Sales cycle management: A beginner's guide

Learn how to master each stage of a sales cycle with this comprehensive guide.

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What is a sales cycle and why is it important?

A sales cycle is the strategic process that sales teams follow while trying to sell a product or acquire a new customer. This process is a series of clearly outlined and replicable steps that help you deliver a seamless customer experience and track and manage your sales team.

A sales cycle typically begins with lead generation, where potential customers are identified and their interest is piqued through targeted marketing. From there, it progresses through stages such as lead qualification, exploration and presentation, negotiation, deal closure, and post-sale activities like onboarding and support.

Sales cycles are important because they provide a structured framework for sales teams to follow, ensuring that each prospect is guided through the buying journey systematically. This consistency not only increases the efficiency of the sales process but also helps in maintaining brand integrity and delivering an exceptional customer experience. Moreover, a well-defined sales cycle allows businesses to identify bottlenecks or areas where prospects may drop off, enabling them to make necessary adjustments and improvements for higher conversion rates and revenue growth.

Benefits of a sales cycle to your business

Simplify the onboarding

Having a well-defined sales cycle makes it easy for you to train new sales representatives. You’ll be able to provide your sales team with a structured roadmap to work from.

Bring structure to your sales process

Clearly outlined processes empower you to structure your team effectively. You can identify bottlenecks and reassign staff as needed.

Track your performance

Keeping track of key statistics helps you evaluate your team’s performance. If key performance indicators (KPIs) are trending in the wrong direction, you know you need to make changes.

8 Stages of an effective sales cycle

Every company has a unique sales process depending on their industry, market share, and  type of product or service. It is important to define the stages of your cycle and the key metrics you can use to measure your team’s performance.

These basic steps are common to most businesses.

1. Finding leads

This phase encompasses both lead generation and sales prospecting. Start by identifying your ideal customer profile (ICP) and then task your sales and marketing teams with making contact with potential customers and turning them into leads.

Here are some tools and channels your teams can use:

  • Advertisements

  • Demo requests or signup forms

  • Discovery calls 

  • Outbound prospecting such as cold emails and phone calls

  • Lead lists

2. Making contact

The next stage is contacting the  leads. It’s vital to do some research and determine the best method of reaching out.

Start by determining what stage they are at in their buying journey. If your lead has downloaded an e-book they are gathering information 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. 

Regardless of where they are on their customer journey, you must contact leads in a timely manner. 30-50% of sales go to the vendor that contacts prospects first. Optimize your chances of converting the lead and contact them as soon as possible.

3. Qualifying the lead

After you’ve made contact with your lead, the next step is to qualify them. In this step you are determining the value of the lead to your company. In other words, how likely is this lead to make a purchase? This depends on a variety of factors. 

You may have pre-qualified your leads in the previous step of the sales cycle. For example, your web form 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 help you out.

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 BANT methodology. This means confirming your lead has the budget, authority, need, and time to make a purchase.

These are some questions you can ask your leads: 

  • What is their budget? This helps you understand if your solution is financially feasible.

  • What is their job title? This is to determine if they have the authority to make a purchase, or if they are conducting research on someone’s behalf.

  • What are their pain points and needs? Once done, ask yourself if your product addresses all these needs.

  • How urgently do they need your product? This helps you understand their timeline.

4. Nurturing the lead

Not every lead is at the same point in their buyer’s journey. If your lead is not ready to buy immediately, start nurturing potential clients to slowly move them down your sales funnel

A common mistake that companies make is trying to “force” a sale. Your prospects want to be treated in a personalized manner and not just another person you’re selling to among many. 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 on time You can also target them through Google, Facebook, and LinkedIn ads.

5. Making an offer

Step five is making an offer. This is where your sales reps present your solution in the context of how it solves their unique and specific pain points.

However, you should only make an offer when you have determined that your prospect is ready to buy. By this point, your rep should be confident that they are speaking to the right decision-maker for that company and that their budget is in line with your solutions. Some other indications of readiness include signing up for a demo and visiting the pricing page.

6. Handling objections

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

  • “It’s not our priority right now.”

  • “We’re evaluating your competitor.”

  • “Your product is complicated.”

  • “I’ve heard negative things about your company.”

  • “Your product lacks some features.”

  • “I’ll get back to you later.”

  • “I don’t want to commit to a contract at the moment.”

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 time to close the sale. 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.

Once you’ve closed the sale, don’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.

8. Generate the referral

Once you’ve closed the sale, there’s one more step of the sales process: getting a referral–or two! Referrals are an excellent source of possible leads, so it makes sense to pursue them.

Clients are typically very excited about your company at the time of closing. That makes this moment a great time to ask for a referral.

Click to read more about Freshworks’ B2B sales cycle.

