What is a Sales Cycle
Getting a sale across the finish line is more cyclical than linear. This twisting path is the result of an increasingly competitive business environment in which the sales cycle is more complex than ever before. The changing pace of sales and customer needs means that revisiting the modern sales cycle is more important than ever before.
We define the sales cycle as the buyer and sales professional activities that bring a deal to completion.
In most cases, the methodology of and approach to sales cycles are unique to companies. Influencing factors include; solution complexity, price point, legal regulation, cultural considerations, and industry. Establishing an unencumbered sales cycle represents a competitive advantage. Building the right sales cycle will reduce the time it takes to close deals, provide insights to improve the sales process and enhance the customer’s buying experience.
The sales cycle is very similar to the sales process and is related to the sales funnel, but it is very important that the three elements of the sales strategy are not used interchangeably.
The sales cycle is a set of pre-defined stages or steps that are commonly followed in the execution of a deal, the sales process outlines the way that these steps are carried out, and the sales funnel is the tool that is used to measure and monitor the momentum of deals throughout their evolution.
Sales Cycle Stages
Most sales cycles are unique but there are some stages that will be common across industries, geographies, and organizations.
At Richardson, we like to talk about our client’s sales cycles in their most simple form, focusing on understanding the steps they need to define in their sales cycle that empower them to more effectively find, win, and grow opportunities and then build a performance improvement plan to support each step in the cycle.
In the “Find” stage of the sales cycle professionals are typically performing the following types of activities:
- Identifying targets
- Lead qualification
- First contact
In the “Win” stage of the sales cycle professionals are typically performing the following types of activities:
- Exploratory Client Meetings
- Stakeholder presentations
In the “Grow” stage of the sales cycle professionals are typically performing the following types of activities:
- Account maintenance
- New opportunity identification
These subcategories can be broken down and tailored to meet the needs of the business.
Best Practices for Accelerating the Sales Cycle
While most things are easy to understand when you look at them from a bird’s eye view, the devil is in the details when you are working on determining the specific steps to include in your sales cycle.
As you go through the exercise of building your sales cycle approach here are a few key best practices to keep in mind to ensure that you are building a cycle that fits your business.
Ensure Your Sales Cycle Addresses the Needs of Common Stakeholder Personas
In many cases, modern buyers are making decisions by committee. That means your sales team needs a plan to engage with multiple stakeholders throughout the sales cycle.
Develop an understanding of your typical customer’s buying process and make sure that the steps in your sales cycle match the steps in their buying process.
If you know that your customers typically need you to bring in subject matter experts, or members of the executive team in order for them to feel comfortable moving forward with the sale, build meetings with SME’s and/or executive team members into the sales cycle. Even if your clients don’t demand these meetings, suggesting them could build trust and differentiate your team.
Assume Your Buyers Already Know About Your Product
The proliferation of information across the internet likely means a customer already knows something about your company or solution, more importantly, they already have an opinion. Consider this fact when you think about the early steps in the sales cycle.
It’s a best practice within the sales cycle for discovery to come before information sharing.
Your sales team should spend time with the customer, digging into their needs and business challenges before providing information. The positioning and information should be tailored to the customer to avoid information overload and demonstrate a conscientious effort on the part of the sales professional that will help build rapport with the customer.
Build Formal Coaching Sessions into the Sales Cycle
Not all sales cycle stages need to be customer-facing to be customer-centric. Behind the scenes, preparation is key helping sales professionals “show up” in front of the customer.
Build check-in points between sales managers and the sales professional into the sales cycle as a best practice to ensure that coaching occurs in real time. Ensure that the sales professional is providing an insightful and high-quality customer experience, and that the team has a plan to overcome any potential roadblocks throughout the buyer journey.
Ensuring the entire team is up to date on the status of the deal and working together to build trust and overcome challenges for the customer will help build momentum to the close.
Avoid Overcomplicating Negotiations
The purpose of a sales cycle is to build towards the close. Throughout the sales conversation, your sales team should be working to resolve objections and refine the terms of the deal – this way when the offer is on the table there should be limited surprises on each end making negotiations more streamlined.
Building in too many negotiations steps into the sales cycle has the potential to make negotiating more complicated than it must be.
Create Your Sales Cycle with Flexibility In Mind
Every buyer is unique and has specific needs that might not be best served by strict adherence to the steps of your organization’s formalized sales cycle.
Build internal checkpoints into the sales cycle to review next steps and make sure that the right steps are being taken, superfluous steps are being skipped, and new required steps are being added to make sure that the conversation is progressing with the client’s needs in mind.
Include Account Management and Growth Planning
The sales cycle is ongoing. Clients are buying more than a product of solution from your sales professionals, they are agreeing to be in a business relationship with your team.
It is important to give proper credence to the trust they have invested in your company by ensuring sales professionals remain present after a deal is signed.
Ensure the sales cycle includes specific steps for following up with clients, maintaining the account, and exploring opportunities for growth.
Finally, keep in mind that the sales cycle is a living part of your sales strategy, it should be reviewed and revised regularly to ensure it aligns with the needs of your customers and the needs of your organization.
Capture feedback on the steps that are helpful as well as the ones that are less helpful to define and refine what elements are important. Also, make sure that your sales process supports your sales cycle, and that you are using your sales funnel as a quantitative measurement of whether you are hitting the mark with your clients.
Interested in connecting with Richardson to improve the effectiveness of your organization’s sales cycle? Get in touch with us to see how we can help your team achieve its goals.