SaaS companies, car dealerships, and bakeries all have something in common—they all follow a sales cycle. A company’s sales cycle is everything they do in an effort to sell a product to a customer.
According to the Harvard Business Review, companies with a defined sales process grow their revenue by 18% more than companies that don’t. So defining and optimizing your company’s sales cycle is well worth the effort.
Here we’ll look at the typical stages of a sales cycle, followed by some tips on what your team can do to make your sales cycle shorter and more effective.
6 stages of a sales cycle, explained
A typical sales cycle can be broken down into six stages:
- Stage 1: Find leads
- Stage 2: Reach out
- Stage 3: Qualify the lead
- Stage 4: Present the offer
- Stage 5: Overcome objections
- Stage 6: Close the sale
Stage 1: Find leads
Before sales reps can sell a product or service, they need to find people to sell to, a.k.a. leads.
Leads are members of your company’s target audience. If you’re not sure who your target audience is, think about which demographic your product serves. What problem does it solve, and who has that problem? Look for leads within this demographic.
Your reps should be using a combination of inbound and outbound prospecting to find leads.
- Inbound prospecting: Bring leads to you, e.g., by attracting them to your website with a blog, capturing website visitors’ contact information through a lead-gen form, and being active on social media.
- Outbound prospecting: Actively seek leads by connecting with potential customers on LinkedIn, join Facebook groups your target audience is likely to be a part of, or buy lead lists.
Prospecting is tough—over 40% of salespeople say it’s the most challenging part of the sales process. So, a tip for sales teams: focus on inbound prospecting.
Inbound prospecting is the more effective of the two, as the lead is already interested and actively seeking to talk products and services.
The goal at this stage: Get the lead’s contact information.
Stage 2: Reach out
Once reps have found some leads, they would then reach out to them and introduce themselves, the company, and your product. This initial contact could be through a cold phone cool, an email, or a connection on social media.
No matter which contact method they go with, the objective is the same: get the lead to agree to schedule some time to hear about what your company has to offer them and how it can solve their problem (more on this later).
Many sales reps make the mistake of getting discouraged if they don’t reach the lead on the first attempt. In fact, research shows that most appointments are made after at least five contacts. Make sure your sales reps aren’t giving up too soon.
The goal at this stage: Get the lead to agree to schedule a time to hear about your product or service.
Stage 3: Qualify the lead
Contrary to popular belief, leads and prospects are not the same thing.
- Leads are people who’d be a good fit for your product or service but aren’t able or willing to buy it from you (for example, they may not be the decision-maker or don’t have the budget).
- Prospects are people who are able to buy your product or service and have a good chance of wanting to as well.
To be clear, prospects are what you want.
At least 50% of the leads your company generates won’t be a good fit.
So, qualifying your leads to see whether or not they’re likely to buy is important because it’ll save you and your company a lot of time, money, and resources.
Now that your reps have scheduled some time to chat with the lead, here’s some information they’ll want to figure out in that conversation to verify whether or not they’re a prospect.
- Does this person have a need for your product?
- Is your product within their budget?
- Is this person the decision-maker in purchasing this product?
The goal at this stage: Verify that this person has the need, budget, and authority for buying your product.
Stage 4: Present the offer
This is the show-and-tell stage. Show the customer what your product has to offer and tell them how it will benefit their business.
For this stage to go smoothly, reps need to come prepared. Encourage your team to research prospects beforehand to get a good understanding of how their business operates and which areas your product or service can help with.
Here are some stats sales teams should keep in mind when preparing for that first official sales call.
- 60% of buyers want to talk about pricing
- 50% want to see how the product works
- 25% want to discuss a timeline for implementation
Based on these stats, some important things to cover in the conversation would be:
- How your product will help them
- Why they should choose your company over competitors
- How easy it is to get started
The goal at this stage: Educate the prospect on how your product or service will benefit them and how it will solve their business problem.
Stage 5: Overcome objections
According to HubSpot, 35% of salespeople say overcoming objections is the most challenging part of the job.
It’s normal for prospects to challenge your product or service with rebuttals claiming they’re not going to purchase it “because of X.” As a leader, it’s important you emphasize to your reps they shouldn’t let this bring them down. Instead, they should embrace it.
At this point, they like your product. But for X reason, they’re not going to buy it. They’re telling the sales rep on the line exactly why—address it!
For example, if the prospect is concerned about the cost, a rep could justify the pricepoint by focusing on the value your product or service will deliver. Alternatively, they could break the cost down by dividing the total number by months, weeks, or even days to demonstrate just how affordable the solution is.
The goal at this stage: Effectively address the prospect’s rebuttals to convince them to make the purchase.
Stage 6: Close the sale
The big moment—time to bring it home!
