Sales Cycle: 7 Steps to Close More Deals

“Sales is an outcome, not a goal. It’s a function of doing numerous things right, starting from the moment you target a potential prospect until you finalize the deal.” , says Jill Konrath, a widely recognized thought leader in the sales field.

What if I told you that there are well-defined steps you can follow to successfully close sales while simultaneously improving your sales process? Whether you believe me or not, such a method does exist - it’s called a sales cycle. Keep reading and find out exactly how!

‍What is a sales cycle?

The sales cycle, to put it simply, is a set of procedures that help sales teams successfully close more deals.

The sales cycle is divided into seven stages. They are prospecting, making contact, qualifying prospects, nurturing prospects, presenting the offer, handling objections, and finally, closing the sale. Each stage of the cycle plays a significant role in determining the final outcome.

What are the different kinds of sales cycles?

Short Sales Cycle

Let’s say a company is looking to purchase a team communication tool and has to pick from a bunch of options such as Slack, Microsoft Teams, Rocket.Chat, Google Chats, etc.

Depending on their team size, budget range, and usage, they decided to choose Slack. As this would not have taken them a long time to decide, this would be considered a Short Sales Cycle.

Short Sales Cycles involve fewer steps and generally take less than a month to complete. The reason this is a faster process is because customers are already aware of the company and their services. Hence, they don’t need a huge amount of time to come to a decision.

These allow companies to reach more customers and achieve a larger amount of sales, which in turn leads to greater revenue.

However, a large number of customers could also mean not enough time to invest in each client and their needs. You might miss out on a customer’s specific requirement or might compromise on the quality. As a result, some customers may have an unsatisfactory experience because their needs are not met.

Long Sales Cycle

Let’s look into an example of a long sales cycle:

A company is looking to buy HRMS software for their human resources and talent acquisition teams. In order to select the right software for the company, the HR team would now have to consider processes such as talent acquisition, terminations, employee onboarding, performance management, workplace safety, etc. This would involve a great deal of planning and decision-making and is hence a lengthy process.

As is evident from the example, this is a long process. These usually have a high payoff as they involve expensive deals with larger companies. Since a long sales cycle takes a longer period of time, companies are able to better understand their clients' needs and cultivate closer bonds with them, winning their loyalty in the process.

An obvious disadvantage is that it is time-consuming and can often consume a lot of company resources. Since it is such a long process, there's also a lot of uncertainty as to whether the client will actually buy from you or not.

What are the different stages of a sales cycle?

Prospecting: Finding your fish in the sea

You must have come across this famous line: “There’s plenty of fish in the sea."

But in reality, not all those fish are worth catching. It’s similar for sales, i.e., it’s important to find the lead that’s most likely to buy your product or service. In fact, not every prospect is going to benefit from your product or even be able to afford to buy the same. Hence, it becomes crucial to research and identify a prospect that’ll actually generate sales.

Initiating contact

The second step is to make contact. It’s important to have done some research on your client otherwise, your email or phone call to them would just become another addition to their spam folder. 

Understand your prospect well and move forward with the best possible approach. Decide whether it’s best to email them, make a phone call, or send a message on LinkedIn. You’ll have to find out where they’re most active to make the right choice. 

Qualifying prospects

Once you’ve initiated contact, the next step is to segregate leads that fit your Ideal Customer Profile (ICP). This is a crucial step in helping you decide which prospects are actually qualified to use your product and will benefit from the same. It’s also necessary to eliminate/keep aside the list of prospects who just don’t fit the criteria. There’ll also be a list of prospects who don’t fit the criteria at the moment but might in the future.

An example of the same would be making a discovery call after initial contact. Let’s use a scenario to understand this better.

The above steps are different as per the type of your business.

Nurturing prospects

Nurturing prospects involves educating them about the product or service and addressing any concerns they may have. Some leads may be willing to sign the deal immediately, some may agree to sign up at a later date, and some may need some time to consult with their team and then make a decision. In each case, it becomes imperative to consistently follow up. 

Nurturing prospects involves consistent communication with them until the deal is signed. A customer who isn’t willing to make a purchase today could be ready sometime in the future. So, it’s important to always stay in touch with them.

