Even though your organisation may be selling products or services, you may not have taken the time to formalize your sales cycle by documenting it. This is important when it comes to training new sales reps, measuring sales efforts, and increasing sales effectiveness. Not sure of what a sales cycle is?
What is a sales cycle?
A sales cycle is a series of specific activities your salespeople must take to close a new customer. It includes different stages that typically align with your sales funnel. The most typical stages include:
- Make an offer
- Handle objection
How do these stages work and why are they important?
Sales cycles differ from one company to the next. Factors such as industry, market share, and product type influence which specific steps will be in your sales cycle. Each stage designates an activity your sales reps must complete before advancing the sale towards a close and each one has a particular purpose.
This is where the process of selling begins. Your sales reps use your buyer personas to help them identify leads and cold prospects who most closely match your ideal customer profiles. When looking for cold prospects, who aren’t marketing qualified leads (MQLs), they might search through news stories and LinkedIn or leverage referral sources. This is where they put together their list of prospects to call. Of course, the more refined your sales funnel, the better quality MQLs you can provide to your sales reps and the less time they need to spend searching.
Once your reps have a list of leads, they need to connect with them and determine which stage of their buyers’ journey they are on. This will tell your salesperson what the prospect needs next. For example, if they downloaded a white paper from your website, they may be ready to discuss your product in more detail if they’re getting close to selecting a solution. Whereas, a prospect who just downloaded an eBook may only be starting to research potential ways to solve their problem or may not have pinpointed their exact problem. This prospect needs more time before they’re sales qualified and ready to advance through the balance of the sales process.
One thing to keep in mind — it’s critically important your reps contact leads as soon as possible so your company will be a contender when the prospect is ready to make a buying decision. In fact, making contact within an hour or less has been found to be optimal. So, as the old saying goes, strike while the iron is hot.
Once you’ve contacted a lead, if they are ready to proceed, it’s time to qualify them. Marketing may have done some pre-qualifying by including a field on the lead capture form to attain key information such as their annual company revenue.
During this stage, your salesperson should ask a series of key questions. These typically are based on a common model referred to as BANT where they assess that the lead has the sufficient Budget, Authority, Need and Time (a deadline for selecting a solution). This is where it’s determined whether the lead is serious about solving a problem and able to actually make a purchase. It prevents your reps and company from investing too much time or resources on the wrong prospects.
If the lead isn’t ready to buy yet, this is the point when you should begin nurturing them until the timing is right. A popular method of lead nurturing is an email drip campaign administered by your CRM. You can also retarget these leads with social media ads or by the use of a chatbot. This activity keeps leads engaged with your company so your solution will be top of mind when they are ready to make a selection.
5. Make an offer
Leads that sign up for demos or trials and are inquiring about pricing are ready to make a purchase. At this point, it is appropriate to make a sales pitch that concludes with an appropriate offer.
6. Handle objection
It’s not uncommon for a lead to push back once you’ve made an offer. These objections are often a request for more information or a sign that they aren’t quite convinced yours is the best solution for them.
There are many common objections relating to pricing, timing and the like. You will see a recurring theme of objections with your product as well. Gather them so you can prepare your reps to respond effectively, so these questions don’t become roadblocks to their closing success.
Once all objections have been answered, it’s time to ask for the sale. If the lead is convinced that your solution is right for them, closing the sale should happen naturally. It often helps if the sales rep has the paperwork completed and ready for the prospect’s signature, preventing the lead from getting cold feet at the last moment.
And once the sale has been closed, be sure to allow the new customer to ask any additional questions they may have. It will make them feel more comfortable and it’s where customer retention starts.
How to improve your sales cycle
The more efficient and effective your sales staff is the smoother your sales cycle will run. That’s why it’s important to always be refining the techniques and tactics employed to improve it. Here are some ways to do so:
- Reduce non-sales activities through automation. This frees up your salespeople to spend more time on sales activities.
- Manage leads effectively, so you never forget a follow-up or miss a touch-point. Don’t let valuable leads fall through the cracks. Task reminders in CRM help keep your reps on track.
- Your reps should always be asking for small commitments with trial closes along the way. This can help accelerate the sale or draw out potential objections in advance of the final close.
- Simplify scheduling of meetings by integrating a meeting application with your CRM to automate the process as well as record the meeting on the customer’s record.
- Leverage proof points like customer success stories and testimonials to proactively handle potential objections and prove claims about your product.
- Train your sales team and reinforce it with coaching as well as reference materials. This will help reps retain more of what they learn while improving their skills.
Like sales funnels, marketing methods and other business functions focused on buyers, your sales cycle stages should be continually assessed for effectiveness and improved. Doing so will help your business experience the sales and growth you are seeking. For easier sales cycle management, be sure to leverage every functionality in your CRM.