You find the perfect prospect. You reach out to them, dig into their pain points, and explain how you have the solution. You deliver the perfect pitch. But then their budget gets pulled at the last minute, and the deal falls through.
Sales is difficult. Even when you do everything right, there are no guarantees. So it’s concerning that 44% of executives believe their organization isn’t handling their sales pipeline effectively.
If you’re going to make more money for your business, you need to iron out the kinks in your sales cycle. Here’s how to do it.
What is a Sales Cycle?
Your sales cycle incorporates every step in your sales process, from the moment you first identify a potential customer, to your follow-up communications after closing a deal. As such, it has two distinct uses:
- Acting as a roadmap for salespeople to follow, making your process more efficient and thereby saving money on customer acquisition
- Mapping a prospect’s journey from awareness to purchase
Every business has a slightly different sales cycle, with different numbers of steps, and different stages involved. Here’s an example of a pretty detailed sales cycle, but yours may require fewer (or more) steps:
Sales cycle management is all about tracking actions and behaviors throughout the various steps of your cycle, then fine-tuning your approach to best suit the needs of your prospects.
In short, it’s about finding the optimal way to sell your product to your target audience.
What Steps Should I Include in My Sales Cycle?
As I’ve already noted, no two sales cycles are completely alike.
There’s no such thing as a “perfect” sales cycle, because there are simply too many variables (more on this later).
However, there are a few general steps that feature in most cycles:
#1 Prospecting & Researching
Without prospects, you don’t have a sales cycle, because you’ve got no one to sell to!
Depending on the makeup of your business, you could be using a range of tactics to generate prospects, such as:
- Buying lead databases
- Cold calling and cold email
- Inbound marketing
- Search marketing
- Outsourcing to a third-party lead generation company
Whichever tactics you’re using, they should be underpinned by your ideal customer profile (ICP). This is a definition that helps your sales and marketing team understand whether a potential prospect would be a good fit for your product. Your ICP should be made up of a bunch of demographic and contextual information:
Demographic Information Examples:
- Job title
- Skills and qualifications
Contextual Information Examples:
- Has the business just launched a new product?
- Has it recently expanded into a new territory?
- Has it started a recruitment drive?
- Has the individual prospect recently changed roles?
- Has the prospect connected with one of your rivals on LinkedIn?
Having built up a list of prospects, it’s time for your sales team to reach out to them. There’s no one-size-fits-all approach to doing this. Instead, the way you connect with a prospect will depend on their position in the sales funnel.
What do I mean by this?
Well, if a prospect came to you by clicking a social media advert and downloading an e-book, they’re likely at the top of the funnel.
They’re looking for answers to a specific pain point, rather than researching a purchase, so it’s too early for an in-person meeting – reach out via email instead. This is also true to webinars, opt-ins, and other freebies.
This is how a company like LFA Capsule Fillers nurtures new prospects. Through their opt-in form they find out more about the person such as their name, email, and business type. The information is then used to build a connection with the prospect by giving them valuable information via email.
After you build a relationship with your potential customer, you can then consider pitching a product of yours and trying to get them to make a purchase.
Alternatively, if they visited your website and requested a product demo, they’re clearly much further down the funnel, so give them a call and arrange a face-to-face meeting.
You should already have a good understanding of who your prospect is based on your research in part #1.
Now’s your chance to determine whether they’re really a good fit by asking questions like:
- How much of a priority is it for you to solve this problem?
- How much budget do you have to solve it?
- When are you looking to have a solution in place?
- Who is involved in your decision-making process?
- Who has ultimate responsibility for making a purchase?
Some salespeople find qualifying difficult, because they don’t have the confidence to discard unsuitable prospects. But that means they risk wasting a ton of time speaking to people who were never going to buy in the first place.
The best salespeople treat qualification as a race. Whether you move a prospect to the next step or disqualify them as unsuitable, that’s still a positive result.
Unfortunately, the majority of your prospects won’t be immediately ready to buy; they’ll need a little help to reach that point. This is where salespeople really earn their money by nurturing prospects down the sales funnel.
Essentially, nurturing is all about finding ways to keep the conversation moving – most commonly via email and social media – while ensuring the discussion becomes increasingly focused on your product and the value you provide. It involves sharing information that’s useful to your prospect, such as:
- Blog posts
- Industry news
- Trends and predictions
It could also entail targeting your prospects via social ads, compelling them to return to your site when they’re ready to make a purchase.
The best thing to do as a beginner would be to experiment with various ideas- offer an eBook, retarget social ads, or invite prospects to listen to your podcast episodes– the possibilities are endless. You can then track the email analytics to see how your list is responding. A service like Contact Monkey would help you do that with their tracking features.
The moment’s right: it’s time for the big pitch. Unless you’re a brand new business, you’ll presumably already have some sort of pitch that showcases your solution and demonstrates your value.
One piece of advice: personalize your pitch as much as possible. Highlight all the ways you can resolve your prospect’s specific pain points, and emphasize exactly what that’s worth to them, whether through efficiency savings or revenue generation (or some other key number).
#6 Handling Objections
However smoothly the sales cycle has gone up to this point, you’ll almost certainly encounter a few objections.
Hopefully, you should know your prospect well enough by now that you’ll be able to anticipate most, if not all, of those objections. Common examples include:
- We’re looking at your competitor’s solution, too
- Your product lacks certain features
- I don’t have the bandwidth to roll this out right now
- This isn’t our biggest priority at the moment
- I’ve seen negative reviews about your product
- We can get this cheaper somewhere else
Make sure you have an answer in place for all of these, and more – don’t just rely on your ability to think on your feet!
Once you’ve pitched your solution and handled all the objections, closing the deal should come naturally.
