The sales cycle: what is it and what are the 7 main stages?

Say you’re closing deals at an excellent rate—you should meet your quota for the month. But what about next month? In sales, consistency is key. When you don’t have a framework for successful sales, you won’t be able to predict your sales for tomorrow, let alone next month or next quarter.

Without a strategy, you’re navigating with no map and no idea where to go next. If you’re doing well, you won’t know how to repeat that success, and if you’re doing poorly, you won’t know how to avoid failure next time around. The solution? Create a sales cycle.

What is a sales cycle?

A sales cycle is the repeatable and tactical process salespeople follow to turn a lead into a customer. With a sales cycle in place, you always know your next move and where each lead is within the cycle. It can also help you repeat your success or determine how to improve.

In a sales cycle, there seven steps you take to complete a sale with new customers—from first contact to signing the contract:

1. Find leads

2. Connect with leads

3. Qualify leads

4. Present to prospects

5. Overcome objections

6. Close the deal

7. Nurture new customers

Why is the sales cycle important?

Wondering why this is useful? Well, you can use your understanding of the sales cycle—and which stages you move through most quickly, which stages trip you up, etc.—to close deals faster. Seeing the sales process at a granular level, step by step, makes it easier to identify the individual actions that lead to problems or successes.

Let’s say you discover that your sales cycle is twice as long as your peers’ (that is, it’s taking you twice as long to make a sale). To find out why, you can look at each step you take to close a deal—from finding leads to overcoming objections. You may then review stage-by-stage conversion rates to see at which points leads are dropping off. If it looks like leads are dropping off after you give a sales presentation, for instance, then it’s time to polish your presentation skills or revise your message.

How long it takes you to complete the seven stages of the cycle depends on a number of factors, including your company, your product or service, and your industry. A B2B sales cycle is typically much different from a B2C sales cycle.

What are the 7 stages of a sales cycle?

The execution of the following sales cycle stages will depend on your product, service, company, or industry. But the order of the stages is typically the same, no matter the situation. Here’s how to successfully move from one step to the next, plus best practices and helpful resources.

1. Find leads

In this stage, you’re searching for people who may be interested in your product or service and adding them to your sales pipeline. Start by making sure you understand your company’s buyer persona. Why? You’ll improve your chances of finding quality leads if you know exactly the type of customer you’re looking for.

You can find ideal customers via phone or use these cold email templates to gauge interest. You may also try the lead-generation methods below:

• Solve potential customers’ problems on Quora

• Create videos with a built-in lead generation form

• Generate leads from support-ticket conversations

• Interact with potential customers on LinkedIn Groups

Don’t try to make a sale at this stage, especially if you’re in B2B sales. At this point, you’re just gathering leads and trying to determine whether these people match your buyer personas. Once you have strong leads, put their contact information into your CRM.

Additional resource: 5 customer-centric sales lead generators

2. Connect with leads

Now that you have your potential clients lined up, it’s time to do some research. Find out what their problems are and how you can help—just bear in mind that you shouldn’t hit them with a hard sales pitch yet. Instead, earn your lead’s trust by sending resources that help them or their business succeed.

You can educate your target customer by sending relevant, valuable information via your prospecting emails. For example, maybe you find out on LinkedIn that your target lead is hiring a sales team. You can send helpful resources on the topic.

By providing material that addresses a challenge the lead is facing, you show that you care about the lead’s success. You stand out from sales reps who ask for leads’ business right out of the gate. You’re giving the lead a reason to trust you and opening the door for future communication.

Additional resource: Your content and sales teams don’t communicate—and it’s holding you back

3. Qualify leads

Not every lead you contact is going to be right for your product or service. Turn your leads into prospects through qualification steps.

Leads are people who might be a good fit for your product or service but don’t have the interest or resources. Prospects are people who have both the interest and the resources to purchase your product or service.

