Imagine if someone showed you how to do something and you had the chance to ask them questions while they were doing it.
You could learn in real-time, not by reading from a book or watching an hour-long set of videos on YouTube.
Well, that’s exactly what we’re offering you today. You’re going to learn how we create sales cycles for our company, MediaOne, and how we’ve been successfully implementing them.
Let’s get to it straight away, but after we’ve gotten a few things out of the way.
What is a sales cycle?
https://youtu.be/ZPsM-FH3imc
In simplest terms, a sales cycle is a series of events that lead up to a customer purchasing your product or service.
See, customers don’t just buy things out of the blue. It’s never a spontaneous decision. But a set of circumstances and actions that together lead to an inevitable purchase.
Sometimes this sales cycle is short. Other times, it’s long.
How a Sales Cycle Works
To understand how a sales cycle works, you first need to understand the different stages involved:
Stage 1 – Prospecting
Phase One of our sales cycle is when we’re prospecting. This stage includes everything that goes on before we pick up the phone and start selling to people.
Phase one is a numbers game, but not just in terms of volume; it is also about quality. It’s about identifying the right person to sell to and ensuring they are as close to qualified as possible.
This process may take a while, especially when you’re starting. It would help to go through your funnel a few times before you start hitting your target sale numbers each week.
It might be hard at first because it seems like you’re not making anything. But you’re building the foundation for your sales cycle.
Stage 2 – Qualifying
In Phase Two of our sales cycle, we’re qualifying leads. We want to make sure that the person we’re selling to is as close to a qualified sale as possible before picking up the phone.
Why is this important? Because picking up the phone and calling a close-qualified lead costs you less time than having to run after someone who isn’t even interested in your product or service.
It’s better for everyone if leads move from Phase One to Phase Two as soon as possible. But when it comes to Phase Two of our sales cycle, we’re also looking to see whether the person is ready to buy.
Stage 3 – Qualifying Your Sales Team
Phase Three of our sales cycle is where we qualify our sales team, ensuring that everyone knows how to approach potential customers and sell our product or service.
We also determine who will be assigned to what role during in-person presentations.
Phase Three of our sales cycle also includes determining when you’ll make your first contact, whether you want to call them immediately after qualifying or if you want to wait until the next day.
Stage 4 – The First Call
In Phase Four of our sales cycle, we contact a prospect and make that first sale. It is where the magic happens; this is when your hard work pays off.
At this point in our sales cycle, we’ve ensured that our prospects are as close to qualified as possible and that everyone on our sales team is ready to make an in-person presentation.
Phase Four is also where most companies stop their thinking. They figure that if they can get someone on the phone or face-to-face, everything else will take care of itself.
Yes, that’s true, but only to a certain extent. If we stop our thinking at Phase Four, we’ll create gaps in the sales process that can cause us to either lose sales or make bad impressions on customers.
Stage 5 – The Presentation
In Phase Five of our sales cycle, we present the product or service to the customer.
If we’ve done everything else right up until this point, then this is where we make our first sale and start generating repeat business from the new client.
Phase Five of our sales cycle can be formally broken into two parts: the presentation itself and what happens afterward.
Many companies stop their thinking after Phase Four, but we mustn’t ignore what happens afterward. The actions we take and the reputation we cultivate in this phase can impact how successful our business will be down the road.
Stage 6 – Follow-Up
After you make your first sale, be sure to follow up with the customer.
This is Phase Six; it’s where we maintain our reputation and make sure expectations are met, if not exceeded.
We have to ensure each customer receives the exact product or service they need to accomplish what they had initially set out to do.
Stage 7 – Customer Retention and Referrals
In Phase Seven of our sales cycle, we’re on to customer retention and referrals.
It is where we take the information that we’ve gathered from each customer and use it to craft a plan for long-term success with them. We need this because if we do a good job in Phase Five, the initial sale will only be the first of the many sales we’ll be making in the future.
Phase Seven can be broken into two parts; first, we’ll want to implement a plan to keep in touch with the customer. Second, we want to craft a plan for getting more sales from them in the future.
