You will struggle to succeed in sales if you’re always trying to improvise. It’s important to create a sales strategy that makes it easy to follow a pattern that unlocks your strengths and reveals your weaknesses. Companies that enjoy consistent success in sales provide guidance for their sales team. For your sales team to deliver results, you need defined progression, which becomes a reference point, a framework that allows you to know what you should do in the different steps. Often, this infrastructure is called the sales cycle.
What’s a Sales Cycle?
The first step in understanding how to set up a sales cycle is to understand what is a sales cycle. A sales cycle includes specific actions a sales team follows to close new customers. Typically, sales cycles are confused with methodologies, frameworks that help in implementing sales cycles. However, the sales cycle is more tactical and includes stages like research, prospect, and connect.
Why is a Sales Cycle Important?
For the success of your company, it’s important to have a good sales cycle. This helps you organize your sales pipeline, evaluate the validity of your efforts, and prioritize leads. Having a defined sales cycle gives you a roadmap and reference points that help you understand what your reps are doing. You need cohesion in your team to deliver the results you want.
The sales reps need the know-how and flexibility to continue projects, so if you don’t have a sales cycle, they will lack the reference guide that can help them continue what was started by another team. With a sales cycle, you put in place the infrastructure that helps the reps understand the extent prospects have gone into the buyer’s journey. If they identify their position in the sales cycle, they’ll know how to approach the leads.
Detailed data from the sales process is vital in forecasting future sales. For example, the data can help you identify the sales each rep can make each month, based on the length of the cycle. Also, you can know which sales will succeed after they get to different steps in the buyer’s journey.
Having a designated sales cycle also streamlines training, as it offers a roadmap or template for your new sales reps to follow. It’s an effective tool in the training of new reps to help them understand the selling process and know about the different steps in the workflow.
Most importantly, the sales cycle helps you objectively evaluate sales efforts. With this system, you can easily tell how reps are doing and what worked well. Also, the system can help you understand what you did wrong or right, including showing if the reps deviated from the cycle and what happened whenever they did. Getting perspective for evaluation is essential, as it helps you understand how your business and representatives are performing.
The 7 Stages in the Sales Cycle
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You can look at the full sales cycle as an organizational chart, in which the sales process is divided into purchase-relevant phases. Depending on the phases, the connected activities and processes are determined. How the cycle looks is defined by your products and services. Here’s the typical sales cycle, which follows 7 stages.
1. Prospecting for Leads
This is the first step in your sales cycle, and it begins with defining your target groups and evaluating whether they can afford what you’re offering and the best way to reach them. Prospecting for leads also includes market research and writing down the list of potential leads. If you want to contact the prospects via email, you should first get real-time verified contacts. Verifying the accuracy of the email list is important as you don’t want to spend resources on contacts you’re not sure can be reached or converted.
As a business, you can prospect in different ways, including providing product demonstrations, connecting contact information, calling your prospective customers, and using targeted content marketing. You need to create a customer profile if you want to identify potential leads. In this stage, you can also rely on referral generation, which happens when an existing customer introduces a lead. This can be done through a cross introduction, and referrals are a powerful tool as it’s also a recommendation for your products or services.
2. Initiate Contact
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After identifying the right prospects you need to make a contact. For this, ask for a mutual acquaintance for introductions or engage with the prospects on social media platforms. You can also reach them over the phone or by email. When you contact them, introduce yourself and explain to the prospect briefly and convincingly what value you offer. You can ask them if they want to learn more. While contacting prospective leads, you should ensure you’re as relevant as possible. Your interactions with the prospects should make them see the value you can provide.
If the prospect knows about your company, you can call them about any new products or deals. However, if they’re completely new, the best way to introduce your business is via a method like an email. If you don’t have a shared connection, review the prospect’s social media presence. Use this medium to interact and start adding value.
3. Qualifying Leads
The third step is all about research. In this step, you should focus on vetting your prospects as much as possible. You can initiate this process in the contact stage of your sales cycle. However, most of the qualifying happens in the first meeting or appointment. Conducting this process can save you time and resources, as you should only pitch to qualified leads. You should find out if the lead is a decision-maker, and if so – if they’re interested in what you’re offering. If the prospects are not positioned to make purchasing decisions, you can politely ask to include a superior or manager in the meeting.
In the initial conversation, you can ask qualifying questions, which clarify and discover the client’s needs and pain points. This helps you establish if your business and the prospect are a mutual fit before moving to the next sales cycle stages.
4. Presenting the Offer
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This is a crucial phase, as you should convince the customer the product you’re offering is the solution they need for their problems. During your presentation, you can use previous experience with the sales life cycle to boost the chances of converting the customer. The presentation stage requires the most preparation. You must present in a way that helps to solve a problem your client has.
Be prepared to demonstrate how to use your product to improve the daily operations of the customer. Because there are other offers on the market from competitors, you should help the client understand how your company solves the problem better than everyone else. If you have a sales team, you should design a pitch template, which they can use and customize for different business needs.
5. Handling Objections
Of course, some of your customers will not make a purchase right away. They will ask many questions to clarify and understand how the product works as well as the different limitations. Some salespeople drop out after receiving one rejection. It’s important to ensure persistence, as about 80% of sales demand follow-ups. It’s likely your sales cycle is not going to run smoothly, so prepare to handle the pushback from prospects.
After the presentation, the prospects will share their objections. This could include concerns about their budgets, your prices, competitors, and whether they really understand the product. Listen intently and request for context, then do everything to understand the objections before you address them.
6. Close the Sale
This is the moment of truth, in which you finally close the sale. There are many approaches you can explore when it comes to closing a sale, and these depend on how preceding stages played out. Your duty, in this case, is to read the mode or attitude of the prospects. If the prospect listened and feel you two have connected, use a direct close.
Keep in mind, you already laid the foundation through preceding stages demonstrating why the business or customer will benefit from your product. Circle back to the main points. Remember, if you don’t close the sale at the first meeting, it does not mean it’s over. Some products can take weeks, even months to sell.
7. Generate Referrals
Landing the deal does not mark the end of the sales cycle. Once you close the deal, work on delighting your customers to keep them on board. You can leverage the customers for new business. Serve the customers well, and provide follow-up calls. The idea is to keep your customers close, and this will create opportunities to up-sell or cross-sell them. If the customers are happy, they are an excellent source for referrals, which allows you to foster more relationships.
Conclusion
Note that each sales process is unique. You can make your sales cycle stages short or long, depending on the structure of your business. In general, most sales cycles follow the seven stages shown above. Learn and practice the sales cycle to refine your technique and increase sales.
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