A complete guide to Sales Cycle Management

 

Different companies have varying definitions of their sales cycles due to many factors such as industry type, target markets, and types of customers. Because of this, they follow different steps and activities up to deal closing. 

In this guide, we’ll take you through the various steps of a sales cycle and share several tips and best practices you can use to improve your sales process.

What is a sales cycle and why is it important?

A sales cycle is a process your company undertakes when selling a product or service to a customer. Think of it as a series of steps that lead you up to a sale.

Sales cycle is important for the following reasons

Training process made easy

Having a well-defined sales cycle makes it easy for you to train new sales reps. You’ll be able to provide these reps with a structured roadmap, which lets them get used to your process.

Team structuring done right 

On top of that, having a better understanding of your sales cycle also empowers you to structure your team more effectively. Say you’ve analyzed your sales cycle, and you’ve realized there’s a bottleneck when it comes to following up with leads. Naturally, you’ll want to re-assign roles to your team to ensure that enough is being done at this step.

Stay on top of team performance

Additionally,  keeping track of your sales cycle also helps you to better evaluate your team’s performance. If the average length of your sales cycle is decreasing month-on-month, it  means that your team is effectively closing their leads in a shorter period of time, which is great news. It’s also worthwhile to benchmark the length of your sales cycle against that of your competitors, so you can see how you’re stacking up.

Sales cycle stages

Every company has a sales cycle and they’re unique. But, there are a few steps that are followed by a majority of them. The leads generated from your marketing automation tool get transferred to your sales team and this puts the sales cycle in motion. On the other hand, some companies follow outbound sales strategies in tandem with inbound, and this involves cold calling and emailing, door-to-door visits, and more. 

In addition, 

First off, it is important to identify your sales cycle stages and come up with key metrics you can use to measure your team’s performance at each step.

The sales cycle stages can, however, differ based on the following factors:

Bryce Sanders, President at Perceptive Business Solutions sums up the initial process of finding your sales cycle effectively:

He says, "it's easy to figure out your own process. Let's assume it's face to face sales. The first step is talking to someone. The next step is getting in front of them. In the financial services industry, you gather information, then present a proposal. Gathering the data might take place in the second step. The third step is returning with a proposal and presenting it. The 4th stage is asking for the order when they go from prospect to client. That's oversimplified, but it's a basic process [of coming up with your own process]".

We stick to the following steps at Freshworks, and guess what? Using and sticking to this sales cycle has helped us build a solid pipeline. Here’s our seven-step B2B sales cycle. 

1. Sales prospecting

The sales cycle begins when your salespeople start the prospecting process. 

During this process, your salespeople can leverage information from the following channels to help them out:

The first step is to have an ideal customer profile (ICP) and stick to it. If you don’t have one already, go ahead and create one. This basically contains information about the potential clients you’d like to reach out to and how to approach them. Include information like their personal background and pain points. This will help you look for attributes beyond just demographics, interests, or associations.

Next, have a common term to describe your leads. Some companies like to call interested leads “prospects” and some just call them “leads”. Then, bucket the ones you think may be interested in your business as “probables” or “likely”. The nomenclature depends on your company and what you’re most comfortable with.  
Now, you might think this stage is similar to lead generation. In reality, it’s much more than just that. With lead generation, you merely collect the contact information of your leads, whereas, with sales prospecting, you’re actually reaching out to these leads and establishing whether they’re interested in your company or not.

2. Making contact

Once you start having a steady inflow of leads, you have to start contacting them. Although, before you decide how you want to make contact, you’ll have to assess them and determine which stage of the buyer’s journey they’re in. 

Say your lead has given you their contact information in exchange for an eBook download. At this point, they are gathering more information on how to resolve their pain points at a ground-level and may not be looking to purchase yet. In this case, reaching out to them via email and nurturing them is important before you even call them or try to schedule an in-person meeting. 

What if your lead has filled out a form on your website requesting a quote or a product demonstration?

This is a clear indication that they’re ready (or almost ready) to make a purchase and it makes sense to give them a call. 

