Sales Cycle Guide: Definition, Stages, Techniques

Sales Cycle Guide: Definition, Stages, Techniques

The sales cycle refers to the specific stages and actions that a sales organization performs in order to complete a sale.

For most companies, the general phases of the sales cycle look more or less the same. Of course, the specific steps a business and its customers take along the way will be company-dependent, but the general framework is pretty standard.

In this article, we’ll go over the basics of the sales cycle, as well as what makes them so important to understand, track, and optimize.

Here’s what we’ll cover:

What Is a Sales Cycle?

The sales cycle — which is usually broken down into 7 distinct stages — encapsulates the many actions, decision points, and input/output scenarios that a sales organization undergoes in the process of selling to a customer.sales cycle Despite its seemingly generic appearance, formalized and well-defined sales cycles are critically important for businesses.

Metrics and KPIs related to the sales cycle are some of the most impactful contributors to your company’s bottom line; research shows that businesses that have an established, well-tracked sales cycle see 18% more revenue growth than those who take a more haphazard approach.

Increased revenue isn’t the only benefit of optimizing your sales cycle, though. There are many other reasons to dig into and refine the specifics of your current sales process.

chart-barShorten your sales cycleClose deals faster with Yesware

Why Is the Sales Cycle Important?

The sales cycle is the repeatable process that sellers can rely on to attract and retain customers. It’s the framework that sales reps and marketers refer to in order to help them create effective sales strategies to close more deals.

Improve Team Structure

When you define your sales cycle, the onboarding process becomes an order of magnitude easier.

Think of a sales cycle kind of like a roadmap: it tells salespeople the exact steps and processes they need to follow in order to successfully close a sale. Having the ability to hand to a new hire a document that spells out, “When x happens, then you do y” will save everyone a lot of time and energy, and will allow new salespeople to hit the ground running.

Better Intel for Reps

A well-planned sales cycle also helps ensure that everyone on the sales team knows their specific role. This kind of cohesion will make your sales organization feel like a well-oiled machine.

The sales cycle gives insight to sales reps about how the sales process operates, who is responsible for which components, and what to expect as they work with prospects and customers. It enables employees to seamlessly collaborate in closing deals.

Better Value for Prospects

The sales cycle also improves the sales experience for the buyer. When sales reps use the sales cycle as a point of reference, they’re able to pinpoint exactly where each prospect is in their buyer’s journey.

sales cycle: the buyer's journey

This insight can help them better understand the prospect’s needs at that particular stage of the process, and plan their sales strategy accordingly.

Improved Overall Sales Performance

Segmenting the sales process into defined stages with the sales cycle can help maximize the efficiency of your sales pipeline.

sales cycle: sales pipeline

A defined sales cycle can enable sales managers to prioritize the right resources and leads at the right time.

This makes the sales process easier to track, evaluate, and improve their performance. Analysis of the sales cycle can show sales teams where their process works well, and what bottlenecks or inefficiencies need to be addressed.

Improved Investor Relations

When your sales reps adhere to a defined sales cycle, it makes the sales process more predictable. When your sales process is predictable, you’re in a fantastic position to make a highly accurate sales forecast (which has tons of benefits).

sales cycle: sales forecasts

Like a formalized sales cycle, accurate sales projections can make a huge difference to the health of your business. Investors are most eager to work with businesses who talk the talk and walk the walk; a well-defined sales cycle will help you deliver the numbers to back up your projections.

Sales Cycle Stages

The sales cycle is usually described in pretty general terms, but in reality, it actually captures a very thorough process.sales cycle process The sales cycle is all the steps a salesperson takes to close a deal, from the moment a potential client becomes aware that they have a problem, all the way through a smooth onboarding process.

As you build out your sales cycle and define each stage, take note of the way they might align with the buyer’s journey.

The exact number of stages in your sales cycle — and the lengths and activities of each one — will depend on the product or service you’re selling, the overall market, and a handful of other variables. That being said, there are usually 5 – 7 broadly accepted stages within the sales cycle.

Note: Before we dive into the specifics, note that many companies use the terms “prospects” and “leads” in different ways; some even use them interchangeably. Be sure to confirm the usage of these terms with your team; if there’s not already a standardized definition, take the time to make that happen.

