what is it and how to apply it in your business? – WAU
The sales cycle is the average sales time for a product or service. It encompasses several steps ranging from the customer’s first contact with your company to after sales.
Selling is a daily challenge. You probably know this if you have worked or work in the field.
There are numerous obstacles in the relationship with a potential customer to complete a business.
Questions often arise about when and how to take each step of the sale.
The good news is that there is a way to make this process more predictable, or at least establish a script to be followed: the sales cycle.
At Websites Are Us, this is already part of our daily lives. But the model is not so natural even for experienced entrepreneurs.
In this post we will explain what the sales cycle is, its importance, what are the steps and how to operate it, facilitating your sales.
What is the sales cycle?
The sales cycle is formed by a series of phases necessary to sell a product or service, which begins at the customer’s first contact with your company and ends at the post-sale.
That’s when we return to the initial action prospecting for new leads, so the sequence is defined as a cycle.
There are processes occurring in parallel in the sales cycle. Are they:
- the financial: you invested to have a product or service available to your client, at the end of the process, you expect to receive your capital back at a profit;
- the sale: it is basically a schedule of tasks to deliver your offer to the customer;
- the purchase: the process “thought” by the customer according to his own buying habits.
We can think of the financial result as a requirement, because without a profit the business cannot be maintained.
Sales, on the other hand, works well when we consider the customer’s habits and desires when designing it. It guarantees a good shopping experience and makes the cycle more effective.
But a great catch to be successful with the method is to realize that the sales cycle is projected over time.
If you spend months negotiating with a client, the financial cycle is not completed, in extreme cases, this will mean a lack of capital for the business.
In addition, the customer can end the deal at any time for his own reasons or because he does not like the shopping experience – he has his own process and his own timeline.
Finally, if the time spent to end your cycle can be reduced, you increase your productivity and, as a result, your sales result.
The importance of the sales cycle
Find someone very concerned about shortening the sales cycle and he probably works with “complex sales”, which in most cases have a more or less long cycle.
Longer cycles generate more attention and concern with their reduction, but short cycles can be a “trap”, because their importance is not so evident.
But how many times have you wondered if it was the ideal time to contact a customer?
It is quite common to wonder if he has had time to think about the proposal and it is time to request his answer, for example.
Have you ever imagined how great it would be to know exactly the right time to act at each stage of the sale? In order to make the process more fluid, natural and pleasant?
Knowing the procedure for each step increases productivity and customer satisfaction with the purchase.
The stages of the sales cycle
It doesn’t matter if you work with complex sales, retail or even selling ideas, there are some common steps for most segments.
These steps are:
- prospecting: the first task is to find your potential customers;
- initial contact: the first contact can occur through an email, a call, sending a gift, at a business fair or digitally, with the customer doing a search and finding content like the one you are reading;
- qualification: not all new leads are ready for a purchase, in this step we separate the mature ones to promote the next step with them;
- presentation: it is the moment of contact with the customer to present your product or service and your commercial proposal;
- evaluation: it is the negotiation stage, part of which may include the seller’s waiting time, when it is the case to leave a proposal for analysis by the customer;
- closing: it is the stage of making the purchase through the formalization of the business;
- after-sales: when you check customer satisfaction and request referrals or references.
Some companies may need to add or delete steps. For example, you may need to gather information to prepare a personalized presentation.
In other cases, qualification occurs before prospecting, which is very common in companies that serve few customers that generate high revenues.
Qualification after the first contact occurs mainly when we use content marketing to attract customers.
In this case, we are relating to people who are interested in some matter related to our activity, but he may not yet be ripe for purchase or even just being curious about the topic.
You may be interested in these other sales content!
Sale in installments or in cash: know which is the best option!
Online sales: 8 ways to boost results
Sales script: why and how you should build one
Cross-selling: what they are and how to implement them in your business
Sales books: the 20 most important for a successful career
The elaboration of the sales cycle
After defining the steps appropriately for your case, it will be necessary to elaborate what to say and do in each one.
