There often comes a state in Sales, especially for new teams, when almost everything seems to be going haywire.
You do not see the results you need, not sure why.
At the very worst, you wouldn’t know what to do about it and get stalled. Getting in this situation will have a profound effect on your organization’s goals.
Some of the best performing Sales teams worldwide profoundly understand and master their Sales cycles. In the book Cracking the Sales Management Code, author Jason Jordan’s research shows that companies with Sales processes bring in 18% more revenue.
That’s the reason why we decided to break down everything you need to know about Sales Cycles on this blog.
What is a Sales Cycle?
Sales Cycle is essentially the map of your prospect’s journey through Sales process steps defined by your organization. The process begins from the discovery of a contact/account either through outbound prospecting or an inbound inquiry. To close the account – the prospect will receive various forms of communication intended to help them buy.
All these stages of leading a prospect from discovery to close, over a while, eventually make up for the Sales Cycle.
Sales Cycle vs Pipelines
Sales Cycles and Pipelines can often be confused with each other.
It consists of the Sales process that define how and when your prospect is engaged. Whereas, Sales Pipeline gives you a view of all your active engagements with prospects.
An essential function Pipelines serve, is to make sure you’re engaging with enough prospects to meet your goals. A sales pipeline also has stages, similar to Sales cycles. Sales Pipeline can also be described as a collection of all the deals/prospects in once place, separated by pipeline stages.
Why is the sales cycle process important?
Without an understanding of Sales cycles, Salespeople are likely to get lost. A lot of communication with prospects might get aimless or too needy.
Let’s explore more benefits of having a defined Sales Cycle that can help your team get better at closing deals.
1. Helps define next steps
Depending on what you’re selling, it’s crucial to have a process written down so you can mitigate the consequences in times of uncertainty.
Whenever a prospect isn’t moving forward, you should be able to assess the problem and take the required next steps. It’s vital to know at what sales cycle stage the prospect’s stuck, as it will shed light on underlying problems.
The sales cycle acts as a map for the Sales team to guide the prospects to the next steps in the relationship. It also makes up for a much better experience for the prospect/customer.
2. Helps measure efficiency & productivity
Measuring productivity in a sales team is fundamentally only possible because of Sales cycles. Often, a lot of deals in the pipeline aren’t closing and that doesn’t mean there’s no progress.
Once a prospect is tagged being at a particular stage, it makes it easier to track their progress within the sales cycle. Being able to measure progress then helps further improve and tweak processes, playbooks, and tools.
As mentioned in a research, Attaining Peak Sales effectiveness requires a complex blend of processes (i.e., Sales Cycles here) and Technology.
3. Increase in sales growth
The very purpose of the Sales function is to be able to grow revenues for the organization. Having a sales process ensures that you measure how your team is doing and help them improve.
With an optimized sales cycle in place, you can then scale your sales operations and grow your sales revenues.
Now that we’ve seen how essential Sales cycles are for an organization, let’s explore all the stages within a typical sales cycle.
7 stages of a sales cycle
Here are the stages in sales cycles supposed to guide your sales activities.
The following stages are involved in a moderately long Sales Cycle, Ideal for selling both medium and big-ticket products and services.
The first step in the sales journey is to identify your ideal point of contact at your target account. In case you’re selling to an individual, you probably know the person you’ll be reaching out to.
Identifying the right person comes down to a few key things.
First, you’d need to find the user of your product/service, who’ll then help you reach the decision-maker. Before you go out looking for your user, you’ll have to write down the characteristics using which you’ll be able to find them. This list of attributes is called the buyer persona.
Once you’ve identified your buyer persona, you’ll need their contact information to begin the engagement process. If you’re conducting outbound sales, use existing SaaS products purposely built for this. The leads that you capture according to your user persona are called SQLs (Sales Qualified Leads).
Once you’ve decided to reach out to a lead, your next step should be to analyze where they came from and at what stage of the Buyer’s Journey the lead is.
For someone who gave their email after reading a blog probably isn’t the person to sell the product right away, since they never intended to buy. You should keep nurturing these leads with educational content in hopes that they approach you specifically with the intent to purchase.
If your lead filled up an inquiry form, that indicates a strong intent. In cases like these, you should be quick to follow up with that engagement and carry the conversation to qualify them better. Reach out to them on phone/email; however, a phone call will help you move forward faster.
If your lead was captured externally on a web/social platform, the only option left is to reach out cold. You can use existing software/services to automate your cold email outreach. Writing and converting from Cold email outreach is very tricky and requires you to compose your email stages strategically.
You can refer to SalesHandy’s guide on writing better cold emails that convert leads into customers.
Once you’ve gotten a response and have successfully connected with your lead, it’s time to understand if they’re worth more of your time. You need to get now to become a prospect from a lead.
A prospect is someone who the team has identified as a good fit for the product and have strong buying intent. It is necessary as it helps you prioritize your time across multiple accounts and better understanding your prospects’ business. It will, in turn, help you focus on prospects that are much more likely to close.
It’s tricky to be able to analyze prospects for a fit early on, but this is where setting up a better process can help. To do this, try to collect as much data regarding the lead and their business as possible. It makes it easier for you to Qualify them as a prospect.
