Selling is not an art you can practice on the fly. Thriving businesses have sales strategies that do more than blindly try different approaches to see what works. In most cases, companies with sustained sales success firmly establish their sales strategy and tactics, then continuously fine-tune these processes.
However, there is no such thing as a one-size-fits-all approach to sales. Depending on a variety of factors, including the industry, target markets, and types of customers, businesses may plan and carry out their sales process differently. Because of these variations, companies use different steps and activities to close deals.
In this guide, we will cover the concept of the sales cycle, how to identify the stages of these cycles, and how to initiate a sale cycle effectively. We will also review the most common mistakes and best practices for improving your sales process.
What Is a Sales Cycle?
A sales cycle is the process or series of steps or stages that lead to a sale. Individual steps may vary by company, typically in the middle of the sales cycle. Most sales cycles, however, begin with prospecting and end with a sale and referrals for future leads.
Sales cycles are frequently confused with sales methodologies, which are frameworks for putting sales cycles into action. The most obvious difference between the two is that the sales cycle is more tactical and can be broken into specific stages. Now that you have a general understanding of the concept, we can get into the details.
What Are the Stages of a Sales Cycle?
Since each company's sales cycle is unique, identifying your individual sales cycle stages is critical in developing a successful sales strategy. Consider factors such as industry type, your company's market share, and the type of product or service you provide. The following are the basic steps of the sales cycle, which you can tweak to design your trajectory.
Prospect
Prospecting is the first and most essential step of the sales cycle. It involves identifying and acquiring new early-stage leads or prospects to initiate the sales process. Since this step starts and directs the sales cycle, it requires thorough preparation. Instead of rushing in and wasting time and human resources on contacts that are not potential customers, take some time for planning. But where and how do you start?
The first step is to determine your ideal client and create an ideal customer profile (ICP) if you do not have one already. An ICP contains information about your perfect customer's background and pain points, as well as how and where to look for them.
How is this stage different from lead generation? In lead generation, you collect your leads' contact information; in sales prospecting, you reach out to leads to determine their interest in your services. Advertisements, outbound emails, discovery calls, and signup forms are examples of how you can reach out.
Research and Qualify
The next step is to qualify new leads by determining whether they are a good fit, their stage of the buyer's journey, and whether they are likely to progress in the buyer's journey. A sales representative can typically identify qualified leads during a "connect" or "discovery" call (or sometimes over email, if not by phone). During these calls, leads ask qualifying questions such as: "what problem are you trying to solve," and "what other solutions are you evaluating." Sometimes it is possible to qualify leads by simply evaluating their actions.
Consider the following scenario. A potential customer has agreed to provide their email address in exchange for a newsletter subscription. They may not be ready to buy just yet, but they are researching possible solutions. In this case, it is better to send them an email than to call them or try to set up a meeting. On the other hand, if your potential customer has inquired about the specifics of your product or requested a demo, they are almost ready to buy, and it is a good time to call them.
Initiating First Contact
Once you have a steady inflow of leads and their contact information, you can start contacting them. This step of the sales cycle involves reps initiating contact with early-stage leads to gather more information about them. But how do you get in touch?
You can interact with your prospects through social media, email, or phone calls. Your best mode of contact depends on where your business "lives" and how potential customers show interest in your products or services. When you contact them, introduce yourself, share the value of what you offer, and ask if they would be interested in learning more.
Keep in mind that this step and the previous one are interchangeable. For example, you may want to contact potential customers first and then qualify, which is perfectly fine. Alternatively, you could pre-qualify, reach out, and then do the final qualifying.
Nurture
During this step, sales representatives learn more about each prospect or company and decide on their next move.
By putting themselves in the customer's shoes, your salespeople can better tailor and personalize the experience they provide, increasing the likelihood of making a sale. Understanding each prospect's challenges and needs, and establishing your product or service as the solution, is critical at this stage.
If your lead is not ready to buy immediately, start nurturing them to gradually move down your sales funnel. Simply put, you should not force them to buy but guide them toward the best option. You can guide prospects in several ways: sending out emails, showing them tailored ads, or providing them with downloadable guides, ebooks, case studies, or other content.
Present and Make an Offer
Once you have a fully qualified lead, it is time to present your sales offer or pitch, which may include a presentation, a product, or a service demonstration.
The most effective sales pitches are tailored to a specific prospect using the information gathered in the earlier stages. If you carefully follow the previous steps, you will be able to customize each offer to address the prospect's use case and pain points.
Handle Objections
It is common for prospects to have objections. Regardless of the nature of these objections (cost, onboarding, or other aspects of the proposed contract), it is important to anticipate them. Plan responses ahead of time so your sales team can easily handle objections.
Close
Obviously, every salesperson's goal is to close a sale. But how a deal is closed varies greatly from business to business and may involve making an offer, negotiating, or getting the support of decision-makers. Regardless, the process should result in a mutually beneficial agreement between the prospect and the seller.
Sales Cycle Management
Now that we have figured out the stages of the sales cycle, it is time to present you with a concept of sales cycle management.
For both the sales team and upper management, sales cycle management is a useful tool for tracking the various phases of the sales process, spotting patterns, and determining areas for improvement.
Tools can be helpful for sales cycle management, such as a CRM or any other type of software you use during the sales process.