Below is a lead-qualification checklist to help you determine whether or not a lead should move on to the next stage in your sales cycle. Based on your interactions with leads, answer yes or no to each of the following questions:

• Is the lead interested in your product or service?

• Does the lead recognize their need for your product or service?

• Can the lead afford your product or service?

• Is the lead the key decision-maker? Or can they put you in touch with the key decision-maker?

If you can’t answer yes to all the questions above, the lead isn’t a qualified candidate and shouldn’t be considered a prospect—but don’t delete the lead’s contact info. Just because they’re not a good fit for your product or service now, doesn’t mean that they won’t be in six months.

Instead, send their information to the marketing team so the department can enroll them in email marketing campaigns with updates about your product or service.

Additional resource: Try lead scoring to make more sales

4. Present to prospects

Your lead is now a prospect. It’s time to share how your product or service can help them. Your sales presentation could be a demo, an in-person meeting, or a 1:1 conversation. Whatever you choose, the basic formula of a sales presentation remains the same:

• Introduce yourself

• Present the problem

• Present the solution

• Back it up with data

• Summarize the info

• Answer questions

Throughout the presentation, focus on the benefits of your product or service, not the features. Your soon-to-be customer wants to know what’s in it for them.

Additional resource: 7 sales pitch examples proven to win customers

5. Overcome objections

While some prospects might be totally on board after your presentation, most will likely be skeptical. Use their objections as an opportunity to convince them that your product or service is worth their money, the time it will take to implement, the conversations they’ll need to have with their boss, etc. Remember that objections don’t necessarily mean a sale isn’t possible; you just have to know how to handle them.

Be prepared to answer common sales objections:

• “Your product/service costs too much.”

• “I’m under contract with “[Competitor].”

• “Our company needs X, Y, and Z features.”

Price is the most common sales objection. When met with this objection, communicate your value proposition. Point out the benefits of your product or service and how they relate to the prospect’s needs. Be clear on what the prospect is getting for the price.

Additional resources: How to overcome common sales objections

6. Close the deal

You’re ready to present the paperwork with the dotted line, but the line is still blank. Here are three possible ways to effectively close the deal and guarantee a signature:

• The Assumptive Close: Behave as though the prospect has already agreed to buy what you’re selling. This is the hardest of the three to pull off.
• The Suggestion Close: Provide purchasing suggestions based on what you’ve learned about your buyer’s needs.
• The Urgency Close: Pitch your product at a discounted, limited-time price.

If your potential customer signed a contract, congratulations! If you weren’t able to close the deal, don’t be discouraged—a lost deal might not be lost forever. Continue to nurture the prospect with email campaigns and resources. They might be ready to purchase later on.

You can also turn a lost deal into a learning opportunity. Ask what the main reason was for not signing, and use the feedback to review your sales stages and sharpen certain skills.

Additional resource: Use SPIN selling to close more deals

7. Nurture new customers

It’s important to invest time in your new customer even after the deal is closed. Not only will you strengthen customer loyalty, but you’ll also increase the chances of an upsell or referral. Here are a few ways to nurture the new relationship:

• Make sure you have a smooth onboarding process between account managers and new customers to ensure a seamless handoff.

• Speak with marketing to determine content that may be helpful to your new customers as they use the product or service, and send valuable resources such as how-to guides and demos.

• Check in with your customer every one to three months and ask how you can help.

If you’re continually investing in your customers and they’re happy, don’t be afraid to ask for a referral.

Additional resource: A guide to managing customer relationships

How to improve your sales cycle

To lessen the time it takes to close a deal, you need to manage your sales cycle. This means looking at every step, finding the stages that are taking longer to move leads or prospects through, and making adjustments accordingly.

If you manage your sales cycle properly, you’ll speed up the time it takes to complete each step, which shortens your cycle length. Here are a few tips for effective sales cycle management.

1. Track conversion rates between sales cycle stages

   Each stage should take as little time as possible. To find out which stages are taking the longest, measure the “conversion rate” between stages by dividing the number of opportunities in one stage by the number in the next stage. The result is a percentage.