You need to be able to ask the right questions. Like,
- Can the lead buy your product or services?
- Is he the key decision-maker?
- What are the problems of the lead? Is your product solving this problem?
- Does the lead need your solution?
These questions should be a way for you to analyze the fit of your product for your leads’ use. If the above question says YES to all the questions, the point is qualified as a prospect. It is worth investing time and moving ahead.
If you connect with someone who doesn’t qualify to move further – try NOT to leave them dry. Give them the reason why you might not see a fit for the relationship. Meanwhile, add them to your marketing communications, so they’re in the loop for all the updates and releases. These prospects are quite likely to be your future customers/referrals if you play your cards right.
Since you’ve already qualified your prospect, it’s now that you get to “sell” to them. It is accomplished by presenting/demoing the product specifically for your prospect’s business. The presentation gives them a taste of your product and helps you move the deal further.
You also now need to involve the decision-maker in the account. With all the information you’ve collected from the prospect and your assessments, you’ll need to present a demo with their team formally..
The key here to convincing them is to make sure their interests are aligned. Your prospect needs to know what they stand to gain if the transaction goes through. It could be as insignificant as recognition within their organization internally. Whatever the pitch, remember these should be non-material, organizational goals. Anything else might count for bribery.
The key to making effective presentations is focusing on the prospect’s business problem and how your product or service can benefit them, not much on your features/functions. They need to be able to see the impact on their business right in front of them. It will be easier for them to make a purchase decision since they’ve seen the value your product brings.
5. Clear Objections
Presentations often might go through without hiccups, as your prospects might need time to evaluate your product thoroughly. Follow up interactions involving contractual negotiations and obligations might be faced with hard-hitting questions and objections.
These objections often come in the form of last-minute adjustments in prices, feature limitations, etc. Here are a few examples you might see coming
- They need more features for the same budget as new requirements have sprung up
- Tighter delivery timelines than originally negotiated due to internal problems & affairs
- Competitor offering a better price/value
- Last-minute referral checks and other legal hurdles.
The best strategy at this stage is to have quick, open lines of communication and offering the best possible value for all parties involved to move the deal forward.
Your prospects often might start reaching out to your competitors one they’ve received a quote from you. You can safeguard from such behavior either by having them sign clauses or seeking confirmation on not participating in such practices in written form.
It’s also highly recommended that you refer to LAER: The Bonding Process (Carew International), which provides a useful framework for handling objections of every kind.
Once you’re able to get across all the objections, it’s now time to push for the close. It isn’t as easy as it might seem – prospects might still have unresolved grievances they haven’t disclosed. It might, in turn, extend this stage further than expected.
Again, it’s essential to carry this entire stage delicate and swift once you’ve gotten the verbal nod from your prospect to close. You might want to have internal processes in place to take care of logistics, accounting, reports, etc. Prospect’s organization might have its cycles and processes, so clearly communicate your priorities and procedures to complete the sale in the designated time.
Deals do drop out at this stage as well, for several reasons which might be beyond your team’s control. It’s crucial to realize the fact, move on while passing on the prospect (now a lead) to your Marketing team so that they can be engaged/nurtured for the future.
7. Get Referred
Your Sales process doesn’t end at Closing.
To ensure better conversion rates on future prospects, get help from your existing customers. Even a moderately reasonable opinion from your customers spread through word of mouth can work wonders. To help this happen – have a customer success program in place.
As said by McKinsey, it’s the new growth engine. After a certain point, the top funnel can only grow so much. It is where your existing customers will passively help you expand your pipeline. They can help you close new deals across new departments within the same organization or others in the same industry.
Apart from good old word of mouth, try and get your customers to contribute and build your social proof. It can be done by having their permits to use their brand logo on your website, partner on case studies, etc. Good content with Social proof can be of exponential value as it distributes itself over the internet. Also, obtain permission from your clients if they can get on reference check calls for new clients.
Like mentioned earlier, this is possible with a customer success team in place. They will ensure your customers can bring in the best results by onboarding on the product appropriately. Your success team will also become a channel for constant product feedback and improvements.
Since now, you know about the premise of the Sales Cycle, let’s move forward to understand how to optimize and implement your Sales cycle.
Implementing and improving on your sales cycle
Goals to set for your Sales Cycle
The goals you set for your Sales cycle have to reflect your organization/team’s targets. The simplest way to do this is by working your way backward from your sales targets.
Example: Let’s say you have a target for $10,000 in closed sales a quarter, with an average ticket size of $1000. It means you’ll have to close ten accounts. Assuming 1 out of 100 people you reach out to will convert, you’ll have to reach out to 1000 prospects, which makes your Bottom of the Funnel conversion 1%.
If you’re setting up the process for the first time, you might not meet your goals for the first few cycles. Measure what you achieved the first time and improve from there onwards.
Apart from conversion, you can also set goals for increasing the average ticket size, increasing the quality of your pipeline data, improving NPS, etc.
To help you better track the goals you set for your Sales process, let’s now explore the metrics you could use to measure progress towards your goals.