Presenting the offer: Luring them in with a bait

This is the stage to talk about your product/service. Bring out your best presentation and demonstration skills to convince them about the benefits of your product or service. Visuals and social proof act as important tools during this stage, and adding them to your presentation becomes a major plus point. It’s also necessary to address possible queries the client may have and incorporate new ones into other presentations in the future.

Handling Objections

Now is the time to keep a calm and clear head and listen to your clients’ queries with regards to pricing, scalability, compatibility, etc. and give out answers that convince them to sign the deal. It’s essential to address every query in detail and ensure that your client understands exactly what you want to convey. This will also ensure that any discrepancies are avoided later on.

Here are some more examples of objections and how you can handle them:

Suppose a client expresses scepticism about the effectiveness of a service. A response to this objection could be:

Suppose a client is interested but has expressed concerns about pricing. A response to this objection could be:

The salesperson emphasises the value and ROI of the solution to justify the investment.

Closing: The final catch

You’ve played your cards right so far, and the moment that you’ve been eagerly waiting for is finally here. During this stage, it becomes crucial to ask the right questions, listen actively, and address any remaining queries that your client may have. This will avoid any roadblocks and lead to a successful closure of the deal.

Another significant part of this period is to create a sense of urgency with the client and compel them to close sooner. An example of this would be offering them an exclusive offer they simply can’t reject. If you can match the Coldplay concert’s hype in India, you’re good to go!

There are multiple other ways to close a deal, depending on the situation at hand. 

Why is the sales cycle important?

The sales cycle is a useful tool in generating better leads and closing deals sooner. Here’s a bunch of reasons why:

Identifies loopholes

Following the sales cycle allows you to identify loopholes early on and remedy them. Since a set of well-defined steps is followed, there is scope for improvement at every stage. 

Here’s a scenario to address an issue with regards to insufficient lead qualification.

Scenario: The sales team is spending too much time on leads that do not convert.

Action: Analyse lead sources and qualification criteria.

• Identification Process: Review lead conversion metrics and identify sources with low conversion rates. For example, if leads from a specific advertising campaign rarely convert, it may indicate poor targeting or messaging.
• Outcome: Adjust qualification criteria to focus on leads that fit the ideal customer profile better, improving the quality of leads passed to the sales team.

Aids in developing new sales strategies

Following the sales cycle gives businesses the opportunity to develop better sales strategies. These strategies will allow them to give customers a more fulfilling and satisfactory experience. This, in turn, will boost sales. 

The example below explains how the sales cycle aids in enhancing training and development of sales reps.

Example: During the objection handling phase, sales teams document common objections encountered during calls.

Strategy Development: Analysing these objections helps identify areas where sales representatives may need additional training.

• Outcome: Developing targeted training programs to address specific objections and improve overall sales effectiveness. For instance, if many prospects question product reliability, training could focus on addressing this concern with data and case studies.

Creates better customer experience

The sales cycle ensures that customers' needs are taken into consideration every step of the way. Since every step is well aligned and structured, there is no negligence with regards to customers’ queries, and all needs and expectations are addressed properly.

Stages in the sales cycle, such as handling objections and presentation of the offer, ensure that clients have the opportunity to bring up any hesitations they may have with regards to the products offered.

Example: During the prospecting phase, sales teams research potential customers to understand their needs and preferences.

Customer Experience Enhancement:

• Action: Sales reps use data analytics and customer segmentation to identify leads that align with their ideal customer profile.
• Outcome: This leads to more relevant outreach, where prospects receive personalised messages that address their specific pain points, making them feel valued and understood.

Prediction of future sales

The detailed data from the sales process can help better predict future sales. For example, this data can be used to identify the numbers of sales each rep can make in a month based on the average length of the sales cycle and thereby foresee which sales will most likely succeed after making it to a specific step in the buyer’s journey.

Example: Sales teams gather data on potential leads during the prospecting phase.

Predictive Sales Benefit:

• Action: Reps log information about leads, including industry, company size, and initial interest levels.
• Outcome: Analysing this data over time allows the organisation to identify patterns in successful lead types and refine targeting strategies, leading to more accurate forecasts of which segments are likely to convert.

