Sales cycles: An actionable guide to sales cycle management

by Steli Efti
team-meeting-sales-cycle

Companies with a defined sales process see 18% more revenue growth than companies without one. Think about that.

Are you making as many sales as you want to? Bringing in all the revenue you deserve? Building enough customer relationships to ensure the long-term success of your company?

If you answered "yes" to these questions, congratulations. You don't need this guide. See you later.

But if you think your sales team can do more, welcome. This is the ultimate guide to sales cycles (also known as sales life cycles).

The sales cycle, in a way, is the heart of your company. It's how you turn people who have never heard of you into customers. That's how you generate revenue, hire more salespeople, build your empire, and retire to your own private island.

(Want my best advice on every aspect of building, managing, and scaling a winning B2B sales team? Download a free copy of The Sales Library today! It's packed with actionable advice, templates, checklists, scripts and strategies.)

We're going to cover everything you need to know about sales cycles, from what they are to how to document them to how to make them better. Here's what's in store:

Let's start with the basics.

What is a sales cycle?

A sales cycle is a collection of steps that salespeople take to turn a lead into a customer. That includes everything from prospecting to closing the sale (and sometimes even beyond closing). Sales cycles vary between companies and industries, but they usually have a similar sequence of steps.

seven-step-sales-cycle-processThis, for example, is a six-step sales cycle diagram that includes everything from prospecting to closing. Image credit: Daniel Nilsson via SlideShare.

The steps in your sales life cycle will differ from other companies' processes. Here are some of the stages you might include in your sales cycle:

  • Prospecting
  • Qualifying
  • Researching
  • Connecting
  • Setting up appointments
  • Pitching
  • Addressing objections
  • Following up (we've written an entire book on that!)
  • Closing
  • Asking for referrals

Most companies don't have this many steps in their cycle. Six or seven steps is usually enough. Later, we'll see a sales cycle template that only has three steps—as well as a sales cycle flow chart with over a dozen.

What influences the number of steps in your process? It’s mainly what you sell, how you sell it, who you sell to, and your sales goals, among other things. You'll find what works best for your team.

7 reasons why you need a sales cycle process

Whether it's documented or not, you have a sales cycle. If it's not documented, you might have many different cycles. Every salesperson has their own habits and processes. And it might work... but it's a mess.

That's a shitty way to do things. You need a documented sales cycle that every sales rep can use.

If your salespeople already have their own sales processes that are working, why should you step in and force them to use a different one? You trust your salespeople to do their jobs, so why tell them how to go about it?

Your reps might make sales with their own cycles, but there are huge benefits to a standardized sales process:

  1. Consistency: Sales reps don't forget or skip steps in the process.
  2. Transparency: Sales managers can see where reps are killing it and where they need work.
  3. Repeatability: Your sales teams can stick with what works, based on data gathered from your company.
  4. Easier handoffs: If every sale goes through the same stages, changing from one salesperson to another is no problem.
  5. Prioritization: Sales reps know where to spend their time to make the biggest difference in your pipeline.
  6. Faster onboarding: Reps can ramp up quickly when they have a document outlining every step they need to take.
  7. Predictability: It's easier to forecast your sales when you know how long each stage takes.
  8. Increase sales: All of the factors above contribute to a better, more effective sales program.
  9. Better sales ROI: An improved sales process means you get more out of every dollar you spend on your sales team.

Depending on how your company is currently running its sales program, you might see more benefits, too. But even with just these, taking the time to establish and document your process will be worth it.

Download our free Sales Library for strategies and templates you can use when developing your sales cycle process.

Sales cycle stages: 8 steps to sales success

sales-cycle-stages-to-sales-success

Every sales team has their own sales life cycle. But there are some general steps that are common among most companies. These are the eight sales life cycle stages that we use at Close.

We've used them for years, and they've helped us build a kickass sales pipeline. You can use them as a template to start documenting your own sales process. Or you can start from scratch; either works.

Here's our proven-to-work, eight-stage B2B sales cycle:

1. Prospecting

You need raw material for your salespeople to turn into gold—this is where you find that material. During prospecting, you'll find the companies you think might be interested in your product. You might use

At this point, you'll have two buckets: suspects and prospects. Suspects are companies you think might be interested. Prospects are companies that are definitely interested. Sometimes, sales teams use other terms like “sales leads.” What’s most important is that internally, within your company, you have clear definitions for the nomenclature you use.

Prospecting is often part of the marketing department's responsibilities, or in the hands of sales development reps. So this is often also called the sales and marketing cycle; they're pretty much the same thing.