Stage 8 – Customer Feedback
Phase Eight of our sales cycle is an important one. It’s where we determine if we need to make any changes to how we do business with each new client. It’s also where you develop customer feedback surveys that can be sent out to customers every once in a while.
Sales Cycle Length
Sales Cycle Length refers to the length of time it takes to make a sale from start to finish. Of course, this isn’t an exact science because it can change depending on your industry, location, and the customer in question.
Why Does it Matter?
A well-defined Sales Cycle Length is important for several reasons:
- It creates transparency: When you have a defined sales process in place, everyone will know what to expect and when to expect it.
- Allows You to React Quickly Enough to Opportunities: It’s a guideline for how long some things take. It calls for you to react quickly enough to capitalize on opportunities, on top of acting as a good starting point for how long things take and what happens along the way.
- Track and Monitor each Salesperson’s Progress: It also makes it easier to track and monitor each salesperson’s progress.
- Estimate How Long a Sales Cycle is Likely to Take: You can see how long the sales cycle ran from start to finish and determine if that was longer or shorter than usual based on your standard Sales Cycle Length.
If something takes a lot longer than normal, this is an alarm signal that something isn’t quite right. It would help if you looked at what is causing that delay.
- Find Out if You Have a Good Lead On Your Hand: It also makes it easier for salespeople to know when they have a good lead on their hands.
With Sales Cycle Length, you can now easily tell if the person you are talking with has what it takes to become a customer or not. Most likely, your contact will fall into one of these three categories:
- A Contact that wasn’t a prospect and who you shouldn’t have wasted your time on – they’re a dormant group. Nothing happens at each stage with this group of contact.
- Contact that has the potential to become a customer – When a contact takes an interest in what you’re doing, then it shows that they may be worth pursuing.
- Contact that has no potential to become a customer — With this group of contacts, your sales cycle will come and go with nothing happening each time you move from one step to another. It’s a waste of time because it becomes obvious early on that this contact shouldn’t be pursued further.
You don’t necessarily need all the eight stages of a sales cycle. At times you may find that your sales cycle is complete with only five stages or so
A recent CSO Insights study found that 30% of companies prefer a 4 to 6 months sales cycle length. It’s the ideal sales cycle length for most companies, with some opting for longer or shorter ones.
Factors Influencing a Sales Cycle Length
Here are some of the factors that influence a sales cycle length:
- Your target markets
- Your ICP
- Your sales process and how effective it is (you need to learn how to fine-tune it)
- Your sales team competency
- Your product/service price
The Different Types of Sales Cycle Lengths
Here are three common types of sales cycle length:
Conventional Sales Cycle – the most preferred sales cycle length. It ranges from 3 to 6 months.
Long/Short Sales Cycle: While a short sales cycle runs for less than a month, a longer one can run for 12 months or so.
In other words, any sales cycle that runs for less than three months is a short sales cycle, while any sales cycle that runs for more than six months falls under long.
Complete Sales Cycle: A complete sales cycle isn’t measured by time but the entirety of the sales process stages.
Note that a sales cycle doesn’t always have to be short. There are times when your sales reps may be forced to take additional steps, and there are times when they may find it convenient to skip some.
A complete sales cycle goes through all the necessary stages or steps and can take up to a year.
Sales Cycle Vs. Sales Process
A Sales process doesn’t refer to the same thing as a sale cycle.
While a sales process refers to steps, methods, and approaches to achieve sales productivity, a sales cycle refers to the specific steps you undertake in a sales process.
A sales process follows seven steps, while a sales cycle is specific to a company.
The 7 Steps of a Sales Process
There are seven steps to a successful sales process:
Step 1: Prospecting and Qualifying
Before you plan a sale, you need to do a little bit of digging around or research. Try to identify companies or individuals that might be interested in your products or services.
Otherwise referred to as prospecting, this is the fundamental first step of your sales process.
It demands that you identify who qualifies as a lead. In which case, a lead refers to anyone with the willingness and potential to buy what you’re selling.
A qualified lead becomes a prospect, hence the term prospecting.
Step 2: Preparation/pre-approach
Companies start prospecting by formulating an Ideal Customer Profile. The preparation stage includes researching information about the ideal customer profile and preparing content for the presentation. This step usually takes place before meeting with prospects.