   

   Let’s say that between the prospecting and qualifying stages, you’re achieving a 30-percent conversion rate. By itself, this means nothing, but compare it to your sales team’s average. Compare it to the conversion rate you reached last month, last year, and last week to find trends.

   When you see a low conversion rate between stages, find out why, and then experiment with sales conversion rate solutions.

2. Track your average sales cycle length

   As we already mentioned, the average sales cycle length depends on many factors—the company, the industry, what you’re selling, and the size of the sale. So, how do you know whether your cycle length is good or bad?

   First, compare your sales cycle length with that of your team. Determine whether your sales cycle is drastically longer than the team’s sales cycle, and make improvements as needed. You should also check the industry average:

   [Source]

   To calculate your own “average sales cycle length,” use the following formula: Total Number of Days to Close Deals / Number of Closed Deals.

3. Manage your sales cycle with a CRM

   When a sales team is small, a spreadsheet may be fine for inserting and tracking deal information. But if you’re handling a lot of leads and prospects, this sheet can quickly become difficult to organize or automate. Enter: a CRM.

   A CRM organizes all your leads, deals, and tasks in one central location. You can also track conversion rates and sales cycle length (among many other things) with a CRM. Using one will ease your workflow and grease the wheels at many points during the sales cycle:

4. • Prospecting for leads: You can use a CRM like Zendesk Sell to store social media information and conversations with potential leads; receive tickets through your support team, which will give you ideas of who to talk to and what they’re looking for; and segment prospects by profitability, region, industry, and more.
     Qualifying leads: With CRM integrations, you can monitor email conversations with leads to have quick access to information such as their budget, decision-making ability, and common objections. Those details will give you a clear idea of whether or not leads are qualified. When a lead is unqualified, use your CRM to note the reason why—this can help you refine your qualification process and find better, more qualified leads. Software like Zendesk Sell will also allow you to score leads based on several factors, including the source of the lead and the type of contact information you have.
     Closing deals: With sales forecasting, you can use preassigned estimated close dates and win likelihoods to make sure you’re hitting your targets. The stage duration report in Zendesk Sell shows you where all your deals are in the pipeline and helps manage bottlenecks. It also breaks down the average time an individual team member has a deal in a particular stage. When a deal falls through, record why in your CRM. That way, you’ll be able to track trends and follow up; you can always turn a failure into a successful deal later on.
     
     Assessing and iterating: The most important purpose of a sales cycle is to help you figure out what’s working and what’s not. A CRM can help. Track things like your win rate, the length of the average cycle, how fast your deals are moving through your pipeline, your conversion rate—all metrics that will indicate the health of your sales process.
     Experiment with your CRM’s or sales tool’s capabilities. Use it to view every sales cycle stage and find ways to improve each one.
     Additional resource: 13 important sales metrics

   Set up a robust training program

   Your sales cycle will only be as good as your methods of training salespeople. This can be as fine-tuned as identifying specific pain points in the cycle where reps struggle, but it can also be more general. For example, some salespeople can be resistant to adopting new sales tools (like a CRM) or changing their methods. Find ways to motivate your team to embrace new technology, and integrate ongoing trainings into your workstream.

   Thankfully there are a wealth of existing sales training resources that you can implement. This can not only improve your sales cycle; it can keep your company one step ahead of the competition.

5. Lean into the human element

   This is where a sales leader can really guide a team to navigate the sales cycle process with grace. Remember, your team’s goal isn’t to close deals for the sake of closing deals; that will backfire in the long run. Encourage your team to practice active listening and to bring their humanity to conversations with prospects. Your company is there to solve customers’ problems, to be an honest partner with clients. Building a reputation for honesty, respect, and value takes time to build and should be treated as a precious commodity. It doesn’t take much to destroy a good reputation, and mismanaging the sales cycle can undermine your best intentions.