The 7 Stages of The Sales Cycle

1. Prospect
2. Contact
3. Qualify
4. Present
5. Overcome Objections
6. Close
7. Follow-up/Nurture

1. Prospect

In the first stage of the sales cycle, you’ll want to align closely with your marketing team to develop your Ideal Customer Profile (ICP).

sales cycle: ideal customer profile (ICP)

Having a thorough understanding of your ideal customer will improve your lead generation process by increasing the ratio of well-qualified leads who enter your pipeline.

It’s true that sales prospecting should cast a wide net and generate as many opportunities as possible; ideally, however, you want the top of your funnel to only be wide enough for as many “good fits” as there are available; anyone else will ultimately become lost time and resources.

Use your ICP as your “North Star” as you work LinkedIn for leads. And don’t write off cold calls or cold emails — these are incredibly powerful sales channels when handled correctly, and can generate a ton of qualified leads for your business.

mailProspecting made easyMulti-touch, multi-channel campaigns with email, calls, and social touches

2. Contact

Once your pipeline is populated with prospects, it’s time to start making contact.

Many companies utilize inbound marketing strategies for the prospecting stage, with a lead magnet or other opt-in process. Marketing strategies like these make email addresses or phone numbers readily available.

For businesses that rely on outbound marketing, consider any of the following ways to make contact with your prospects:

  • Phone call
  • Email
  • Sales letter
  • Social media message
  • Introduction through a mutual connection

Remember that your first contact is not intended to be a full sales pitch. The purpose of the initial contact is to build rapport with potential leads and, in many cases, begin to further qualify the prospect.

3. Qualify

After contact has been made, it’s time to start qualifying your leads.

By this point, you should be researching your most qualified leads on LinkedIn and elsewhere online. Gather as much information as you can before you sit down to talk specifics; this will allow you to allocate as much time as possible to conversations around pain points, your value offering, and overcoming objections.

One easy way to structure this process is through the BANT framework.

sales cycle: BANT

Of course, you’ll want to make sure the conversation is a bit more natural and thorough than simply asking the four questions listed above; your qualification process should be thorough and meticulous. But the basic tenets of the acronym will help steer the conversation.

It may sound counterintuitive, but your goal during this stage of the sales cycle should be to weed out everyone but the most qualified leads. There’s no point in spending time and resources moving unqualified leads down the pipeline.

Open-ended sales questions are great for quickly getting to the heart of what a potential customer really needs. For leads that seem qualified, but need more time, consider adding some automated nurturing — email drip campaigns are great for that.

4. Present

Once you’ve qualified your most promising leads, it’s time to sell your product.

In this day in age, remember that consumers are hyper-wary of being sold to — whatever you do, don’t be pushy. Consider using consultative, value-based, or even target account selling strategies — each of these will demonstrate to your potential customer that you’re well invested in meeting their unique and specific needs.

You’ll also want to make sure you know your product’s USP like the back of your hand.

unique selling proposition

Check out our post on sales presentation tips and templates for more best practices.

5. Overcome Objections

Once you’ve completed your presentation or demo, it’s time for the tricky part: overcoming sales objections.

The truth is, most customers will have at least some questions, concerns, or outright objections to your product. That’s okay — expect and prepare for this. Pricing, for example, will almost always come up in some respect; you can beat the client to the punch by having a handful of scripted responses to address that concern.

In fact, it’s prudent to have some scripts for all of your most common objections. That’s not to say that you should give a generic, rehearsed monologue whenever asked — you still need to sound natural. Active listening skills and behaviors can go a long way in showing the client that you’re hearing them and interested in what they really need.

active listening skills in the sales cycle

This stage of the sales cycle may take some time. Objections are not always addressed right on the spot, especially if you’re not yet in contact with the primary decision-maker. “No” might not mean “no, door closed”; sometimes it means “not right now,” or even, “I need to run some numbers.” Don’t give up too quickly.

6. Close

Depending on how many objections you encounter, it may or may not be time to execute the close. The specifics of how you approach this stage will depend on the outcomes of the stages prior, so it’s up to you to read the room and use your best judgment.

Some clients will be ready to sign on the dotted line then and there. In these cases, you can make a more forcefully suggestive move to close, like “I’ll just go draw up the contract. Give me five minutes.”

In other cases, you may have to continue finessing to get to yes. Take the time to continue asking and answering questions; many clients need more reassurance and/or time to consider before they’re ready to commit. This is perfectly normal. In fact, 80% of sales require 5 follow-ups before close.

