What is a Sales Cycle?
A sales cycle is a process that companies undergo when selling a product or a service to a customer. This consists of a series of steps associated with closing sale. Many companies have different steps and activities in their sales cycle, depending on how they define it as per their need.
The relevance of Sales Cycles
For every company, it’s important to identify the stages of their sales cycle, and come-up with key metrics that they can use to measure their team’s performance at every stage.
Why is this required? First, having an explicit sales cycle makes it easy and simple for you to train new sales reps. You’ll be equipped to provide these reps with a well structured roadmap, which lets them familiarize themselves with your process.
Above all, having a clear and better understanding of your sales cycle will also empower you to structure your team more smartly and effectively. Suppose you’ve analyzed your sales cycle, and you’ve found that there’s a bottle-neck when it comes to following up with leads. Generally, you’ll want to re-assign roles to your team to make sure that enough is being done at this step.
Last but not least, monitoring and keeping track of your sales cycle also helps you to efficiently evaluate your team’s performance. If the average length of your sales cycle is reducing month-on-month, that means your team is effectively closing their leads in a shorter period of time, which is a great improvement. It’s also important to benchmark the length of your sales cycle against that of your competitors, so you can see how you’re improving and stacking up.
Stages of Sales Cycle
Sales cycles might vary from company to company. Depending upon the type of industry you’re in, the market share you have, the type of product you’re selling, and many other factors play a part in affecting the stages of your sales cycle. Thus said, most sales cycles involve some or all of these below seven steps:
1. Sales prospecting
The sales process commence when your sales development reps start prospecting for new leads. At this point, they look at their ideal customer profiles, identify the potential clients they’d like to reach out to, and decide how to approach them.
Here’s a question that we come across: what’s the difference between lead generation and sales prospecting? A few marketers use these terms interchangeably, but there is a difference between these two activities. With lead generation, you’re simply collecting contact information from your leads; whereas with sales prospecting, you’re indeed reaching out to these leads and establishing that they’re interested in your product.
2. Making contact
Once your leads start trickling in, it’s the right time to make contact with those leads. Before deciding and choosing how you want to reach out to this lead, you’ll have to assess and determine which stage of the Buyer’s Journey they’re at.
Say your new lead has shared with you their contact information in exchange for an ebook download. At this point of time, they’re only collecting extra information about the solution to their problem, and they’re perhaps not ready to make a purchase yet. In this scenario, you might want to reach out to your leads through email, and nurture them before you set up a phone or in-person meeting.
If your lead has filled up a form on your website and contacted you for a product demo or a quote? That’s a clear indication that they’re almost ready to make a purchase. Assuming this in mind, it makes sense to give them a call right away and discuss further action.
Always ensure if your are calling your lead, it should be in a timely manner. Consider this case: 73% – 75% of leads end up doing business with the first company that they hear from. And just for the record, getting back to your lead within 24 hours simply won’t make it. To have the best chances of converting this lead into a paying customer, you should call them back within a minute of getting their information.
What happens if you call your lead, and they don’t answer your call? According to the statistics, it takes an average of 10 to 12 attempts to reach a lead on the phone – so keep on trying, and don’t give up. While we know that the best times to contact leads are Wednesdays and Thursdays between 3 and 5 pm, try and switch your timings up as well. If your lead has their Wednesday or Thursday afternoons dedicated to any weekly strategy meetings, regardless of how many times you try, you won’t be able to connect with them.
3. Qualifying the Lead
Once you have made contact with your lead, next important step is to qualify them. Now, you may have done a few pre-qualifying previously in the sales cycle. Perhaps there was a field on your web-form asking your lead the size of their company, or how much they do in yearly revenue. If you’re positive that your lead is qualified and capable of making a purchase, then it’s okay to skip this step and move on to nurturing them.
If no, then you’ll want to request your lead a set of questions that will help you assess how well they fit into your normal buyer profile. BANT methodology is used by many companies; this stands for Budget, Authority, Need, and Time. Relevant questions to ask may include:
- How hefty is your lead’s budget?
- What is your lead’s job role/title? Are they decision makers, or are they simply conducting research on someone’s behalf?
- What are your lead’s challenges/pain points and needs? Does your product address all these needs?
- How soon does your lead need your product?
Getting an idea of your lead’s budget is especially critical for companies whose services or products are priced at a premium. You would not like to spend long time (three months) nurturing your lead, only to realize that they don’t have the budget to engage your company.
4. Nurturing the Lead
Assuming that the lead isn’t ready to purchase right away, this is where you begin nurturing them and moving them down your sales funnel. However, most marketers and company owners automatically associate lead nurturing with drip campaigns created via CRM software.
Above all putting your lead through email campaigns, for example, you can also retarget them with social media or Google ads. If your lead is active on social media, it’s also possible to nurture them using those resources.
5. Making an offer
Once your lead show interest and starts looking at your pricing page or signing up for trials and demos, this indicates that they’re ready to move ahead and make a purchase. This is very important and at this point, go ahead and make a relevant, targeted offer to your lead.
6. Managing and handling objections
After you’ve made your offer, the ball is in your lead’s court. There’s a high probability that they’ll push back and surface one or several objections to you. Now, your crucial job is to handle these objections, and convince them that choosing your company is the best solution to boost their business.
If your lead says that the price of your product is high, do the calculation and share with them how much 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 set-up and training, and talk about your simple and easy-to-use support channels. You get the idea.
7. Closing the sale
After handling your lead’s concerns or objections, it’s now time to close the sale. Ensure you’ve prepared all the paperwork and forms, and move ahead and ask your lead a closing question. How aggressive your approach should be depends on the attitude of your lead.
By now, you should have analyzed and have a good read about this person. This helps you foresee whether you’ll have more success with an aggressive approach or vice versa.