You need to call your leads in a timely manner. According to stats, 30-50% of the sales go to vendors that get in touch first with the prospects. Let that sink in. And, this doesn’t mean that you can get back to your leads in 24 hours, because that simply won’t cut it. To have the best chances of converting the lead into a paying customer, you should call them back as soon as possible.

If your leads don’t answer your calls, don’t worry. It usually takes around 8 to 12 attempts to reach a lead on the phone—so keep trying. 
While we know that the best times to contact leads are Wednesdays and Thursdays between 4 and 6 pm, try to switch your timings up as well. If your leads have their Wednesday afternoons dedicated to weekly strategy meetings, you won’t get through to them, regardless of how many times you try.

3. Qualifying the lead

After you’ve made contact with your lead, the next step is to qualify them. Are they the right fit for your business? And vice versa, is your business equipped to meet their needs? 

You may have already done some pre-qualifying in the previous step of the sales cycle. 

For example, your webform may have fields like the size of the company or annual revenue. If they haven’t provided this information, a quick LinkedIn or Crunchbase search of their company can give you this information. 

After this, if you’re certain that your lead fits your ICP and is capable of making a purchase, make a discovery call to them to understand their needs and pain points better. 

If not, ask them some questions that can help you assess how well they fit into your typical buyer profile. Many companies use the budget, authority, need and time (BANT as it is most commonly referred to) methodology. 

These are some questions you can ask your leads: 

Getting an idea of your lead’s budget is particularly important for companies whose products or services are priced at a premium. You wouldn’t want to spend three months nurturing your lead, only to find out that they don’t have the budget to make a purchase with your company.

4. Nurturing the lead

If your lead is not ready to buy immediately, start nurturing them to slowly move them down your sales funnel. 

A common mistake that companies make is trying to “force” a sale. Anybody can sell, and in most situations, your prospects don’t want this near the end of the consideration stage. Your prospects merely want to be treated in a personalized manner and not just another person you’re selling to among many. 

At the end of the day, they are the decision-makers. So go ahead, don’t push, but rather send them useful resources like eBooks, articles, or case studies that can help them make a decision. You can do this by setting up email campaigns that can ensure these resources reach their inboxes in a timely manner. You can also target them through Google, Facebook, and LinkedIn ads.

5. Making an offer

By now, your prospect would’ve started visiting your pricing page, or if you’re lucky, would’ve signed up for a product trial. By doing this, they’re showing intent to purchase. 

Analyze the following:

6. Handling objections

Once you’ve made your offer, the ball is in your lead’s court. There are chances that they’ll push back, and surface one or several objections to you, such as:

Your job is to handle these objections, and convince them that choosing your company is the best solution for them. 

If your lead says that the price of your product is on the high side, do the math and tell them how much return-on-investment (ROI) your product will bring them (or how much costs it’ll save). 

If they’re worried about getting their team to adopt new technology, tell them about what your company can do in terms of setup and training, and talk about your easy-to-use support channels.

7. Closing the sale

Once you’re done handling your lead’s objections, it’s now time to close the sale. 

After ensuring that you’ve prepared the paperwork and forms, go ahead and ask your lead a closing question. Find out the right time for implementation. This is known as a direct approach. 

On the other hand, if they aren’t responsive due to last-minute changes to their plans or other circumstances, go for a softer approach. Restate how the product can help address their pain points, and probably send them the case study again for some real-life growth your product brings to the table. 

Your approach depends on the temperament of your lead. You should have a good read on this person by now; this helps you anticipate whether you’ll have more success with a direct or a soft approach.

What happens after you’ve successfully closed the sale? Your reps might be so relieved to get the sale that they end the meeting and leave as soon as possible, thinking this avoids the possibility of the lead changing their mind. That said, you shouldn’t end the meeting abruptly — make sure you give your lead the chance to ask any follow-up questions that they may have and walk them through some of the next steps.

If it is a face-to-face meeting, ensure that you give your lead a business card to help them reach out to you if there are any issues. You may also request them to refer people with similar challenges to you.

Sales cycle length and its importance

As we’ve said before, the sales cycle can vary from company to company and no two companies have the exact same process. But, the length of the sales cycle matters. 