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5 factors that influence cycle length

Your company’s target market

In niche markets or with well-defined customer profiles, sales cycles tend to be shorter, as prospects are more readily identified and converted. In contrast, broader markets may have longer cycles, as lead nurturing and relationship-building take longer due to varied customer needs and preferences.

Your ICP

When a company's Ideal Customer Profile (ICP) closely aligns with its offerings, the sales cycle tends to be shorter because prospects are a better fit and require less persuasion.

Conversely, a mismatch between ICP and product may extend the cycle due to increased resistance and qualification efforts.

How effective your sales process is

A well-optimized, efficient sales process with clear stages and communication can expedite conversions. In contrast, a poorly structured or ineffective process may lead to delays, as prospects encounter obstacles or confusion, potentially extending the time it takes to close deals.

Your sales team’s win-loss ratio

A sales team's win-loss ratio is a critical metric that influences the sales cycle length. A higher win ratio often leads to shorter cycles, as it indicates better lead qualification, competitive advantage, and effective sales tactics, while a lower win ratio may extend the cycle because it indicates that your prospects require more effort and persuasion.

How much your product costs

The cost of a product can significantly affect the sales cycle duration. Higher-priced products typically require a longer cycle because prospects may need more time to evaluate and make decisions. In contrast, lower-priced products may have shorter cycles because they involve less financial commitment and decision complexity, often resulting in quicker conversions.

How to optimize the length of your sales cycle

Your goal is to find the sweet spot where you close deals as quickly as possible without scaring off potential clients.

  • Use tools to minimize busywork and maximize efficiency: Tools like lead generation, lead management software, and email marketing tools can go a long way toward creating an efficient team.

  • Constant evaluation: Monitor your pipeline at every stage and adjust where needed. 

  • Properly resource your team: Make sure your salespeople have ready access to various assets to help them nurture leads and close sales. These might include white papers, case studies, testimonials, and other content to share with prospects. This can also include a sales playbook that walks your reps through your process and provides best practices along the way.

Constant evaluation: Monitor your pipeline at every stage and adjust where needed.

Properly resource your team: Make sure your salespeople have ready access to various assets to help them nurture leads and close sales. These might include white papers, case studies, testimonials, and other content to share with prospects. This can also include a sales playbook that walks your reps through your process and provides best practices along the way.

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How to improve your sales cycle process

Regardless of whether your team is already hitting its revenue targets or it still has a long way to go, it should continuously fine-tune its sales techniques to improve the sales cycle. Here are some tips to keep in mind.

Here are some tips to keep in mind.

1. Reduce low-impact work

The average sales representative spends just 37% of their time selling, with the rest of their time 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 sales team focus on selling and improve selling efficiency and effectiveness. From a business standpoint, it provides you with more growth opportunities.

You can also use a CRM and other lead generation and lead management tools for this. These tools consolidate customer data from multiple touchpoints such as phone, email, chat, and web forms and maintain records without manual intervention.

2. Align sales with your marketing team 

Create a framework in which sales and marketing have shared goals and strategies. Aligning the sales and marketing teams in your company comes with many benefits. According to MarketingProfs, it can lead to a 36% increase in customer retention and a 38% increase in sales wins. 

Effective alignment includes syncing your segmentation, targeting, content, nurturing, closing, and customer support. These actions can result in a short sales cycle.

It’s also vital to track and measure the impact of the sales and marketing teams across all your platforms. This can increase revenue and achieve the perfect ROI.

A robust CRM software that either comes with built-in automation functionalities or can integrate with marketing automation software is vital here. A CRM facilitates a unified approach while managing data. It also gives you access to your lead’s activity timeline, 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. You still have to work on following up with your lead. But, according to Calendly, while 80% of sales reps require five follow-ups before a deal is made, 44% of them give up after the first attempt. 

To handle this, adopt an effective follow-up strategy. This might mean following up repeatedly or on a set schedule, depending on your potential customer’s needs.

You can also share valuable content or information to address your prospect’s needs. The reason is simple: It eliminates repetition in 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 use your CRM software to keep track of your follow-ups and even automate follow-up emails.

4. Request for small commitments

If you can’t fully close the sale, consider “incremental closing,” where you request the prospect for a small commitment before the end of every call. 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 to these small commitments is to start small and make it easy for your lead to say yes.

Consider the following small commitments:

  • Share content with them and ask them to go through it

  • Ask for information about the decision-maker

  • Ask them to introduce you to the budget authority or their procurement team

5. Eliminate the hassle of scheduling meetings

Scheduling meetings 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, you’ll waste two days just scheduling calls. 

Streamline your workflow and reduce friction by using a tool that makes it easier to schedule meetings like Calendly or Meetings. These tools sync with your official calendar so your prospects can view when you are free and select a time that works for them. A CRM like Freshsales that integrates with these meeting applications automatically can be a game-changer.