Step 3: Approach
In the third stage of the sales cycle, salespeople approach prospective buyers. It’s where you contact your target audience via phone, emails, cold calling, and any other preferred method of choice.
Step 4: Presentations
In this phase, salespeople present their products and services to prospective buyers. Depending on the type of industry and audience, they may use presentations like PowerPoint slides, videos, demos, etc.
Step 5: Handling Objections
Objections occur when there is something wrong with what was presented earlier. That could mean that the prospect doesn’t like the price point, it isn’t exactly what they wanted, or maybe they hadn’t realized they could get a better deal elsewhere.
Step 6: Closing a Sale
Closing refers to making the sale. During this phase, salespeople present all the benefits of buying from them over any competitor. They emphasize why the prospect should choose them over anyone else.
It may also mean receiving an order or closing an agreement, signing a contract, sending invoices, receiving payment, etc.
Step 7: Follow Up
After closing a deal, you have to follow up with the customers and make sure they’re happy and satisfied. That ensures they’ll refer you to others who need similar products or services.
3 Best Practices for Sales Cycle Management
To speed up the sales process and shorten the time it takes to close a deal, you must first figure out how to manage your sales cycle. You can start by taking a deeper look at each stage and identifying all the stages taking longer than expected to move your leads or prospects down your sales funnel.
Here are three ways to improve your sales cycle management:
1) Track Conversions Between Each Sales Cycle Stage
The point is to ensure each stage takes as little time as possible.
You need to look at each stage to see if there are any bottlenecks slowing things down. The easiest and most effective way to go about it is by tracking the conversion rate happening at each stage.
Do this to identify which steps in the sales process are taking too long or require more attention. For example, if you find that only 10% of your leads reach the final stage, you might have to work harder to increase those numbers.
2) Use a CRM to Manage Your Sales Cycle
A good CRM tracks every lead through its entire journey. From the first interaction to the last call, you should be able to keep tabs on everything.
If you’re using multiple tools, see if you can combine them into a single tool to avoid losing data between the different platforms.
3) Try to Close Deals Quickly
To shorten your sales cycles, it might help to close deals quickly. It might seem counterintuitive because you think you need to spend some extra time getting to know your customer before you can go ahead and offer them a solution.
Only wait when it’s necessary. You may not have enough information yet, or maybe your prospects are just looking for someone else to solve their problem. In either case, waiting isn’t going to get you anywhere.
Ways to Improve Your Sales Cycle Process
So, how do you improve your sales process and speed up a sale? Here are seven ways:
1) Start With The End Goal In Mind
Before you start working on any part of your sales process, make sure you understand what you ultimately hope to accomplish by completing each step. This way, you’ll avoid wasting time doing things that don’t move you closer to reaching your goal.
2) Focus On What Matters Most
Look at your sales funnel from top-to-bottom. Does it feel like something important is missing?
For example, maybe you only send emails after you’ve scheduled an appointment with a prospect. Or perhaps you never follow up with customers who haven’t purchased anything in over 30 days.
These are some of the things you should fix.
By focusing on the most critical parts of your sales process first, you’re likely to see significant gains right away.
3) Make Sure Everyone Is Doing Their Part
It’s easy to blame others for why certain steps in your sales process take longer than expected. But if everyone involved does their job properly, then no one will feel like they have failed.
You have to make sure your team members know their responsibilities so that nothing falls through the cracks. And while you’re responsible for making sure everything goes smoothly, be careful not to micromanage every single detail.
4) Keep Track Of Everything That Happens During Each Step
A common mistake people make in the early stages of their sales cycle is, failing to track what happens during each stage. If you don’t record key details about each interaction, you risk forgetting crucial pieces of information later on.
Learn to use tools such as Google Docs, Evernote, Trello, etc., to manage your leads throughout their lifecycle. These apps allow you to easily store notes, documents, images, videos, audio files, links, and more.
5) Use Automation Tools When Possible
Automating tasks helps eliminate errors, as well as save valuable time. However, many companies struggle with automating processes because they lack the technical know-how and experience.
If you want to automate your lead generation activities, consider using software solutions such as HubSpot CRM, Marketo, Pardot, Pipedrive, Zoho Campaigns, and MailChimp. They provide powerful features that you could use to create automated campaigns based on specific criteria.