Why? You may think that an eight-step sales cycle is the right fit for you, while in reality, all you may need is to have a five-step sales cycle.

Freshsales - Sales Cycle

A study by CSO insights shows that almost 30% of companies opt for a 4 to 6-month sales cycle. This shows that this is the ideal zone for most companies while there is a considerable decrease in the number of companies that opt for longer or shorter sales cycles.

Before we describe the different lengths of sales cycles and what it means, here are some factors that influence it:

Sales cycle length

The sales cycle length differs for industries and it is important to keep a watchful eye on your company’s average and your industry’s conventional average sales cycle length. If it’s longer, you’ll know that you have to fine-tune it to reduce the length. Otherwise, you’ll know how typical sales cycles work in your industry. 

Here are some common sales cycle lengths

Conventional sales cycle: As mentioned before, this is in the range of four to six months. Following our seven-step process can help you maintain or attain this length. 

Long/Short sales cycle: This is easy to identify. When you compare your sales cycle to the industry average, you’ll be able to tell if your company has a long or a short sales cycle. If your company has a sales cycle that lasts less than a month, then you have a short sales cycle. On the other hand, if your company’s sales cycle takes more than twelve months, you have a long sales cycle.
Complete sales cycle: Your sales cycle can’t always be short, and sometimes it may get stretched and your reps will have to go through additional steps. Sometimes, your reps may spend the majority of their time on merely getting in touch with the decision-maker in the company. This is more common among enterprises and can take up to a year.

How to improve your sales cycle process

Regardless of whether your team is already hitting its revenue targets, or they still have a long way to go, they should continuously fine-tune their sales techniques to improve the sales cycle.

Daina Dunlop, a Senior Instructional Designer at Dacre, Inc. says, "you'll have to analyze each step of it as well as your sales data to find out what's happening or not happening. In terms of optimizing it, again, that's specific to your company and you need to go step by step and determine what needs to be done differently. In my experience, it isn't always the sales process (or sales cycle) that's necessarily the issue, but rather that sales reps aren't executing on it effectively. Recommend you do this type of analysis to see what's happening with yours."

Here are some tips to keep in mind.

1. Reduce low-value work

The average sales rep spends just 37% of their time selling, with the rest of their time being eaten up by low-value work such as administrative and service tasks.

If you want to improve your sales cycle, one easy way is to outsource your reps' administrative tasks such as data entry, scheduling, and even lead generation activities. 

Outsourcing these activities can help your salespeople:

You can also use a CRM for this. For one, it is designed for this purpose. It also consolidates customer data from multiple touchpoints such as phone, email, chat and web-forms and maintains records with no manual intervention.

2. Align sales with your marketing team 

It’s simple. Aligning the sales and marketing teams in your company comes with many benefits. In fact, according to MarketingProfs, doing this can lead to a 36% increase in customer retention and a 38% increase in sales wins. 

By aligning your sales with your marketing team, you are effectively:

You can also use a CRM software that either comes with marketing automation functionalities built-in or can integrate with a marketing automation software. This can help improve your sales cycle substantially. By using a CRM for this, you can have a unified approach while managing data, and it also gives you access to your lead’s activity timeline, whether they’ve opened emails, the pages they’ve visited, and more, giving your sales and marketing folks more context.

3. Follow up diligently

Initiating the first contact with your lead is only the first part of the puzzle. While it is a victory of sorts, you will still have to work on following up with your lead, and unfortunately, this can seem like a drawn-out process. 

Interestingly enough, while 80% of sales reps require five follow-ups before a deal is made, 44% of them give up after the first attempt. This means that your sales reps will have to develop thick hides and persevere with the follow-ups. 

To handle this, adopt a good follow-up strategy that can work for you. One thing you can do is follow up as many times as you can until you get a response. This doesn’t mean you have to keep pushing them for a sale. 

For example, your lead may ask you to contact them in, say, 15 or 20 days. Don’t feel let down; go ahead and mark this in your calendar and contact them on their preferred date. 

