What is a Sales Cycle? Definition, Stages and Steps

Sales cycles vary from company to company owing to a few factors: industry, target audience, and type of customer. Similarly, the steps and standard practices to closing deals also differ based on the seller firm.

This guide to a sales cycle will throw light on the seven stages of the process, important strategies, and best practices within the industry to boost the system as a whole.

What is a sales cycle? 

The steps or process followed by a company when selling an offering to a customer is called the sales cycle. You cant skip any of them to attain lead conversions. In other words, it is an integral whole, following up to successful deals in the sales funnel.

Importance of sales cycle

  • Training sales reps becomes easy with the help of a proper master plan. 
  • A sound understanding of a sales cycle ensures effective distribution of responsibilities within the team to act on the present drawbacks.
  • Tracking the sales cycle helps to measure the deployed team’s productivity on an optimum level. For instance, if the average length of the sales cycle decreases per month, the sign indicates faster lead conversions. Meanwhile, it’s important to evaluate the sales cycle length against competitors to know the exact position of the company in the market.

Stages of the sales cycle

While companies cater to unique sales cycles, some stages serve as obvious to every organization. The difference prevails in terms of industry, market share of a company, and specific type of offering.

1. Prospecting

Firstly, a sales team sails off to find business prospects by leveraging a good amount of info collected from multiple channels. It might be ads, signup forms, demo requests, outbound activities, discovery calls, or lead lists. But before that, having an ideal customer profile(based on personal background, problems) ready is a must to reach out to the potential leads and approach them correctly. The tactic helps count on additional attributes for evaluation apart from interests, demographics, and associations. Secondly, think of a common term to define your leads(the company decides on the nomenclature) and sort them into two categories according to their interest levels- probable or likely. 

2. Establishing contact

When the lead generation assumes a steady flow, start reaching out to the prospects and explore the respective stages of their buyer journeys. Suppose, you have received one’s contact details in exchange for a booklet download. Here, the lead is trying to get info about how to solve their problems at the grassroots level and doesn’t wish to make a purchase. In such a case, you should connect them via email and nurture their demands before dialing or scheduling a physical meeting. Moreover, sales personnel should call leads as soon as possible for improved conversions. If your calls go unanswered, know that it might cost 8-12 attempts to establish a connection. Also, shuffle your timings when needed.

3. Qualification

Besides exploring the size of the company, annual turnovers, decision-makers, specific needs, and corresponding timelines, leads’ budget serves as a crucial parameter in the sales process. Say, a premium product won’t be affordable for every customer. 

4. Nurturing

Many times, companies push to sell their offerings. If a buyer is seriously considering your solution, the attempt can be a major blunder to derail all efforts to date. You need to wait for the right moment to arrive rather than forcing sales. In the meantime, share relevant resources with the decision-makers such as guides, case studies, articles or target them via Facebook, Google, or LinkedIn ads. 

5. Offering

Once your lead visits the pricing page or signs up for a trial session, be sure about their purchasing intent. That said, in the trial session, observe how the lead would use your offering. Accordingly, target your offer post demonstration.

6. Handling objections

Making an offer places the ball in the lead’s court that might get a push back or a couple of objections. Your prospect might reply saying:

  • “We’re taking a look at your competitor and might choose them.” 
  • “Your product is complicated enough.” 
  • “I didn’t come across positive reviews about your company.”
  • “Your product doesn’t cover all features that we want.” 
  • “I’ll get back to you soon,”
  • “I can’t commit to any contract as of now”. 

Such objections must be handled with care, convincing them that your company offers the best solution. If the prospect labels the offering as expensive, present the ROI. Either way, if they express concern in getting hands-on new technology, talk about the necessary support in terms of setup, training, and service policies.

7. Closing deals

After handling several objections, prepare the required paperwork and agreements led by asking a closing question to the prospect. Finally, zero down the right time for the contract execution. Such an approach is termed direct. 

On the contrary, if the leads don’t respond owing to eleventh-hour changes in plans or other circumstances, adopt a softer approach. Always know your lead’s temperament to adjust your strategy.

Post-closing a sale, sales reps generally wish to end the meeting abruptly, in hope of leaving the prospect with no option to change their mind at a later stage. However, that shouldn’t be the outlook. Instead, the prospects should be allowed to ask questions and show how the next steps in the sales process would look like. An in-person meeting should end with giving out the rep’s business card to help the leads address any issues or request them to refer others dealing with similar problems. 

Length of a sales cycle

Just like the varying steps of a sales cycle, its length also differs based on the company implementing it. Studies reveal almost 30% of companies go for 4-6 months. The rest of the companies opting for shorter or longer spans have come down to a low. However, multiple factors take a call on the length such as the target group, ICP, effectiveness of the process, the percentage of loss or win of a team, and cost of products.

It’s crucial to note a company’s average sales cycle length with respect to the particular industry’s typical average sales cycle length. If longer, it has to be cut short as per the industrial standards.

Conventional sales cycle

Pursuing 7 steps in total, it takes usually 4-6 months to complete.

Long/short sales cycle

A sales cycle taking less than a month is termed as short while that of more than a year is labeled as long.

Complete sales cycle

A complete sales cycle might expand to some additional steps, since getting through a decision-maker doesn’t come easy.

Tips to improve the sales cycle

  1. Shorten trivial works

Sales reps invest 37% of their time in selling on average, with the remaining time being spent on trivial works(service and administration-related responsibilities). Outsourcing administrative roles such as scheduling, data entry, lead generation can help boost the sales cycle with better focus, efficiency, effectiveness, and growth over the period.  