There are a couple of ways to approach closing a sale: a hard close and a soft close. It’s important your sales reps are aware of both tactics.
Hard close:
This is a straightforward, direct way to close. Does the prospect seem eager and excited about your product or service? If yes, a hard close could work well.
Example: “Alright, let’s do this! I’ll put the paperwork together and send it over for you to sign, then we can decide on a delivery date and get you set up. Sound good?”
Soft close:
This is a more passive approach to closing a sale, and a better method to use when a prospect still seems a bit iffy about the purchase. The last thing you want to do is be too aggressive or pushy, so try a softer close focused heavily on the benefits of your product.
Example: “Alright, we’ve gone over how our product is going to do XYZ for your business. I’m going to put the paper together and shoot it over to you. If everything looks good to go on your end, we can move on to next steps.”
Did you notice something these examples had in common? Both used collaborative language (i.e. “we”). According to research conducted by Gong.io, collaborative language has been shown to increase sales success rates by 35%.
The goal at this stage: Complete the sale by getting the prospect to sign any necessary documents, solidifying the deal.
5 ways to shorten your B2B sales process and make it more effective
By shortening your sales cycle, you’ll free up time, which can be used to generate even more sales. Plus, the shorter the sales cycle, the less opportunity for prospects to drop off. Meaning fewer lost sales, and more money.
Here are five things your team can do to shorten your sales cycle:
1. Invest in generating quality leads
2. Keep your contact lists up-to-date
3. Set a goal for every interaction
4. Schedule follow-ups
5. Make signing as easy as possible
1. Invest in generating quality leads
Save your reps’ time and your company money by investing in quality lead generation. In other words, put money toward bringing leads straight to you versus having to actively search for them.
This will give time back to your sales cycle, which can instead be used by your reps to conduct revenue-generating sales calls instead.
Some examples of lead generation you could invest in are:
- Quality content on your website behind lead generation forms
- Online ads like Google paid search, display ads, and social media ads
- Radio or TV ads
- Ready-made targeted sales lead lists
2. Keep your contact lists up-to-date
They say time is money—this couldn’t ring truer than for a sales rep. There are only so many hours in a day, so it’s important reps are maximizing this time and using it as effectively as possible.
For one thing, a stale lead isn’t going to make you any money, so reps shouldn’t waste time trying to convert them. It just isn’t going to happen.
So, get rid of them.
The same goes for the contacts who just don’t respond. Let ’em go.
Encourage your reps to clean their contact lists up and then make a continuous effort to keep it fresh and tidy. This will maximize the amount of time they dedicate to prospecting each day.
If your team is using a CRM, they can do this by setting expiry dates for individual contacts or even for segmented contact lists. They can also set certain conditions that dub a contact as stale or expired and automatically remove them from the list.
For example, if your team’s sent someone ten emails and they haven’t responded to a single one, they’re probably not interested and you can go ahead and remove them from your contact list.
3. Set a goal for every interaction
Before speaking to a prospect, a sales rep should set a goal for that interaction. This will shape and guide the conversation and set them up for success when it comes time to close the deal.
Think small scale here—this goal should be one step in the ultimate objective of closing the sale. Which stage of the sales cycle the prospect is in will impact what this goal is as well. A good goal will benefit both the rep and the prospect.
Take a look at the goals listed at the end of each of the six stages of the sales cycle discussed earlier for ideas on what these goals should be.
4. Schedule follow-ups
Get this: 80% of sales require at least five follow-ups.
So following up is not something to only do sometimes, or “when you have time.”
It’s something sales reps should be putting into their calendar or CRM. To do this, reps need to decide how much time to wait in between follow-ups and schedule them accordingly. Then, calculate that time into the sales cycle’s length and stick to it.
This will not only keep your company’s sales cycle on schedule but help you close more deals than if you didn’t follow-up at all, or not enough.
5. Make signing as easy as possible
In today’s digital-first world, the fact is, the average person doesn’t have a printer.
So telling them to print something, sign it, and email—or worse, fax—it back is kind of a big ask. It almost makes them think, “do I really want this?” making it an opportunity for customer drop-off.
Get with the times and check out electronic document software like HelloSign, DocuSign, or PandaDoc.
These platforms let your reps create digital contracts, collect digital signatures, and do it all via email—on desktop or mobile! You can even send automatic follow-up emails when you don’t hear back, and confirmation receipts when you do.
Psst… not only will this make things easier for your clients, but it’ll make your reps’ lives easier too. No more manually tracking, compiling, and organizing paperwork. It’s a win-win.
Ready to build a solid sales cycle?
Sales cycle management is a crucial skill for both sales managers and sales reps. A shorter sales cycle could help your team close more deals, generate more revenue, and turn your sales process into a well-oiled sales machine.
Use the tips in this article to start optimizing your sales cycle today.