2. Researching

Your suspects and prospects have needs. If you can meet those needs, you'll get the sale. So how do you know what they need? You research.

Check out their social media feeds to see what they talk about, and find something you can connect over. See where they've been mentioned in the news to get an understanding of where they are in the company lifecycle. Look at org charts to see who the decision-makers are. Trawl funding news to see if they have cash to spare.

Crunchbase-showing-results-of-funding-rounds-for-companiesCrunchbase is a popular source of information on companies that you can use during the research phase of your sales life cycle.

Depending on the size of the deal and the sales process, sales reps should spend some time figuring out how to convince the prospect that they should buy. It might feel like a waste of time at first, but it can sometimes pay off. But don’t go overboard; over-researching your prospects is just as bad as not researching them at all.

3. Connecting

We're still laying the groundwork for selling here. Sales reps get in contact with qualified prospects during this stage and try to set sales appointments.

Setting appointments can be a complicated process in itself. It often requires sending multiple emails, leaving lots of voicemails, rescheduling meetings at the last minute, and tons of following up. But when this step is done, your salespeople will have a meeting with a prospect—and that's crucial.

4. Presenting

It's time to sell, and this is where your sales reps get to shine. The type of presentation you do depends on what you're selling. You might show the prospect around your software, do a demo of your product, or present an outline of how your services will benefit the prospect.

sales-cycle-stages-presenting

Whatever the case, this is the step where you convince the prospect to buy. This is selling.

5. Addressing Objections

Before you close a deal, your sales reps will have to deal with sales objections. Here are a few objections they might come up against:

  • "I can't make a decision now, call me back next month."
  • "We don't have the budget for this."
  • "We like the way we're doing things now."
  • "I'm already in a contract with another vendor."
  • "Your product doesn't have all of the features we need."
  • "Send me more information and I'll get back to you."
  • "I don't want to commit to a contract."

They can be frustrating as hell. But dealing with objections is a part of the sales life. Reps need to be ready to deal with each one of these. Experienced reps know that certain objections come up more often than others. Include those common ones in your sales documentation so all of your reps have an easier time dealing with them.

You might be tempted to put addressing objections in the same stage as making the pitch. They're part of the same conversation, right?

Yes, but listing this step separately encourages your sales team to better prepare for objections.

When a rep looks at your documented process and they see "address objections" listed as a sales life cycle step, they know they need to be ready for it. Even if they think they're ready for the most common objections, this stage encourages them to spend a little more time getting ready. And that's always a good thing.

6. Closing the Sale

Once the customer is satisfied that you've addressed their objections and can solve their problems, it's time to close the sale. Present the contract, get the prospect to sign, and get yourself a new customer.

Unfortunately, it's rarely that simple. A lot of other things need to happen. You'll often have to wait for the deal to get approved by higher-ups, or have a few final negotiations to finish. You might even have to run your presentation again.

This is another step where your sales rep gets to do what they do best. Give them the time and resources they need to close a great deal.

closing-the-sale-handshake

Many people think this is the last sales cycle stage. But we're not done yet.

7. Delivering

Your prospect signed the contract and it's time to deliver. Get your product to your customer and make sure they know how to use it. The sooner they start seeing a quantifiable benefit, the better.

This might mean getting your implementation or customer success teams involved. Do whatever you need to at this stage to help your customer get the most out of your product.

8. Asking for Referrals

Referral sales are the best. You can skip right to setting an appointment when one of your customers tells you about another person who probably wants your product or service. Getting a referral saves you a ton of time.

But your salespeople need to ask for those referrals. And there's no better time than right after you make a sale.

Your customer just agreed to give you money for your product—so they're obviously excited about it. This is when they're most likely to want to share what you're selling with their contacts.

Asking for a referral right away isn't easy, but it's absolutely worth it, and it's a crucial part of the eight-step sales life cycle.

Bonus Tip: Set up reminders to follow up with your customer after three, six, and twelve months.

If you want to stay on top of your follow-up game, we've got something for you: Our CRM has powerful follow-up features that suit your workflow. You can easily set reminders to follow up with a contact using the tasks feature, when sending an email, or using automated email sequences.

Close-showing-follow-up-tasks-for-salesperson

Automating follow-up reminders will save you more time than you can imagine.

With Smart Views, you can even create dynamic lead lists of prospects you should follow up with in bulk!

(And no matter what software you use, you should definitely claim your copy of my book The Follow-Up Formula, where I share actionable advice on how to follow-up effectively.)

See how they're doing, ask about referrals, and provide any help you can to make sure they're succeeding with your product. You'll get more repeat and referral customers this way.

