Whatever kind of business you run, sales are likely a part of your day-to-day operations, and you know that focusing on sales is important. But have you taken the time to define your sales cycle for your team? Many business owners assume that their sales team already knows. However, taking the time to create a detailed definition of the sales cycle that is specific to your company and relaying it to all team members is an endeavor that is worth the effort – it will benefit both your customers and your team’s sales goals.
What is a Sales Cycle?
First, the definition of a sales cycle. Putting it in the most basic of terms, the sales cycle is the process of steps taken to close a sale. The sales cycle encompasses all the steps and activities that your salespeople perform taking a customer from a lead to a completed deal. After the closed sale, the final step is to ask the customer for referrals and then the cycle begins again with new leads.
Reasons You Need to Define the Sales Cycle
Having a defined sales cycle for your company is beneficial for numerous reasons including:
- It allows you to predict your revenue. Because a well-defined sales process is repeatable and predictable, you are able to forecast more accurately.
- It allows you to identify areas for improvement. When your sales cycle is defined and followed, you can see what is working and what isn’t, allowing you to make adjustments as needed.
- It allows you to integrate new sales team members quickly. Providing new staff with a clear definition of the sales process will allow them to acclimate faster.
- It gives you a process to manage and analyze. With a distinct system in place that is followed by all sales staff, you instantly have a process that is easier to monitor and measure.
Setting Your Pipeline Stages
The first step in creating a clearly defined sales cycle is identifying the stages of the sales process for your company. The following are the generally accepted stages, but you may find that yours vary a little.
- Prospecting – At this stage, potential customers are only leads.
- Setting the appointment – With a list of leads in hand, this stage is about making contact and setting an appointment to move prospects to the next stage in the cycle.
- Qualifying the prospect – This stage may have been completed during the cold call or the appointment, depending on whether the prospect has time for a lengthy conversation. Qualifying the prospect involves making sure that they are indeed a good candidate for your product or service, and whether they are likely to buy.
- Making the presentation – At this stage, salespeople make their pitch, being sure to customize the presentation to fit the prospect’s needs.
- Overcoming objections – The key to this stage is to be prepared by knowing common objections and how to handle them.
- Closing the sale – This is the stage when the prospect becomes a customer by buying your product.
- Asking for referrals – According to an article by Wendy Connick at The Balance, “This is hands down the most commonly neglected step. Too many salespeople are so relieved to get a sale that they grab their things and race out the door the second they get the chance, for fear the prospect will change their mind!” But it is the perfect time to ask customers for additional business.
Defining the Stages to Suit Your Business
After you have determined the stages in your company’s sales cycle, it’s time to clarify them and give them definition. Utilize your sales team for this; they know your customers best.
- Know your customers. Consider your customers’ buying process and what the key decision points are from their point of view.
- Discuss the stages of the sales cycle with your team, getting their feedback and understanding.
- With your team, check that your sales cycle stages match up with your company’s usual sales scenarios
- Review the sales cycle stages with your team ensuring that everyone is on the same page and has the same understanding of the stages.
- Reevaluate the stages periodically and make adjustments as needed.
Are You Using the Right CRM for Your Sales Cycle?
Now that you have your sales cycle defined it’s time to evaluate whether your CRM is the right one for your company. A blog post on the Capterra website says it this way, “Before you can ever begin searching for the best CRM system for your company, you need to establish your sales process. Whether your team already has a concrete plan in place or is still trying to prove the best method to get to your customers, this is the moment in the buying process to develop a system of how your customers are going from finding you to buying from you. As you fill in the sales funnel, make an effort to understand each little set along the way that helps to move the buying process forward.”
Once your sales cycle is defined, your CRM is working for you, and your team is on the same page, the sky is the limit for closed sales.