6) Don’t Shy Off from Asking Questions
Asking questions can be intimidating because it seems like you might come across as incompetent. But asking lots of questions shows confidence. It also builds rapport with potential clients.
Don’t hesitate to ask open-ended questions when talking to prospective clients. You may not always receive answers, but this approach allows you to learn more about your prospect’s needs and interests.
7) Have A Plan B In Place
It helps to plan for any unexpected situations that could arise while working towards closing deals. That includes things like:
- Preparing backup plans in case your main strategy doesn’t work out.
- Having contingency strategies ready in case your initial campaign fails.
8) Have A Plan B In Place
It helps to plan for any unexpected situations that could arise while working towards closing deals. That includes things like:
- Preparing backup plans in case your main strategy doesn’t work out.
- Having contingency strategies ready in case your initial campaign fails.
9) Think Long-term
Plan how you’ll handle various scenarios before they happen so that you don’t have to worry about reacting quickly to changing circumstances. For example, think about how you’d respond if a client canceled an appointment without giving notice. Or imagine how you’d react if someone asked for additional services after signing up for your service.
9) Set Realistic Expectations
It’s important to set realistic expectations at the beginning of the sales process. Otherwise, you run the risk of being disappointed by the results.
10) Stay Positive!
Finally, stay optimistic no matter what obstacles get thrown your way. Remember, there will be setbacks along the way, but staying focused on the end goal will ensure you get there.
11) Always Follow Up with Clients After the Sale Is Complete
That is one of the most overlooked steps in the sales cycle. Many people assume that once their deal closes, everything else stops – that’s so wrong of them.
After the sale is complete, be sure to follow up with all customers who signed up during the past month. Send personalized emails thanking them for choosing your company and providing helpful resources. You also want to send reminders regarding upcoming events.
12) Keep Your Sales Process Simple & Easy to Understand
Try not to overcomplicate anything. If something isn’t clear, be sure to clarify it right away.
3 Sales Process KPIs You Should be Using
You have a thousand and one reasons to track your sales cycle.
Not only that, you should track each part of your sales process. But that doesn’t mean you have to go overboard with it.
We recommend using the following three KPIs because they give more generalized but important insight into how you are doing:
1) The Number of Leads You Generate: The more leads you have, the better your chances of closing a deal.
However, it’s not just about the number of leads you have, but their quality. Come to think about it; there is no point in generating 100 leads per month only to discover that 90 of them are not right for your business.
For this reason, you might want to use a tool such as HubSpot’s Lead Scoring System, which helps you filter out low-quality leads from high-quality ones easily. It also allows you to prioritize the most converting leads.
2) The Number of Leads That Convert into Deals: If you have a proven sales process, then it’s easier for you to track how many of the leads turn into paying customers.
If this number is high enough, then the chances are that you have a better-than-average sales process in place.
3) The Number of Deals Closed Per Month: This number tells you how busy your team members are. It can also reveal whether your processes and strategies are working out or not.
For example, if you don’t have enough qualified leads coming in, then it means that your reps won’t have anything to do. That is why you should try to balance the number of leads and the number of deals closed.
If you have too many qualified leads coming in, then your team members will probably be working overtime to close more deals each month. It may also reveal a problem if they are failing to follow up on their leads effectively. To find out what is causing this imbalance, break down your strategy into steps and pinpoint where you are going wrong.
Sales Cycle in Action
If you’ve been reading up on all the strategies that come under the umbrella term “sales cycle,” you probably have a better idea of what to do. To sum it up nicely:
- Create your sales cycle based on what works for you.
- Use it to optimize your marketing, sales, and lead generation activities.
- Track its effectiveness using the three KPIs listed above.
To put this “sales cycle” into action, let’s take a look at how HubSpot uses it to increase its business.
HubSpot’s Sales Cycle
To close leads, HubSpot first uses its inbound training system to set up the right expectations. It then uses a sales automation system that covers all areas of the sales cycle. It does this by:
- Identifying qualified leads and sending them emails based on the scores generated by their scoring system
- Tracking leads, building relationships with them, and closing deals using Salesforce CRM
- Helping sales reps generate qualified leads by setting up marketing campaigns based on what works for their business.