Sales cycle length: What to aim for and how to shorten it

The length of the sales life cycle varies between companies and industries. But there are some benchmarks you can use to gauge your own process.

average-b2b-sales-cycle-length-chart

Here's what CSO Insights found for the average sales cycle length in B2B sales.

One study found that 28.2% of B2B companies had a 4–6-month sales cycle when selling to new customers. About 20% made the sale in 1–3 months, and 18% took over a year. That's a long time.

In enterprise sales, a 6-18 month sales cycle is not uncommon at all.

When selling to existing customers, though, companies were more likely to close the sale in 1–3 months. Which is one reason why repeat customers are so valuable.

These are very rough guidelines. There are a huge number of factors that influence the length of your sales cycle. Here are a few:

  • Cost of your product
  • Average company size of your customer
  • How well your target market knows your company
  • Your sales win rate
  • Sales process quality
  • Sales rep turnover

Any of those factors can make your sales cycle longer or shorter. To find your own sales cycle length, use a CRM that helps you track leads through the entire process.

Sales cycle time: typical, full, long, short

Knowing the length of your sales cycle in relation to your industry average is nice. But keep a close eye on how long it takes to close a sale compared to your own average, too.

With detailed tracking, you get an idea of how your typical and full cycles work together and see if you're working with a long or a short cycle.

  • Typical sales cycle: This is the sales cycle that your reps usually go through. It might be the eight-step process above or something similar. In the B2B world, a typical sales cycle is in the range of 4–6 months.
  • Full sales cycle: There may be times when your reps go through additional steps. For example, if you work with large enterprises, reps might need to spend time finding the right decision-maker to get in touch with. This is your full sales cycle, and it could take a year or longer.
  • Long sales cycle: If your sales cycle is longer than the average in your industry, you have a long sales cycle. This isn't necessarily a bad thing. But it's good to know. If your cycle is a year or more, you can confidently say that it's a long cycle.
  • Short sales cycle: If your cycle is shorter than similar companies, you have a short sales cycle. B2B companies completing their cycles in under four months are reliably short-cycle companies. This is probably an advantage—but if you're skipping valuable steps, it could be a liability.

How to shorten the sales life cycle

The best way to shorten the sales cycle is to create a sales process focused on efficiency and repeatability. It's not about skipping steps. It's about making them more efficient. There are two ways to do this:

  • Spend time gaining insight into the companies you sell to.
  • Parallelize processes so you can take multiple steps at once.

If you can do those two things, you'll shorten your sales cycle and make more sales in a given time.

This might sound simple, but it can be really hard. When you ask a buyer what the process for closing is like, they'll give you a short answer. They'll say, "Well, my boss has to approve this, then it'll go through purchasing, and then we're in business."

But that's rarely the case. There are almost always more steps involved, and you'll have to dig to get more information on those steps. Once you have that information, you can start parallelizing your processes.

This has its own difficulties. You need clear documentation of what your sales cycle includes, as well as which stages of the cycle are required for future steps. At some point, you should find that one step doesn't need a previous one to be completed.

That's when you create parallel processes. For example, you might find that your customers typically need to get approval from their boss and then get approval from the legal department. Instead of waiting for the first approval, why not get started on the second at the same time? This can shorten your sales life cycle by days or even weeks.

Experiment with different tactics for shortening your sales cycle. When you find something that works for your team, stick with it.

5 sales cycle examples and templates to learn from

Creating your own sales cycle documentation from scratch is a lot of work. It's easier to start with a template or build from someone else's example. Here are five good options:

1. How to build a sales process that gets you results and scales with your business

From prospecting to following up and asking for referrals, it'll help you develop a repeatable, fast sales cycle.

Key takeaway: Selling starts long before the sale.

2. 7 stages of the sales cycle

This flow chart (near the end of the linked article) breaks down the stages of the sales cycle into steps taken by the customer, your sales team, and your account managers.

sales-life-cycle-flow-chart

Lucidchart's sales life cycle flow chart includes multiple groups and options for progression. You don't need something this complicated, but if you're willing to put in the time, go for it!

Key takeaway: It's not just the sales team that's involved in your sales cycle.

3. How to design a sales process for B2B sales

You can put a lot of detail into your sales process, and Nilsson shows you exactly how to do that.

Key takeaway: There's always more to the sales cycle than you currently have documented.

4. Three-step sales process (aka, the default process)

Want to start with the most minimal sales cycle example? Here it is: qualify, pitch, close. That's it.

Key takeaway: You don't have to use a highly complex sales process if you don't want to.