Sales Cycle Length and Importance
If a classic seven-step approach is good for one company, it does not necessarily mean that this approach will work for you. For instance, your sales cycle might need eight steps or five steps instead of seven. Here are some examples of typical sales cycle lengths.
Conventional Sales Cycle
This cycle typically lasts between four and six months. The basic seven-step process is usually this length.
Long/Short Sales Cycle
You can tell if your company has a long or short sales cycle by comparing it to your industry's average. Some companies have short sales cycles that last less than a month, while others have longer cycles that take more than twelve months. The appropriate length is the one that works best for your company.
Complete Sales Cycle
In some cases, your sales cycle may need to be longer than usual, requiring your reps to jump through more hoops to close a deal. Even though it is more common for B2B, where deals can take up to a year to close, this may apply to B2C as well.
Common Mistakes in the Sales Process
Your Sales Process is Poorly Defined
The first and most common error in the sales process is not being specific enough about the steps involved. Your team must understand what they need to do, step-by-step, so they execute the processes correctly while all following the same rules. A clear process also helps teams identify the exact moment something went wrong. When steps are flexible, they are more likely to be skipped.
Misalignment Between Your Sales Process and Your Customers' Journey
Failing to take the customer's journey into account when developing a sales process is a common but costly blunder. In other words, you build your sales process based on your beliefs as a salesperson rather than taking into account the customer's doubts, needs, and concerns.
You Are Not Documenting the Process
Your sales process should be meticulously documented in a publicly accessible document. Do not put pressure on yourself to remember every detail. Instead, refer to the documents while keeping in mind that some improvisation is always welcome.
Maintaining a Strict Approach to Sales
The next common error is taking a one-and-done approach. One size does not fit all in the sales process, so make sure your sales process is flexible. You must determine how this process works best for your company. Then focus on, refine, and evolve your sales process as needed. Feel free to pick and choose elements from various approaches to develop a unique strategy that meets the needs of your business. Also, make use of reliable metrics to check the effectiveness of your process.
Leaving It All Up to Sales Management
Another common misconception is that sales management is solely responsible for the sales process. A more collaborative approach will produce better results and allow your company to grow further. So feel free to involve different departments in discussions and brainstorming sessions.
How to Improve Your Sales Cycle Process
Whether your team is close to reaching its revenue goals or still has a way to go, fine-tuning your sales techniques to increase conversion rates is always a good idea. Here are a few things that can help improve your sales cycle.
Cut Down on Low-Value Tasks
Too often, sales teams get bogged down with low-value manual tasks such as administrative and service tasks, including data entry, scheduling, and even lead generation activities. There are two options for dealing with these types of activities: automating or outsourcing them.
For example, you could use CRM software that includes marketing automation functionality or integrate with marketing automation software. This unified approach to data management lets your sales and marketing teams focus on important tasks while giving them more information, like if a prospect opened an email or went to a certain page on your website.
Align Sales With Your Marketing Team
Sometimes the sales team needs additional expertise. The marketing team is here to back you up! Work together to boost your sales through content, online advertising, and website optimization. When marketing and sales teams cooperate, prospects engage your services with a clearer idea of what they want.
Follow Up
Making initial contact with your lead is just the beginning of the sales process. The next step is following up on your lead. The best way to deal with this is to implement a strict follow-up strategy. For example, take advantage of your automation software to keep track of your follow-ups and contact prospects on their preferred date. You can also share valuable content that tackles your prospect's pain points through follow-up emails.
Move Slowly
When we say "move slowly," we are talking about building a long-term relationship rather than trying to sell from the get-go. Start small and make it simple for your lead to say "yes" to your requests. For example, when you first talk to prospects, you can ask for a phone number to make it easier to get in touch. Then, request information about the decision-maker, and so on. When you move slowly, closing the deal may come more naturally and easily for both of you.
Train Your Team
Top managers and sales department heads can help your team succeed and close more deals by preparing key documents (such as sales decks and kits) and keeping track of metrics while the team becomes accustomed to a new sales cycle process. Provide additional resources and support as needed and opportunities to learn from high-performing sales representatives.
How to Build a Sales Process
When designing your sales cycle, it is essential to understand how each stage impacts your company, sales team, and customers. This knowledge helps your team create a growth strategy that can be maintained over time.
Outline the Sales Process Steps
Examine your sales process history. Determine the actions taken, which were successful, and where prospects lost interest. Also, consider the average duration of each step and whether it should be shorter or longer.
Map the Customer Journey
Examine your sales process from the customer's perspective, taking note of their actions and reactions. Always put the needs of your potential customers first by keeping your buyer personas close at hand.
Determine the Next Step for a Prospect to Advance
You should understand what causes a prospect to progress from one stage in your sales process to the next. The salesperson's assumptions should not matter as much as the prospect's actions. Consider whether you hit a specific pain point that prompted the prospect to schedule a call and if you addressed objections. Determine how well you tailored your sales pitch to the customer's pain points, needs, and desires.
Make Adjustments and Evaluate
Once you have planned your sales strategy from both the seller's and the buyer's perspectives, you will be ready to put it into action. Remember that you will need to put your method to the test and evaluate outcomes to determine if your sales cycle is bringing you closer to your goal.
Wrapping Up
Developing a comprehensive sales process will assist your sales team in closing more deals while providing each prospect with a consistent, brand-representative experience. Go ahead and try it out! And if you prefer a more formalized approach, feel free to use our free sales plan template.