7. Follow-up/Nurture

Depending on how each potential client proceeds, your sales cycle may split during this stage.

For leads who are still working through objections, focus on following up in a timely and valuable manner. Try to steer away from emails that pester leads about whether or not they’ve made a decision; instead, send quick, contact-establishing correspondences that include some personalized, valuable content for that client. This will let them know that you’re still thinking about solving their problem.

For leads who you’ve successfully closed and turned into customers, now’s the time to nurture them through onboarding. There’s nothing worse than being catered to through a well-designed sales process, only to be abandoned once your card is charged.

Invest the time into making sure your customers have what they need to get started. Then, continue to follow up with them about every 3 months for the first year.

It’s clear that the sales cycle has many, many moving pieces. Your leads will not all move through your pipeline at the same pace, or with the same outcomes through each stage. Leverage the automation that your CRM has to offer; it can go a long way in making this process run as smoothly as possible.

Tip: Accelerate results in your sales cycle with these data-backed findings on up-to-date sales strategies:

Sales Engagement Data Trends for Sales Managers to Know Going Into 2022Looking at hundreds of millions of tracked email activity over the past year, this ebook is filled with our top studies & findings to help your sales team accelerate results in 2022.

How to Measure Your Sales Cycle

While your sales cycle is an excellent resource and roadmap for both new and seasoned salespeople alike, its purpose isn’t just to exist as a how-to or a manual. Analyzing the specifics of your sales cycle can also give you powerful information about the health and effectiveness of your selling process.

Research consistently shows that companies with shorter sales cycles see more sales growth than those with lengthier ones.

revenue growth vs sales cycle

Of course, every company and market will have their own optimal sales cycle length. Just because one company has a sales cycle length of 120 days, and another has a length of 30, doesn’t necessarily make one better than the other.

Things that may influence the length of your sales cycle are:

  • The details of your ICP
  • Your company’s target market
  • The sales price of your product (more expensive products typically have longer sales cycles)
  • How effective and well-trained your sales team is

It’s important to look at your company’s data among these factors and compare it to its own optimal metrics, as well as those of your competitors and peers.

To calculate your current sales cycle length, all you need are a couple of data points and a quick and easy formula. Simply take the number of days in a given period, and divide that number by the number of deals you successfully closed in that period. This will tell you the current length of your sales cycle.

average sales cycle length

The longer it takes to close a sale, the more likely it is to fall through; trimming the overall length of the cycle — as well as each individual stage — will go a long way in maximizing your returns.

Metrics

Consider tracking some of the following sales metrics in addition to the overall length of the cycle.

  • Number of Monthly Sales: This metric will tell you how many new customers you acquired. It’s a good indicator of the overall effectiveness of your sales reps and the process itself.
  • New Leads per Month: Tracking the number of leads you generate in a month will give you good insight into how well your marketing and sales strategies are working toward the beginning part of the cycle.
  • Lead-to-Customer Conversion Rate: This metric will help you determine whether you need to finetune your sales presentation or closing skills.

You’ll also want to consider tracking conversion rates for each stage, as well as your overall conversion rate at the end of the cycle. Alternatively, you can also pull data to show your loss rate by stage, which will help illuminate any particular weak spots or stages in the cycle.

Tip: Track the way leads move through your pipeline so you can prioritize the most promising ones.

Techniques to Shorten Your Sales Cycle

Knowing that the most successful businesses are the ones that have the shortest sales cycles, let’s look at some of the ways you can shave some time off your own.

Align Sales and Marketing

It’s important to make sure your marketing team and sales team are working toward the same goals. Sales and marketing should each be very familiar with the different lead generation strategies and activities happening in the other department; this will help the prospecting stage run much more efficiently.

Companies who align these teams see a revenue increase of over 200%, in addition to several other measurable benefits:

shorten your sales cycle with sales and marketing alignment

The more qualified the prospects are coming in at the top of the funnel, the higher your bottom line conversion rate will be.

Ditch the Busy Work

Shockingly, the average sales rep spends only 36% of their time on selling activities. The remainder of their time is typically spent on menial and mindless tasks like data entry and other administrative busywork.

sales cycle: sales activities

Make sure your team has a thorough understanding of the ins and outs of your CRM — leverage this software wherever possible so your reps can focus on the important parts of selling.