If you are reaching out to them for the first time, then reduce the number of follow-ups. There’s nothing worse than sending repetitive emails to somebody you haven’t had contact with at all. 

Another thing you can do is to share valuable content or information with them. The reason is simple: it completely takes away the repetitive factor of your follow-ups. Share different content pieces with them so it doesn’t seem like all you want is a sale; rather, you’re genuinely trying to help them tackle their pain points. 

Alternatively, you can also use your CRM software to keep track of your follow-ups and even automate follow-up emails from time-to-time to reduce the time taken to do so.

4. Request for small commitments

Have you ever heard of the “foot in the door” technique? This is also commonly known as “incremental closing” where you request the prospect for a small favor before the end of every call. The number of requests you can ask them depends on how many they are willing to commit to. 

Actually, the more requests your lead accedes to, the more rapport you develop, and when you go in for the close at the end, it doesn’t seem like such a huge ask anymore.

The key with these small commitments is to start small and make it easy for your lead to say yes. 

5. Eliminate the hassle of scheduling meetings

“I love sending multiple back-and-forth emails to schedule a meeting,” said no lead ever. This is frustrating and is not efficient at all. 

This may not seem time-consuming, but it is. For instance, if it takes you and your prospect a quarter of a day to agree on a suitable meeting time, and your sales cycle requires eight meetings. This means you’ll waste two whole days just to schedule a call. 

In order to streamline your workflow, and reduce the friction associated with the sales cycle, use a tool that makes it easier for you to schedule your meetings like Calendly or Meetings. These tools sync with your official calendar so that your prospects can view when you are free and select a time that can work for them. 

A CRM also integrates with these meeting applications and automatically adds scheduled events to customer records.

6. Use social proof

You may have several case studies at your disposal, but you shouldn’t just publish them on your website and forget about them. There’s no use for it if your prospects can’t easily find it. And, not all of them can. 

Case studies are great for building your company’s social proof, so ensure that your sales reps actively share these with your prospects. Doing this will nudge them that much closer to making a purchase.

Sending case studies is also a great way of handling any objections that your lead may have. For instance, if your lead is feeling apprehensive about whether there will be a steep learning curve involved with your product, show them case studies of other customers who were up and running within a short period of installing your tool.

7. Train your team

We’ve covered several best practices that SDRs can use to increase their sales effectiveness. Now, this last tip deals with how sales managers and directors can help their team improve by ensuring that their reps get sufficient training.

Create sales decks, sales kits, and other documents to guide your team through the sales process. Of course, you cannot create them all. Task your marketing team to create it for you. You can also keep a close eye on each team member’s metrics as they get used to your sales cycle. 

What’s more, you can also put your CRM software to use for this. Using a CRM, you can create reports to analyze the performance of your sales team such as lead response time, activities, deals closed, and more. 

Doing this, you may find that certain reps are facing headwinds at specific stages of the sales cycle. If this is the case, be sure to offer them additional resources and support, and allow them to shadow and learn from high-performing sales reps.

Sales process KPIs

To further optimize your sales process, you need to track a few key performance indicators (KPIs). This will help you understand whether your sales cycle is working or not. 

Here are three key KPIs you need to track for optimal sales cycle performance:

Number of monthly sales

The number of monthly sales you make can help you understand how many new customers you were able to acquire. Compare this to the previous month’s numbers and you’ll know where you stand. If the numbers are lower this month, you’ll have to optimize your sales process. 

Analyze why this may be happening and ask yourself the following:

Number of new leads per month

This is a metric that depends on the type of business. New leads can apply to people who sign up for a free trial or people who visit your website and spend some time on it.

To start with, do the following:

The length of your sales cycle

As mentioned before, the lower your sales cycle length, the better. Tracking and optimizing this KPI can be of a great boost to your sales process. To improve upon this attribute, you can assign sales reps to follow up with cold deals to boost your conversions. Instead of just pushing these to an immediate sale, you can share content with them, offer them discounts, or even extend their trial. 

Also individually analyze the sales cycle length of every sales rep in your team. If their sales cycle is lower than that of the company’s they are doing a great job. If not, work with them to improve this.

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