We are talking about a construction that has objectives and goals established according to your business strategy, aligned with the customer’s purchase process.
That said, it must already be clear what you need to know first, right?
I’m talking about the buying process, the customer’s habits and desires, and the objectives and goals of your company.
Customer habits are vital here.
Imagine if he does research on a product using mechanisms like Google, but a company tries to establish first contact with him by making newspaper ads.
It obviously won’t work!
You need to investigate details like:
- when the customer buys;
- who influences him;
- how he searches;
- for whom he can ask for directions;
- when it is usually more available;
- what places you go to;
- what is important to him; etc.
When more information can be obtained, the easier it will be to develop a natural approach, which occurs over time and in accordance with the client’s wishes.
At this point you will need to set up your cycle, which includes not only details about what to do, but how, where and when.
Among these definitions, special attention needs to be paid to qualification, which needs to determine when the lead is ready to be approached for purchase, something that we pay a lot of attention to at Websites Are Us: lead segmentation.
Inbound and outbound applied to the sales cycle
The effects of the sales cycle are different depending on the business model you have adopted, especially regarding the choice between working with inbound or outbound.
If you are unfamiliar with these terms and do not want to go into the subject for now, I will leave you with a very brief definition.
We can define the inbound as a strategy that encourages the client to contact the company through content production, SEO and social media interactions. The sales team is internal and uses technology to optimize their processes.
The outbound uses a more traditional and invasive prospecting, getting in direct contact with the customer to offer the product, whether scheduling a sales meeting by phone, or visiting the customer directly.
It is commonly used in more complex sales, especially when the consumer is not in the habit of taking the initiative to purchase and it is difficult to stimulate it – the strategy tends to a longer cycle.
The sales cycle in Inbound can be reduced in cases where the lead understands your problem and knows how to solve it.
Therefore, in this strategy it is necessary to develop skill and technique in lead nutrition.
Good nutrition allows greater efficiency in stimulating the buyer’s journey towards the purchase action, making it easier for him to become aware of the solution, consider making the option and finally decide for it.
In outbound, the effectiveness of the sales cycle depends on other factors, such as a good strategy to “reach” the decision maker, that is; talk to the person who has the autonomy to close the deal.
Customer qualification usually takes place even before prospecting and the sales process is more expensive.
This implies the displacement and dedication of a qualified professional.
For this reason, it is important to know how to collect information that allows selecting the prospect and, at the same time, provides subsidies for the sales approach.
The period and effectiveness of the cycle will also be influenced by the ability to develop a personalized contact, directing the conversation and the sales proposal to specific needs.
If it is possible to identify and measure the customer’s problem, pointing to a concrete solution, the sales professional can demonstrate the urgency of the business and shorten the completion time.
As must have been evident, these strategies are defined according to the effectiveness of their results, which varies depending on the customer, the product and how much they can reduce the cycle time.
The aid tools
There are countless marketing tools that you can use that give you productivity and competitiveness gains.
They provide resources that allow you to obtain information from how your sales are progressing and why some of them are lost, to the automation of some processes.
A good CRM is essential to apply, monitor and manage your sales cycle.
It allows the storage of the entire history of commercial actions and the monitoring of each prospect in the stages of the cycle.
This generates different reports on the migration of leads from step to step and allows you to analyze metrics for each one.
Do you know how to identify how many leads need to be attracted to reach your sales goals at the end of the process?
Without that information it can be difficult to get results, do you agree?
Sales indicators are essential for aligning the goals of each stage of the sales cycle, ensuring results.
They will allow you to identify which steps are stalling, delaying or even definitely hindering your process.
Over time, you will certainly redefine your cycle details as you test out new strategies.
The monitoring of the sales cycle has allowed a great growth for Websites Are Us.
This is the result of constantly measuring, testing and improving the strategies and actions of our sales cycle, which keeps our doors open and inviting.
Speaking of which, the secrets of the Websites Are Us sales team are recorded in a great post by one of our managers.
Enjoy! It’s a must-read!