While every team has its sales secrets, there’s one that’s often overlooked but is absolutely essential for productivity – the sales cycle. A sales cycle is a basic tool used by companies everywhere. It provides a method for beginning and ending a sales effort (and everything in between) in a way that’s organized and efficient. Here’s how you can use it to the fullest.
What is a Sales Cycle?
A sales cycle is the path you take from the initial step of starting a sales program, through convincing a prospect to buy, all the way to following up with new customers, and then back again.
Why a cycle? From the buyer’s perspective, it seems more like a process with a clear start and finish. But from a salesperson’s point of view, it’s an ongoing process.
As you move through the list of targets created during the sales prospecting phase, you’ll be crossing some of them out. You might be left with only a few to focus on for a deal. Does that mean you can go home early? Nope. Instead, it’s back to the drawing board to restart the first stage of the cycle and generate more prospects.
Why is the sales cycle important?
There are a bunch of reasons why sales cycles need to happen. Here are a few:
Business sales are complex
The sales cycle is generally a B2B concept. In B2B, customers don’t walk into your store; instead, you’ve got to go out and find them. Plus, it’s likely that they are about to spend a lot on your product (and need to get a lot of people to sign off on the purchase), so you’ve got some convincing to do. All of this translates into a need for a consistent cycle of activities that maximize the chance of closing the deal (without driving you crazy in the process).
Not everyone is a natural-born sales genius
We all wish we could be superstars at our jobs with no need for extra work, but the truth is sometimes (okay, a lot of times) we need a little guidance. The sales cycle is a set of methods sales people often learn during the onboarding process. This sales cycle training will include best practices and training in the specific tools that they’ll use to make their efforts more efficient at each stage of the cycle. When that’s done, they will be all set to tackle those prospects, instead of being tossed in the pool to sink or swim and figure things out on their own.
It makes management easier
As mentioned above, a salesperson’s plate tends to empty as the stages of a sale continue. Every once in a while, a manager will ask them to “fill up the tank” and start the cycle over again with new prospects.
Secondly, in many companies, there is often a hand-off between salespeople over the course of different stages of the sales cycle. For instance, one employee will be the main contact, but others will take over when it’s time to hammer out contract details. For a manager, it’s important to know who’s up next.
Finally, the cycle makes it easier to measure performance. Metrics can be applied at each of the stages and compared to company and/or industry standards to see if things are going well. For instance, during the closing phase, were fewer deals closed than normal? Or more? This allows managers to figure out what needs to be improved and what should become a best practice for the team.
What are the 7 Stages of the Sales Cycle?
Some organizations work according to fewer than seven steps, but those shorter versions are usually some combination of the following:
1. Prospect
Build a sales prospect list using intent data and by leveraging your knowledge of customer pain points.
2. Connect
The first contact between you and a prospect can occur in many ways. For instance, you might be using an outbound sales strategy, or maybe the marketing department is collecting intent signals from the website. It’s mostly a matter of your go-to-market strategy and whatever works best for your different types of prospects.
3. Qualify
If you’re on a roll after connecting with the prospect, you can go straight to qualifying (or otherwise, wait for a follow-up interaction). During this phase, you are once again applying your knowledge of customer pain points to discover your prospect’s budget, needs, purchasing process, goals, and challenges and making sure they’re a match for what you offer.
4. Present
Now it’s time to make your pitch. Focus on how your product solves their most urgent needs and explain why your capabilities will serve them better than your competitors’ solutions.
5. Counter
In B2B, some level of pushback from the prospect is inevitable since it’s a more complex buying process. You’ll probably hear: Why does your product cost this much? How soon can it be implemented? Counter their queries with your superior product knowledge and experience with previous sales efforts, offering great examples like case studies where you can.
6. Close
An effective counter will lead to a close as the prospect should have had all their questions answered. If the prospect wants special terms, make sure that any adjustments are acceptable according to company policy.
7. Communicate
Following up, ensuring satisfaction, and maybe asking for a recommendation or case study ends the “sales” part of a sales cycle, but begins the process of customer relations – which is really continually selling your product to your customer to make sure it’s still a good solution for them. As you work to retain your customer, the cycle begins again.
How to optimize the sales cycle
There are many ways to make the most out of a sales cycle, from frequent evaluation and revision to leveraging social proof and marketing resources.
But if you had to choose one improvement, what would it be? It turns out that getting the cycle started is the hardest part. Lusha’s 2022 State of B2B Sales report discovered that 96% of salespeople need additional support early in the cycle, and the most pressing issue is getting the right data to build personalized pitches.
The solution to this problem is to get hold of great sales intelligence tools. HubSpot and LinkedIn Sales Navigator are top choices. But if salespeople are using them, yet still not satisfied, what should they be doing differently? Leveraging a powerful prospecting solution, perhaps?
Final note: cycles vs. pipelines
Sales cycles and sales pipelines are similar, but different. A pipeline is a way that salespeople understand how to guide customers through their journey using basically the same steps as listed above. The difference is in the information that each displays.
A sales cycle begins with a list of companies that gets shorter as some of them are disqualified or aren’t interested in your offering, while others convert. On the other hand, a pipeline shows where specific companies are in the cycle. For instance, some visual pipelines show what stage Company X has reached as a way to understand which sales activities still need to happen as the prospect moves towards conversion.
Key Takeaways
- A sales cycle lists all the steps that a salesperson should take, from creating prospect lists to closing and customer follow-up.
- A sales cycle helps with the complicated process of B2B sales, provides a “how-to” guide, and enables managers to monitor and improve productivity.
- One of the most valuable ways to improve a sales cycle is to introduce tools that allow salespeople to create personalized pitches.
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