5. How to design a killer sales process

60-minute-sales-cycle-infographic

You can think of your sales cycle on the scale of months or on the scale of minutes. Hit the link above to see the rest of this great infographic.

Step 2 on this page details a sales cycle template that documents the first 60 minutes of contact. Your sales might take longer, but this diagram is a good reminder to focus on details when you're documenting.

Key takeaway: Be detailed in your sales cycle documentation and focus on incrementally improving each step.

7 tips to improve your sales cycle process

Your sales cycle is the heart of selling at your company. If it doesn't work, it's not moving you forward. You're stuck. And you need to make it better to get unstuck. Here are seven ways you can do that.

1. Improve your lead generation

The first step in your sales cycle is filling your pipeline with leads. This affects every step thereafter. If you have a ton of low-quality leads, your research phase will take forever and high-quality leads will slip through the cracks. Your reps will spend a lot of time weeding out bad leads.

By better qualifying your leads in the first place, you make every subsequent step more efficient. Want to see how we generate a huge number of high-quality leads at Close? Here's how we got 200,000 leads in four years.

2. Collect and analyze data

If you don't know how your sales process is performing, you can't make it better. By using a CRM's sales cycle tracking, you can see how every lead goes through the sales process, how long it takes for them to move from step to step, your team's win rate, and a bunch more useful information.

Close-CRM-showing-sales-opportunities-with-value-and-confidence

Close has all the information you need to start analyzing and improving your sales cycle steps.

You can use sources of data other than your CRM, too. Ask your sales reps how they go through the process to see if you're missing any steps. Keep collecting information no matter how developed your sales cycle is—you can use it to improve your sales process, monitor your improvements, and keep an eye on how your sales team is performing.

3. Address bottlenecks

No matter how well you think you've built your sales cycle, there will be bottlenecks. Every process has weak points. The data you collect from your CRM and other sources can help you address them.

Look at these numbers regularly to see where you can improve. Maybe your objection-handling stage takes longer than you think it should. You could put together a document for prospective customers that outlines your answers to the most common objections. Think creatively about how to make your weakest stages stronger.

4. Score leads to help sales reps prioritize prospects

Not all prospects deserve a lot of your sales team's time. Scoring leads makes it easy for reps to see who they should call, email, or put off until another day.

Do this during prospecting. Figure out what your best customers have in common, then create a scoring system. Are large clients more likely to buy from you? New companies? Mission-driven organizations? Companies with outdated software? Take the time to figure this out so you can guide your sales team on where they should spend their time.

5. Keep all of your communication in one place

Having call recordings, SMS logs, and emails in a single place lets reps make more informed decisions throughout the sales process. When you make a hundred calls a day, you forget what you talked about at 8:00 AM.

Close-CRM-showing-contact-history-with-customer

Notes on calls, emails, texts, and in-person meetings should all be stored in a single location to keep things organized and easy to reference.

A sales-focused CRM will seriously boost your team's productivity.

6. Automate wherever you can

You can create and go through a sales cycle manually, but why would you? There are so many ways to automate it. You can make prospecting, emailing, calling, following up, and just about every other part of your sales cycle easier with automation.

In our own CRM, you can automate dialing, and make every rep more efficient. You can automate email sequences to save time and be more consistent. You can reach 60% more leads with less effort. Who couldn't use that kind of help?

 

7. Document your sales process

If you've made it this far, you're probably already committed to documenting and standardizing your sales cycle process. But I'll say it again: have a clear, concise explanation of your sales cycle—and keep it where reps can find it.

It makes onboarding easier, it helps reps when they space on what to do next, and you can reference it when you're looking at metrics. It might take a while to create this documentation, especially if you've never documented a sales cycle before. But it's worth it. Just do it. Trust me.

Spin up your sales cycle for better sales and more revenue

So there it is—everything you need to know about sales cycles. We've covered a lot of information here, and it might feel a bit overwhelming. But everything we've covered will help you create, document, and improve your sales process.

That means more sales and revenue. That's what we're all after, right?

Don't be stressed about going from no sales cycle to a perfect one. Start with one step.

If you have no sales cycle at all, start collecting information from your reps to see what they're doing.

If you have a vague idea of your sales process, look into your CRM's sales cycle information to get more exact details on what's happening and how long it takes

If you're confident in your current sales lifecycle, look for ways to make small improvements in each stage.

Just start with one step at a time, and you'll end up with an awesome sales process that gets you great results in no time.

The Sales Library contains actionable advice, strategies and templates for every aspect of sales cycle management—and you can download it free today!

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