleagues in the US, the best starting point would be talking to your Customer Success Manager (Shakarra McGuire). You can also have a look here at the consulting services we offer. The two major options are project based (limited amount of time and working towards a specific outcome) or ongoing (where a consultant works with you continuously for the duration of your contract).