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There are some threads on this.
Yes, create a corresponding Lead or Contact Status on the SFDC Contact such that on conversion, the Contact takes in the appropriate value. For example, you could assume all Contacts to be SAL and start there.
You will have to think about Customer Accounts and how to flip the attached Contact Status to "Customer" as well.
I think the status on the Contact and Customer Accounts would be more beneficial as that way we would know if a Contact hits MQL status as we have a number of inactive Contacts that we are not currently doing business with.