Again, you should know your prospect well enough to understand what sort of “closer” will work best. Some prefer a direct approach, like: “Are you happy to go ahead right now?” Others favor a gentler close, such as: “What do you want our next steps to be?”
Having closed the deal, stick around to answer any questions, and follow up as soon as possible with an email setting out everything you agreed in the meeting.
How Long Should My Sales Cycle Last?
As the following data shows, sales cycle length isn’t an exact science:
Generally, this tells us that existing customers close faster than new ones. That’s unsurprising – after all, they already know you, so they should have fewer objections and require less nurturing. Indeed, 84% of existing customer sales cycles last six months or less.
On the flip side, almost one-fifth of new customer sales cycles take more than a year. That sounds like a long time, but if you’re selling to enterprises and have a high-value product, the rewards might be worth the effort.
Of course, these are only rough benchmarks. In reality, any number of factors can impact the length of a sales cycle, including:
- Product cost
- Product complexity
- How many decision-makers are involved on the prospect’s side
- How well-known your brand and product is
- The experience of your sales team
For example, a big corporate law firm seeking a monthly retainer from an enterprise-level prospect will almost certainly have a longer sales cycle than a personal injury lawyer pitching to consumers. Take Adams and Reese, one of the most well-known law firms in America- they have a far more open-ended first contact process than say a lawyer who is niched down.
If you visit their site, you will find a list of services they offer, what their team is up to, and how to contact them at their various offices or by phone.
Hasner Law, on the other hand, is a smaller firm with a focus on personal injury law. Since they are more niched down and approached by fewer people, they can afford to offer free consultations to pretty much anyone who is interested.
This is possibly also because the process of a personal injury claim is much shorter than say a bankruptcy filing.
In general the length of your sales cycle has many factors at play- what sort of company you have, how many customers you deal with, the industry that you are part of, etc.
How Can I Speed up My Sales Cycle?
Faster isn’t necessarily better. If your sales cycle lasts less than a month, maybe you’re missing valuable steps that would help you close bigger deals or improve your conversion rate. However, if your sales cycle is longer than that of your peers, you should definitely take steps to cut it down. Here are five steps to help you do that:
#1 Automate Low-Value Tasks
Astonishingly, the average salesperson only spends a third of their time actually selling.
Much of the rest is spent on “busy work”; things like scheduling meetings and adding prospect information to your sales CRM. It stands to reason that if your team had more time to sell, they’d be able to close deals faster, so your sales cycle would be shorter.
Automation is the answer. A bunch of time-consuming, low-value tasks can be partially or fully automated, freeing up a ton of time for your reps to get on with making you money!
#2 Dig Into Objections
However well you prepare ahead of a pitch or before calling a prospect for the first time, you’ll occasionally hear objections you’ve never encountered before. In those situations, it can be tempting to gloss over the question and get back to your pitch. But you’ll see better results if you take the time to scrutinize those objections.
Let’s say your prospect tells you they don’t have authority to make a buying decision. You could follow up by asking who you should be speaking to instead.
But by digging a little deeper, you might find your prospect simply lacks faith in your product and doesn’t feel comfortable presenting it to the board. So you need to understand and handle their real objections first, before reaching out to someone higher up the ladder.
#3 Be Upfront About Pricing
Sure, you don’t want to give prospects a reason to object – they likely have enough objections of their own! But you should never hide the truth when it comes to pricing.
If you’ve got the qualification part right, it should be clear that your prospect can afford your product, and that they’re willing to pay for an effective solution to their pain point. In this context, price really shouldn’t be the biggest stumbling block, so be completely transparent about how much your solution will cost, including any added extras. It’ll make you seem more trustworthy, too.
A lot of SaaS companies tend to have a ‘Contact Us’ button instead of a pricing page. I would suggest having a both like we do on our Pricing page. This allows interested customers to have a bird’s eye view of what they are possibly going to have to pay while also giving them the chance to message us, if needed.
#4 Double Down On Top-Performing Channels
Where do your best prospects – those that turn into qualified leads, and eventually into paying customers – come from? Dive into the data and find out which sources are delivering the best results, then focus on maximizing performance from those sources.
For example, say you see the highest conversion rates from inbound prospects who hand over their details after seeing an advert on LinkedIn and downloading an e-book. Clearly, it’s in your interests to ring every last ounce of performance from this tactic, by:
- Increasing your advertising budget so more people see your ads
- Optimizing your ads more frequently to drive down your costs and capture prospects more efficiently
- Producing more e-books, so you can refresh your campaigns more often and have more lead magnets to offer prospects.
- Dedicating more headcount to this channel, so you can reach out to those prospects faster and nurture them more effectively
Focusing on the data so that you can better understand how well each lead magnet is doing would be a good place to start for a marketer. This will allow you to use the data to then create better content down the road and improve your sales funnel.
#5 Map Out the Buying Process
“The customer is always right.” While this phrase can be useful from a customer service point of view, it doesn’t necessarily help your sales team.
Think about it: your reps sell your product day in, day out. They’ve been to hundreds of pitches and spoken to thousands of prospects. They understand exactly what the buying process looks like, from start to finish.
On the other hand, your prospect might never have been involved in the sales cycle before. They may never have used a product like yours, so they don’t know how to move things forward.
Don’t be afraid to guide them. Talk them through each step of the process, highlighting potential obstacles along the way and handling likely objections before they arise, then work together to build out a detailed timeline that suits both parties.
After all, if you’re controlling the timings, there’s no way your sales cycle should be taking too long.
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About the author
Freya is the founder of the personal finance blog CollectingCents that teaches readers how to grow their passive income, save money, improve their credit score, and manage debt. She has been featured in publications like Business Insider, Fox Business, the Huffington Post, and GoBankingRates.