Use Social Proof

No matter what sales methodology you use, you’re bound to run into potential customers who simply can’t shake their skepticism. Sometimes the fear of “being sold to” can outweigh even the most lucrative and best-fit product offer.

In these cases, it’s time to pull out some social proof, one of the six principles of persuasion:sales cycle: social proof Things like case studies and testimonials can help customers get to “yes” much more quickly than a simple sales pitch.

Understanding the specifics of your sales cycle is a powerful step forward in optimizing your sales process. Spend some time with your team brushing up on your current metrics and making a plan to optimize any areas that need tweaking.

What Is Sales Cycle Management?

Sales cycle management refers to the way sales reps and sales leaders track, evaluate, and optimize the stages of the sales process.

The sales cycle management process helps sales organizations pinpoint trends and patterns in which components of the process are working well, and which need to be tweaked.

Effective sales cycle management doesn’t just look at the seller side, though. It should also include a careful analysis of the buyer’s side so that sellers can adjust and respond to buyer behavior during key decision points and stages of the sales cycle.

Sales cycle management is extremely important. The truth is that any organization that sells a product or service will naturally fall into some kind of “sales cycle” structure, but intentional management of that cycle is what elevates average sales teams to great ones. In fact, formalizing the sales cycle has been shown to boost revenue by 18%.

Sales Cycle Management Best Practices 

Each sales organization should manage their own sales cycle according to the specific needs of their process and target buyer.

That being said, there are some specific best practices when it comes to sales cycle management that will serve just about any sales team well as they work to optimize their process. 

Track Your Metrics

The key to effective sales cycle management is tracking its performance. If you don’t have baseline data yet, it’s important to collect information on as many performance metrics as possible. Some of the most impactful include:

  • Average deal size
  • Number of opportunities
  • Conversion rate (overall and by stage)
  • Sales cycle length
  • Sales velocity
  • Time spent selling 

As you fall into a more regular routine in managing your sales cycle, you’ll start to pinpoint which sales metrics need the most attention.

Keep Careful Records

There’s no point in collecting data if you’re not storing it, or if you’re storing it in a careless way. Keep meticulous records of the leading and lagging indicators that are part of your sales cycle. Individual data points are only so informative; several data points, however, will absolutely shed light on patterns and trends that are impacting your sales performance.

Adapt Cycle Stages to Match Your Sales Process

Although the “standard” sales cycle has seven stages, that framework isn’t universal for every sales team. It’s okay to adapt or change the typical sales cycle framework to more closely match how you actually conduct your sales process.

Don’t stick to the standard just for the sake of it; sales cycle management requires sales teams to carefully align their day-to-day activities with an accurate sales cycle framework.

Onboard and Train Your Team

The process of sales cycle management is infinitely easier when your team is properly onboarded and trained in the ins and outs of the sales cycle. Sales reps should participate in a thorough onboarding process when they’re first hired, and everyone on the team should receive regular training and updates on strategies, tactics, and performance metrics.

Clean Your Lists Regularly 

It’s hard to manage the sales cycle if your lead lists are outdated and/or inaccurate. Schedule regular data cleanups on your pipeline so that your sales cycle can be analyzed properly.

Ask For Feedback

It’s usually best to go straight to the source for feedback about how a process is working. If you want to know how to best manage your sales cycle, try getting feedback directly from those who work it every day: sales reps.

Your sales reps will be able to give first-hand accounts on how well the sales cycle flows, from a practical, real-world perspective. Your sales cycle might look extremely efficient on paper, but it won’t work if it doesn’t work for the sales reps.

Automate Everything

Remember that statistic we looked at earlier — that salespeople only spend about a third of their time performing revenue-generating sales activities? One surefire way to combat that — and improve your sales cycle management process — is to automate the process wherever possible. Look for ways to automate data entry, activity tracking, and analytics operations. These are all opportunities to alleviate the administrative workload of sales reps.

Get sales tips and strategies delivered straight to your inbox.

Yesware will help you generate more sales right from your inbox. Try our Outlook add-on or Gmail Chrome extension for free, forever!

Hit your number every month

Get Yesware for free

Works on Outlook or Gmail (+ many more integrations)

Related Articles

10 Persuasive Techniques for Sales and Marketing [2022]
Melissa Williams

Melissa Williams

SPIN Selling: All-In-One Guide for 2022
Melissa Williams

Melissa Williams

Sales, deal management, and communication tips for your inbox