6. Use social proof

Social proof can be a powerful driver of sales. To that end, your salespeople should be actively using social proof such as case studies and testimonials to help convert leads.

Sending case studies is also a great way of handling any of your lead’s objections. 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 after installing your tool.

7. Train your team

Even the most refined sales cycle will fall short if your team can’t properly implement and execute the steps to achieve conversions. Make sure you are training your team for success.

Create sales decks, sales kits, and other documents to guide your team through the sales process. Keep a close eye on each team member’s metrics as they get used to your sales cycle. 

You can also put your CRM software to work here. 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. This can help you pinpoint difficulties at specific stages of the pipeline. Then offer targeting mentoring and training to address the problem.

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What is Sales Cycle Management?

Sales cycle management is the systematic process of overseeing and controlling the various activities involved in a sales cycle. It encompasses the planning, execution, and monitoring of all interactions and transactions that take place between a business and its potential customers. Effective sales cycle management is crucial for businesses to ensure their sales teams operate efficiently, leads are nurtured effectively, and revenue targets are met.

Sales cycle management involves several key components: lead tracking, pipeline management, and performance analysis. Sales managers use sales cycle management to assign leads, monitor each opportunity's progress, and track individual sales representatives' performance. By implementing robust sales cycle management practices, businesses can optimize their sales processes, improve conversion rates, enhance the customer experience, and achieve their sales goals more consistently.

Best practices for sales cycle management

Successful sales cycles don’t happen by accident. They are the result of research, planning, implementation, and ongoing management. Here are our best practices for sales cycle management:

Use data to drive improvement

You need to track KPIs throughout the process and then use these insights to refine your processes. See below to find out which metrics to track and how to use that data.

Use automation & tools

Much of the sales cycles consists of mundane, repetitive tasks such as gathering data, sending bulk email campaigns, scheduling appointments, and dialing phone numbers. Seek to automate as many of these tasks as possible. This reduces human error, frees your sales team to focus on interacting with leads and refining their sales pitch, and increases the overall efficiency of your sales cycle.

To make using tools and automation even easier, choose a fully integrated platform with everything built in.

Constantly refine your sales cycle

You can always do better. To that end, you will be making changes to your sales cycle over time. 

When making changes, it’s critical to understand the impact of these changes. That means getting a snapshot of how you are doing before and after changes. Did the actions implemented raise the KPIs they were targeting? Go into every change with a clear idea of what you want to accomplish and how you are going to measure success.

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 some key KPIs you need to track for optimal performance:

Number of monthly sales

The number of monthly sales you make can help you understand your success rate. Compare this month to the previous month’s numbers and you’ll know where you stand. You should also compare numbers to the same month in previous years. Many industries have a seasonal ebb and flow of sales.

Your sales numbers help you to understand the overall effectiveness of your sales and marketing efforts.

Number of new leads per month

As with your sales numbers, lead numbers may fluctuate seasonally. However, you must always be tracking how many leads you generate. It’s also useful to track individual lead segments.

These numbers help you understand the efficiency of your marketing and other lead-generation activities. By segmenting these numbers, you can more effectively pinpoint what efforts are and aren’t working.

Lead to sale conversion rate

You should also be tracking your lead to sale conversion rate. The sales conversion rate is calculated by dividing the number of new customers by the total number of leads generated. The higher the rate of sales, the better. 

These numbers reflect the effectiveness of your sales team’s ability to nurture customer relationships and close deals

Individual sales numbers

Not only do you need to know how your teams are doing as a whole, but also how individual members are doing. So it makes sense to track the numbers for each salesperson. The results will help you mentor individuals so they can become more efficient going forward.

Length of sales cycle

Finally, it’s critical to track the average length of your sales cycle. As we’ve mentioned elsewhere, this is a key metric. This number indicates the overall effectiveness of your process. If your numbers are trending down, it’s time to take action.

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FAQ

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How long does a typical sales cycle last?

While it varies by industry, the typical length of a sales cycle is four to six months.

What strategies can shorten the sales cycle?

Shorten your process by leveraging CRM software to increase efficiency, using data to pinpoint issues and bottlenecks, and providing resources for your sales team.

How can technology help in optimizing the sales cycle?

There are a wide variety of tools that can help optimize results through automation and integration. Lead generation tools can help capture leads. A robust CRM can track and manage leads. Tools like phone dialers and schedulers can drive an efficient sales team.

What part of the sales cycle causes the most problems?

The sales cycle stage that often presents the most challenges is the closing stage. Here, sales teams may face resistance, objections, or pricing negotiations that require finesse and persuasion. Successfully navigating this final hurdle is critical for converting leads into paying customers and achieving sales targets.