A sales cycle is the process a company follows to sell its products or services. The cycle starts even before a customer expresses interest. And it ends with referrals from happy customers who have made a purchase. 

While the sales cycle differs from company to company, most follow a structured process targeted at gaining new customers and closing deals with existing customers.

Synonyms

• Sales Process
• Buying Cycle
• Customer Journey
• Sales Pipeline
• Deal Cycle

Importance of sales cycle

Understanding the sales cycle allows businesses to close deals more efficiently. When you know the different steps on the cycle, you will know which ones need the most attention. 

Some steps move quickly while others cause delays. Analyzing each step allows companies to refine their approach.

For example, let’s say you discover that your sales cycle is twice as long as your competitors’. In this scenario, you are receiving leads twice as slowly. 

To fix this issue, you can look into the actions you take to complete a transaction. This will cover everything from identifying leads to providing customer support.

Next, you need to determine when leads are dropping off. You can do this by looking at the conversion rates at each step. If this reveals leads fall off at your sales presentation, then you know that’s the area that needs work. 

What are the Stages of a Sales Cycle?

These are the common steps in a sales cycle:

1. Find Prospects

During this stage, companies seek to identify potential customers who match their target market. These people are often referred to as sales-qualified leads (SQL). Focusing on customers who fit the target market improves the chances of converting them into paying customers.

There are several methods for finding prospects, such as:

• Searching job boards
• Engaging on blogs and social media
• Using Customer Relationship Management (CRM) software

2. Connect with Prospects

The next stage of the sales cycle is to connect with prospects from the first stage. This is a crucial stage because it builds trust and guides the prospect through the rest of the sales cycle.

You can use email or social media to do this. Many businesses start with a personalized email introducing their product or service and explaining how it can solve the prospect’s problem. Social media platforms also provide a great opportunity to connect with potential leads.

Other options include phone calls, or in-person visits, depending on the type of business.

3. Qualify the Prospects

Not every lead will be a good fit for your product or service. Qualifying prospects helps businesses focus their efforts on those who are more likely to convert into customers. This saves time and resources.

You can qualify leads with a discovery call. During a discovery call, salespeople ask questions to find out if the prospect has a genuine need for the product or service. This helps companies determine how they can meet those needs.

4. Present the Product or Service

After qualification, sales teams introduce the product as a solution to the customer’s problem. Some businesses create a pitch template that they use to explain the product and its usefulness to each potential customer. This pitch can be altered to fit the particular requirements or preferences of each prospect. 

5. Reassure the Customer

Prospects may need reassurance before making a purchase. They might want to learn more about the cost of a service or the functionality of a product. The salesperson should dedicate time to answer every inquiry from the prospect. Addressing these concerns builds trust and increases the likelihood of closing the sale.

6. Close the Sale 

The end goal of the sales cycle process is closing the deal. Here the prospect has made the decision to buy the product or service. Closing a deal might result in a bonus for the salesperson.

7. Follow Up

It is important to follow up with customers after a purchase. You need to make sure they are satisfied and have a smooth onboarding process. A quick phone call or email can serve as a follow-up. This lets the customer know that the company values their experience and gives them a chance to ask any questions or voice any concerns.

8. Generate Referrals

Making sure your customers are happy is an excellent way to get referrals and new business. Customers are more likely to refer a business to their friends and family when they are satisfied. You can also encourage previous customers to submit reviews by offering incentives. This can be discounts or rewards.

By optimizing each stage of the sales cycle, businesses can improve conversion rates, enhance customer satisfaction, and drive long-term growth.