A roadmap for training new sales reps

A designated sales cycle will accelerate training by offering a well-defined roadmap for new sales reps to follow. They can easily understand the selling process and discover areas they need to improve in.

Example: During onboarding, new sales reps receive an overview of the entire sales cycle.

Training Benefit:

• Action: Trainers explain each stage of the sales cycle, emphasising its purpose and importance.
• Outcome: Reps gain a clear understanding of how their activities fit into the broader sales process, setting a solid foundation for their training.

Methods to improve the sales cycle

Tracking KPIs

It’s essential to consistently track KPIs such as stage-by-stage conversion rates, the aggregate conversion rate, and the attrition rate at each phase and note any areas of improvement. This will lead to the creation of more efficient sales.

Here’s an example that explains how tracking the Sales Team Performance Metrics is fruitful in generating better sales.

Example: Analysing individual and team performance against sales targets.

Impact on the Sales Cycle:

• Action: Track individual rep performance, including quota attainment and win rates.
• Outcome: Performance data can identify high and low performers, enabling tailored coaching and support for underperforming reps, leading to overall sales cycle improvement.

Automate repetitive tasks

Automating certain repetitive tasks helps sales reps to invest their time in high-value tasks such as scoring better leads and building customer relationships, thereby improving the overall sales process.

Task management automation assists sales reps, and here’s how:

Example: Automating task assignments and reminders for sales reps.

Improvement:

• Action: Using CRM systems to automatically assign follow-up tasks to sales reps based on lead interactions (e.g., scheduling a call after a demo).
• Outcome: This reduces the risk of forgetting important follow-ups, ensuring that leads are nurtured consistently and efficiently.

Build strong connections

“To build a long-term, successful enterprise, when you don't close a sale, open a relationship." –  says Patrcia Fripp, the first woman to become President of the National Speakers Association.

It is important to keep opening and maintaining consistent and strong relationships with customers. There’s a huge possibility that someone who isn’t a potential client today may become one tomorrow.

Example: Leveraging existing relationships for referrals.

Improvement:

• Action: Sales teams actively seek referrals from satisfied customers, encouraging them to share their positive experiences with others.
• Outcome: Referrals typically come with a higher level of trust and credibility, leading to warmer leads that are more likely to convert, thus improving the overall efficiency of the prospecting stage.

Active listening

There’s a lot one can learn by simply paying close attention. When a client puts forth their needs and requirements, active listening will enable you to come up with an effective solution. Sometimes when clients say that they’re not interested, what they really mean could be that they want a lower price. 

Never underestimate the power of success stories and testimonials

People love listening to stories, especially success stories. Adding case studies, success stories, and testimonials will act as a convincing tool in the selling process. If your product or service has made a huge difference for a client or business, don’t miss out on mentioning it. But don’t overdo it because it might look like you’re trying too hard and the client may hesitate to buy.

Streamline the sales process

In order to improve their sales cycle, businesses should work to streamline their sales process. This involves discovering potential roadblocks and working towards removing them. 

Example: Creating a sales playbook.

Improvement:

• Action: Developing a comprehensive sales playbook that outlines best practices, scripts, and procedures for each stage of the sales cycle.
• Outcome: This standardization ensures that all team members are aligned in their approach, reducing variability and confusion, which leads to more consistent and effective sales efforts.

Regular analysis of the existing sales cycle

Another way to ensure efficiency in sales is to keep updating and analysing the existing sales cycle. Make it a habit to note every new thing that comes up and how it can be used to elevate the existing cycle. 

For example, if during a presentation a client brings up something crucial with regards to pricing or quality, ensure that your future presentations with other clients include this new detail.

Follow up: The only F word that matters

It’s a known fact that closing sales is a tedious process. Clients may move on to a different product or may even completely forget about your interaction if you don’t remind them often. 

For example, if a client is willing to buy your product but they already have a contract of 3 months with another business, it’s important to make a note and reach out after 3 months. It’d be too bad if you missed out on a really good deal simply because you forgot to follow up. Set reminders and keep following up diligently.