What happens upon successfully closing your lead? Sales reps might be so relieved to get the sale that they end the meeting and leave as soon as possible, to avoid the possibility of their lead changing their mind. However, you shouldn’t cut short your meeting abruptly – ensure you give your lead the chance to ask any follow-up questions that they may have and walk them through what are the next steps.
Right before leaving your lead’s place, do also give them your business card and ask them to refer their friends to you if possible.
How to enhance your sales cycle
Regardless of whether your sales rep/team is already achieving its revenue targets, or they still have a long way to go, they should repeatedly fine-tune their sales techniques and enhance their sales cycle. Here are a few tips to follow.
1. Minimize low-value work
The average sales rep spends just 35% – 36% of their time selling, with the rest of their valuable time being killed up by low-value work such as service tasks and administrative.
If you are determined to improve your sales cycle, an easiest path is to allow your sales reps to outsource their low value task tasks, so that they can focus more on selling. A CRM system is designed to do all this. It consolidates your customer data from multiple sources, like email, phone, chat, website, etc., and maintains records without any manual intervention.
2. Follow up diligently and ardently
We earlier discussed about the struggle of making the first contact with a lead, but that’s only a small portion of the puzzle. While successfully making contact with your lead is a victory, you’ll still have to work on following up with your them; unfortunately, this may be a pretty long drawn out process.
Interestingly enough, while 80% of sales require five follow-ups before a deal is made, 43% of sales reps give up after just one follow up. Moral of the story? Your sales reps will have to develop thick cover and persevere with their follow-ups. Make use of CRM software for follow-up reminders or even automate follow-up emails.
3. Request for small commitments
Hope, you have heard of the foot in the door technique? With this technique, you’re asking a lead for a small favor. And then another, and another. The more requests your lead accepts, the more rapport you develop and when you go in for the close at the end, it doesn’t seem like such a big ask anymore.
The primary objective with these small commitments (some call them “incremental closes”) is to start small and make it easy for your lead to say yes. For instance, after your first contact with a lead, you might request them for their phone number so that you can get in touch more easily. After you’ve given the product demo, you might ask them to introduce you to the budget authority, or their procurement team.
4. Use social proof
You might have collected several case studies, but you shouldn’t just stick these on your website and call it a day. Case studies are good for building social proof, so get your sales reps to passionately share these with their leads, and nudge them -bit closer to making a purchase.
Bringing up the use cases is also a great way of managing and handling any objections that your lead might have. If a lead is feeling uneasy about whether there will be a steep learning curve involved with your product, for example, show them use cases of other customers who were up and running within a short period of installing your tool.
5. Train your team
We’ve covered several best practices that sales reps can use to increase their sales effectiveness. Now, this last point deals with how directors and sales managers can help their team to improve by ensuring that their reps get sufficient training.
If you are still planning to do so, be sure to come up with sales sales kits and other documents to guide your team through the entire sales process. On top of that, keep an eagle eye on each team member’s metrics. Online CRM software or Cloud CRM provides reports you can use to analyze the performance of your sales team—lead response time, activities, follow ups, deals closed, etc. You may find that few reps are struggling at specific stages of the sales cycle. If this is the scenario, be sure to offer them additional support and resources, and have them shadow and learn from high-performing sales reps if possible.
Using sales cycle management software to boost your process
If you’re still relying on manual methods of tracking and managing your sales cycle, then you’re doing it wrong. Here’s how shifting to a Cloud CRM software or sales cycle management software can help you enhance your sales process.
Just imagine tracking the status of your leads (and when you’ll have to follow up with each of them) in a spreadsheet? If you ask us, this is a disaster waiting to happen.
Luckily, an online CRM software or sales cycle management software allows you to have an eagle eye view of your sales pipeline. You can promptly sort and filter deals to locate specific deals in each stage of your pipeline, and you’ll also be able to spot how many deals are currently under review with a single view.
If you wish to follow up with a lead, make a note within your sales cycle management software or online CRM software, and you’ll get a reminder when it’s time to get in touch. Additionally, you don’t need to access a separate app or tool to make calls or send emails to your leads; you can do this without ever leaving your dashboard.
2. Lead scoring automation and profile enrichment
Most of the sales cycle management software come with automated lead scoring and profile enrichment features. Every lead that enters your system is scored based on their probability of converting; also their profile information is automatically updated in the system as well. To further streamline your sales process, you can also set a rule and get your sales cycle management software to automatically assign the hottest leads to your sales reps.
Bottom line? With a Cloud CRM system, your sales reps will spend less time researching leads and inputting data, and more time on selling. This translates into more meetings, more sales, and more profit!
3. Gauge and Analyzing your team’s performance
Using a sales cycle management software or online CRM software will also make analyzing your team’s performance easy. You’ll get access to all the reports you need in MIS, including sales cycle reports that tell you how long your team is taking to convert their leads into paying customers. Want to do a deep-dive on your team’s performance? MIS report in CRM software will help you track all reports of each rep makes across a time period, and your sales activity reports allow you to tie your sales figures back to specific activities (emails sent, calls made, appointments scheduled, and more).
4. Providing training and support
At last, sales cycle management software or Sales CRM software also help team leaders provide the proper support and training for their team. These software and CRM systems automatically log all outgoing and incoming calls, which can be used as training material for your sales team.
Looking for sales cycle management software?
Salesbabu CRM is a sales cycle management software and CRM software that’s developed to help sales teams shoot up their effectiveness. Our online CRM system comes with all the features that you need, including phone integration and email integration, reports (MIS) and automations, lead scoring, profile enrichment and auto lead assignment functions, and much more.
With SalesBabu CRM, you get free, support over phone and email. Want to explore the features of sales cycle management software? Click the button below to secure your free product demo.