Sales Cycle Fundamentals
In this lesson, you’ll learn about the core elements of the Sales Cycle and how to effectively execute each of them.
No matter what you’re selling, every sale follows roughly the same pattern.
Often salespeople don’t think of certain stages as being different events – for example, qualifying often happens as part of the cold call, the sales presentation or both – but each of these stages is, in fact, necessary to advance the sales process.
In order to succeed in sales, you need to master each one of these stages. If you’re weak in one or more areas, you might survive as a salesperson but you won’t thrive. Most salespeople are weak in one or two areas, so you’ll need to identify those weak points and keep improving them in order to improve your sales results.
What is a Sales Cycle?
A sales cycle is the series of predictable phases required to sell a product or service. It is the sequence of phases that a typical customer goes through when deciding to buy something.
Sales cycles can vary greatly among organizations, products and services, and no one sale will be exactly the same.
However, identifying the key steps and stages has some benefits:
– improves sales efficiency
– helps salespeople to sell more
– speeds up the process of on-boarding new sales hires
Importance of a Sales Cycle
A well developed, well managed sales cycle is critical to the health of any business.
It gives you clear visibility of what deals you have at each stage of the process – and where the problems are.
1) Prospect for Leads
2) Set an Appointment
3) Qualify the Prospect
4) Make Your Presentation
5) Address the Prospect’s Objections
6) Close the Sale
7) Ask for Referrals
Prospecting refers to the process of finding new potential customers. Your company might take care of the first part of this process by giving you lead lists to work with, or you might be responsible for finding leads yourself.
Before you start prospecting:
Prospecting is the first step in the sales cycle, but that doesn’t mean that the first thing you should do is start calling random people. Having poor-quality leads can be worse than no leads at all, since you end up wasting a lot of time making cold calls to people who can’t buy from you even if they want to. Some pre-prospecting work on your part will help you come up with leads that are actually useful.
Whatever method you use to set appointments, you’ll usually want to set one up face-to-face rather than sell over the phone.
What is Qualifying?
Qualifying is the process that allows you to find out whether a lead is actually prospect. A prospect is someone who has the potential to become a customer. Leads, on the other hand, are just potential prospects.
The qualification stage usually takes place at the appointment itself, although you can also qualify briefly during your initial contact.
The idea is to confirm that your prospect is both able and potentially willing to buy your product (before you spend a lot of time trying to pitch to him).
Keep in mind that you’re not just selling your product – you are also selling yourself as someone who can be trusted. You represent your company, so appearance counts.
This is the most important stage of the sales cycle – even highly interested prospects will rarely close themselves.
Consequently, a comprehensive inbound marketing program is critical to generating high-funnel and low-funnel leads, nurturing those leads through the buying funnel, and building your email database.
This is possibly the only part of Sales cycle that is purely scientific in a way. You can create a steady stream of leads if you deploy best inbound marketing practices and keep measuring what you do.
Aaron Ross in his book Predictable Revenue mentions that a secret source to Predictable Revenue is Predictable Lead Generation.
Knowing your client, keeping it interactive and most importantly, appealing to both the rational and the irrational (emotional and subconscious) sides of a client are effective strategies.
Here’s a good example of a Sales Pitch from a fictional character we know all too well:
Some companies have an extremely well developed sales machine where leads pour in as inbound leads and all reps have to do is qualify them. Meaning, some leads make the cut to be sold to by reps and others are trashed.
Qualifying means asking why endlessly.
So let’s say your prospect needs a new accounting system. Why?It’ll help connect a lot of data. Why is that important? Because it was never done before and will greatly improve efficiency.
Most sales reps stop there and launch into the product/service description. Maybe if you ask why one more time, you’ll discover that it’s important because a new CFO wants to leave a mark on the company and get a big bonus.
And there, you’ve discovered your rational (need accounting system & why) and irrational (want my bonus and recognition).
Once you send your first email to a prospect, or someone answers your cold call, there’s always a chance that they will simply say “no thanks.” Knowing how to respond to rejection can be tough.
There are many articles and books teaching you how to close. As it have been explained in this course, one effective method that will keep the sale progressing and will ultimately help you perform best is the Challenger method, that was proposed by the CEB Group.
But aside from Challenger technique (which you should be using at all times) let’s look at some other concrete methods.
Hubspot identifies two traditional closing techniques and states that these usually employ some psychological tricks designed to give that final nudge.
This is where salespeople make an offer that includes a special benefit that prompts immediate purchase.
“This is the last one at this price.”
“We’ve got a 20% discount just for customers who sign up today.”
This technique works because it creates a sense of urgency and can help when a prospect wants to buy something, but is hesitating to make a decision.
Salespeople who use this closing technique reiterate the items the customer is hopefully purchasing (stressing the value and benefits) in an effort to get the prospect to sign.
“So we have the Centrifab washing machine with brushless motor, the 10-year comprehensive guarantee, and our free delivery and installation service. When would be a good time to deliver?”
By summarizing previously agreed-upon points into one impressive package, you’re helping prospects to visualize what they’re truly getting out of the deal.
This technique involves using questions that eliminate objections, challenge the prospect’s status quo, and attempt to showcase to him/her that his indecision (which is also a decision), would be a bad one.
Psychologically, it’s also a powerful way to nudge a client. As when people arrive at their own conclusions (methodically brought on by your questioning), they are more comfortable with the choice that they end up making and more confident to take action.
“In your opinion, does what I am offering solve your problem?” The question allows you to discover whether the prospect is sold on your product while keeping the door open for further selling. If the answer is ‘no’, it remains their opinion (not yet the truth), thereby allowing you to continue to sell. If the answer is ‘yes,’ then closing the deal is the next step.
Here’s another example:
“Is there any reason why we can’t proceed with the shipment?”
Very often, prospective clients end up in no-decision-land and it’s on you to create urgency. This is one of the most powerful ways to get stalled deals to close and push though a sale.
Attach a deadline to the deal to help give the client an incentive to commit. Whether it’s a discount or something free, make them feel like they have the upper hand.
This does not mean rush the customer; it simply means try to give them a little extra reason why your product or service is the right choice, and the right choice right now.
When it’s pre-closing time and you’re about to get the contract signed, be prepared for the possibility that the client mentions something related to a competitor.
Competing for business is tough. Knowing the areas where you’re better than your competition can lead to that quick close. Again, this is all about preparation. Do your research and make sure that you take note of something that you are doing that your competition is not. This is oftentimes the biggest selling point, so you don’t want to ignore it.
Link to the video: https://www.youtube.com/watch?v=4jxx_rLxkXI