According to HubSpot’s VP of Marketing, Mike Volpe: “HubSpot has a very aggressive inbound sales process completely integrated with how our marketing team works. If you can marry your marketing and sales efforts, then there’s a huge opportunity for success.”
Have you created a sales cycle that is working for your business? What are the top factors that make it work? We can talk about it in the comment section.
4 Common Sales Process Mistakes and How to Fix Them
No matter how you slice it, the sales process is a big part of your business. It determines how effectively and efficiently you can sell to potential customers and which customers you should be targeting in the first place.
By incorporating a sales process into your business, you’re telling your team that there is some method behind the madness and that they need to adhere to it. Without one in place, opportunities for improvement are limited – and so is your growth.
So what exactly is this magical sales process? It’s essentially a detailed plan that breaks down your sales process into each of its necessary stages and defines what comes with each stage. From prospecting to closing deals, everything is covered by this carefully crafted plan.
For example, you can have an initial phone call with a qualified lead, which leads to the client meeting your team members in person, leading to an offer being made, and closing a deal.
Since sales processes are so integral in the everyday running of your business, you must get yours right from the get-go. By factoring these common mistakes into your process, you can quickly determine what needs fixing and ensure that every stage in the sales process gets as close to perfection as possible.
The four most common flaws found in sales processes include:
Mistake #1: Assuming you know what your prospect is thinking:
Often, sales professionals assume that the customer will come right to them without doing anything, provided they do their job well. That’s a completely wrong approach to take if you ask.
With sales, thinking you know what your prospect is thinking and getting their needs right is a big mistake. In many cases, your prospects will ask for all sorts of things without even knowing if they need them in the first place.
Did you know that as much as 86% of customers have at one time asked for a feature that they didn’t need?
How To Fix It: Force your prospects to pick between two choices instead of choosing from an open-ended list.
Let’s say that your client is looking for a new software solution to help manage their operations. Instead of asking what they specifically need, ask them to choose between two different solutions:
- A mobile-responsive CRM that will allow them to access orders from anywhere and make customer service easier.
- An inventory management system that allows them to restock faster and cut down on the amount of time wasted each day dealing with this task.
By using this strategy, you’re forcing your prospect to think about what they want from a solution instead of asking for every single feature under the sun!
Mistake #2: Failing to define roles and responsibilities within the team
In most companies, each sales team member has a well-defined role to play. For example, there’s usually a Sales Manager in charge of ensuring all sales team members follow proper procedures throughout the sales cycle. There’s also a Sales Trainer who is in charge of training the sales team on what to say and do at all times.
When your company doesn’t have a clearly defined role for everyone, there will be confusion about who does what.
How To Fix It: Make sure that each team member knows their role in the sales process and can easily access everything they need to get it done effectively.
Mistake #3: Not ensuring your teammates are consistently following the process from start to finish
While it’s a good thing for members of your sales team to feel like they are in control, allowing each one to come up with their own sales process can prove problematic. For example, let’s say you have a lead who starts the conversation by saying they want to talk about price right away.
In this case, one of your team members might address the conversation head-on and ask them to talk more about what they need before they get into the topic of price. While this person might think they are helpful, this is most likely a dead-end conversation because the client is focused on price and nothing else!
How To Fix It: Create your own sales process for everyone. You also want to ensure they’re all following it.
Mistake #4: Failing to keep everyone in sync
When your entire sales team follows a single process, it’s easy for them to stay on the same page. However, if there are multiple processes that certain members are following, then they’re likely to get mixed up very quickly.
For example, one of your team members might think that they’re supposed to send a certain follow-up email because they remember reading about it in the sales process you gave them. However, another team member might already have a different strategy for sending this email because their sales process happens to be slightly different.
Having this happen can cause your team members to end up sending follow-up emails at the wrong time, which can ultimately hurt your sales process.
How To Fix It: Keep everyone on the same page by providing each member with access to the same sales process all of the time. Most sales tracking software platforms will let you upload new versions of your sales procedures whenever necessary, so your team members will always have access to the most up-to-date information.