Metrics to track Sales Cycle efficiency
Here are the metrics you can use to measure your Sales Cycle’s efficiency:
- Conversion rates
- Sales cycle times
- Sales yield
Conversion rates between stages are the best way to track sales efficiency. Increasing conversion rates mean there’s room for improvement, but the delta gets smaller every cycle/quarter.
Once you see your conversion rates stagnate, you can then work on improving your sales yield (revenue per salesperson) – better Sales Yield will mean scalable revenue with growth in team size and Top funnel.
After conversion rates, Sales Cycle times are the second-best way to measure your sales cycle’s efficiency. Shorter cycle times will mean more prospects churned through the cycle, hence a better volume of conversions in the same amount of time.
Once you’ve started tracking growth on your Sales processes, you can follow the tips given below to improve your results further.
Tips to Improve your Sales Cycle
1. Tightening the feedback loops
Creating feedback loops are the most effective way to iterate new improvements into your Sales cycle. Tightening these feedback loops over time will lead to peak efficiency in your sales process. It will also reduce dependency and make your sales process more predictable and less ambiguous. It will help you save time, run better forecasts, and manage customer expectations.
2. Automating & reducing human error
Automating steps of your sales process will help you create an efficient sales cycle. It enables you to save time, energy, and anxiety, along with reducing dependency on Human intelligence.
As a consequence, possibilities of errors go down, and cycle times will also have an impact. You can easily automate various steps in sales processes like follow-ups, outreach, etc. using existing tools and services like SalesHandy.
3. Having a quality pipeline
Filling up your Sales pipeline with better-qualified leads will help you improve your conversions and revenue. Better qualified leads are more likely to respond better, and that alone will massively increase conversions. On the flip side, bad quality leads/prospects will negatively impact your reputation, which puts your future deals at significant risk.
4. Improving post-sales experience
Improvements in Post Sales experience will significantly improve your chances of being able to upsell to your existing customers. You’ll also be gaining referrals from them, which are much more likely to convert with much less effort. Post Sales/Success will help you retain more customers as well, which, combined with an efficient sales cycle, will result in good growth.
Top sales cycle management software
The best way to keep track of prospects in your sales cycle is by using an ideal Sales cycle management software that maintains all your prospect contact and engagement data in once place.
Here’s a list of the top-rated Sales CRM software for small to large businesses:
Hubspot is a free Sales CRM for Small Businesses with all the essential features. You can track your emails, manage contacts, deals, and pipelines. Hubspot is a great CRM for small and medium-sized sales teams getting started with their Sales cycles and processes.
As mentioned, it’ll be free forever to use; however, integrating SalesHub to send out your emails will need you to subscribe to paid plans after a certain point.
Pipedrive is a sales CRM built to help teams automate and track their sales processes. It can help you track and automate email & phone communications, manage leads, and analyze your sales cycle to understand your operations better.
Pipedrive has a mobile app to help you engage with your prospects and track them on the go. It also has native integrations with over 150 apps and services that help your existing tools and services work seamlessly with Pipedrive.
Pricing: Starts from $12.5/month/user
Zoho’s Sales CRM is a part of the Zoho family of Apps. If you’re already using Zoho apps in your team, Zoho CRM will integrate well within your workflow. It has an inbuilt AI assistant that can fetch you details for anything that you might want to search with your account.
Zoho CRM supports data import from other CRMs and spreadsheets to make migrating from other CRMs easier. They also have apps for iPhone and Android to help you access your CRM on your smartphone.
Pricing: Starts from $12/month/user
SuperOffice is a Sales CRM and engagement solution that enables you to both track and engage with your prospects in one place. It has a website integration that will allow you to chat with your website visitors in real-time.
You can also create tasks for running your Sales engagement workflow. SuperOffice has native integrations with Office 365, Outlook, and Gmail. For EU countries looking to host and run SuperOffice on-premise, they also have an option for that.
Pricing: Starts from EUR 45/month/user
Keap is a CRM software with automated outreach features built into it. It automatically greets your new leads with personalized messages. The automated outreach features allow keap to send automatic follow-ups and reminders to your prospects.
Keap also has a campaign automation tool used to build a highly nuanced engagement workflow across all communication channels. Keap has a massive library of natively integrated apps and services that include AdEspresso, BigCommerce, Leadpages, Intuit Quickbooks, WordPress, etc.
Pricing: Starts from $79/user/month
Leadsquared is a CRM software for task management and automated lead segmenting/qualifying. It sends follow-ups and notifications to the assigned SDRs about respective tasks assigned to avoid delays and slippage.
Apart from qualifying leads as per their engagement signals, Leadsquared also spots hot leads and upsell opportunities using the same signs. Leadsquared has its own public API that’ll help it integrate with other supported applications in your workflow.
Pricing: Starts from $10/month/user
A lot of your sales team’s efforts and yield will be dependent on how you set up your Sales processes and what kind of goals you define for your team. Sales being one of the most important and crucial functions inside an organization, your early decisions regarding the Sales processes will have a significant impact on the organization.
If you already have a sales process in place, what are the biggest addressable challenges you see within your team?