2. Do away with the task of scheduling meetings

Sending more than one email to agree upon a meeting schedule can be time-consuming. Relying on tools like Meetings or Calendly can serve the purpose handily. It syncs with a rep’s official calendar collaborating on both the parties’ time.

3. Coach your team

The sales managers and directors must give foundational training to the reps with sales decks, kits, and other documents while keeping an eye on each team member’s metrics as they adapt to the process. This tactic will help detect the backlogs at specific stages of the sales cycle and address them with additional supervision.

What are the KPIs of a sales process?

3 KPIs yield to measure optimal sales cycle performance namely:

  1. Number of sales in a month

The number of sales made in a month can keep a tab on the number of new customers achieved during the phase. Such figures have to be compared to the last month’s gains for improved evaluation.

2. Number of new leads acquired in a month

This metric is determined by the type of business where the average lead-to-sale conversion rate stands crucial. 

3. Length of the sales cycle

The shorter the length of the sales cycle, the more effective the process. The sales cycle length of individual reps has to be analyzed and cited against the company. If it’s less, then the progress is worth appreciating. 

Tracking and optimizing this KPI can be a great boost to your sales process. To improve upon this attribute, you can assign sales reps to follow up with cold deals to boost your conversions. Instead of just pushing these to an immediate sale, you can share content with them, offer them discounts, or even extend their trial span. 

What is sales cycle management? 

Maintaining a record of the activities throughout the sales cycle stages and adjusting them with the buyers’ behavior is called sales cycle management. The stages can highly differ in terms of mid-market or enterprise, stemming from a common process- Research-Discovery-demo(RDD). 

Important terms 

Custom Demo or POV:

A personalized and profound working session targeted towards various stakeholders underlines the utility and overall impact on a business from a practitioner and business leader’s standpoint. 

Technical win:

The stage where a company’s marketing and sales ecosystem adopts flexibility technically(being aware of the suitability and difference). 

Organizational buy-in:

Key stakeholders perceive the utility of the seller company in respect to their business.

Contract negotiation:

The involved stakeholders receive an order related to terms of payment, followed by price negotiations(if any).

Staying relevant in the sales cycle management leads to a point of concord between the seller and buyer. Always remind your lead about the criteria behind decision-making while highlighting their last conversation with your business.

Don’t overcomplicate negotiations

Buyers in the present day expect the seller companies to present win-win solutions, rather than conflicting negotiations. A sales team’s job is to refine the terms of a deal and streamline the closing without triggering any controversy at the final moment. On the other hand, multiple negotiations can however complicate the entire sales cycle.

Strategies to speed up a long sales cycle

  1. Deploy a “top of the funnel” paid search model

Before buying anything, people research on Google to explore the possible options, companies in the space and carry out a comparison between various items. No matter what, Google is the main source to bring in leads. Hence the vitality of a paid search strategy.

Flip the coin and you must understand how to make “top of the funnel” offers. Firstly, conduct extensive keyword research, omitting terms like “apply now”, “buy now”, “signup today”. Think, what if you were the customer? What would you have searched online? Stuff the same into your model.

2. Promote an ad upholding the point of difference

Highlight some compelling offers in your ad. For example, frame a free shipping or refund policy that your rival doesn’t have, led by ad extensions(site links, callout extensions). 

3. Feed landing pages with educational content

The top-of-the-funnel leads are simply beginners who want to get started from scratch. So, they would be more curious about educational content than exciting offers. As you equip them with the resources, nurture and slowly push them into commitment. Never hurry into achieving sales. Until the leads are aware of your brand, why will they be open to offers? Incorporate content and offerings in the sales cycle at a steady and balanced pace. Otherwise, rushing through would backfire on the real motif.

4. Fuse thought-leadership content with promotional materials

Don’t offer promotional collaterals(demos, purchasing guides) for every product or service. Else, leads might feel they are being tried to push around the corner for something or the other. This will manifest a sense of losing authority in the sales cycle to the prospects, driving them away from the actual purpose. 

5. Add a face to your brand

A brand has to have a human face throughout, instead of being an intangible entity. Hence, the importance of fielding employees as brand promoters. They can be owners or higher authorities who will add a personal touch to the brand, thus attracting more connections. Lastly, it’s all about leaving an impact on your lead’s business and supporting them in their endeavor. Tactics like publishing blogs (featuring targets), force ranking, and promoting them via channels like LinkedIn sponsored posts, emails, or business development representatives using such posts for engagement can be implemented to maximize audience traction.

6. Study common behaviors and make the needed changes  

While marketers are quite familiar with A/B testing, overdoing them would mislead the sales cycle. Then you will spend all your time on one activity, eventually missing the set targets. Ideally, you should test one element at a time and make the necessary changes.

7. Prioritize data analysis

Prioritizing data analysis doesn’t mean you have to count on data all the time. It implies, forming and testing a hypothesis to know the path to lead conversions. In a nutshell, the aim is to find out the midways in the funnel which otherwise get overlooked by reps.

Key takeaways:

  1. What are sales cycles?

The steps or process followed by a company when selling an offering to a customer is called the sales cycle.

2. What are the 7 steps of the sales process?

  • Prospecting
  • Preparation
  • Approach
  • Presentation
  • Handling objections 
  • Closing
  • Follow-up

3. What are the 5 sales stages?

  • Step 1: Prospecting
  • Step 2: Connecting 
  • Step 3: Qualifying and Setting Goals.
  • Step 4: Demonstrating Value
  • Step 5: Closing the Deal
Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like