A widespread problem sales reps run into is completing a sale and then realizing there is not another about to close in their pipeline. Typically, there is too much time consumed on one prospect without thinking about the next sale. To produce consistent prospects and sales in your pipeline, follow these seven well established steps in the sales cycle, also known as the seven stages of the sales cycle. These steps should align with the sales CRM pipeline your company utilizes so it is easier to follow throughout the sales flow.
Sales Cycle Stage 1: Prospecting/Lead Generation
Lead generation and prospecting can be the most daunting aspect of the sales cycle. This pre-sales portion of the process is also one of the more critical phases.
Leads come through numerous channels, each with its own set of needs and desires. First, let’s identify the main lead sources.
- Marketing campaigns
- Convention leads
- Industry specific data bases
- Existing Customers – cross sell/upsell opportunities
Wherever the lead is generated, you must know the Value Proposition of your solution/product and answer two questions:
- What is the main issue or the problem that your product aims to solve?
- How is your product different from other comparable products or solutions in the market?
Lastly, target the decision maker, end user and gatekeeper as you create a calling plan.
Sales Cycle Stage 2: Prospect Analysis
The second step in the seven steps in the sales cycle is Prospect Analysis. In preparation for contacting the prospect, you need to research the company. You need to know who they are, where they came from, and try to identify their goals.
Company Characteristics to Obtain
- Company history
- Business type
- Top customers
- Key competitors
- Industry insights
- Recent achievements and news
You can get this information from their company website, press releases, websites such as LinkedIn, and other similar platforms.
Three Deep in Contacts
Once prepared with this information, identify three potential contacts at the company.
- Decision maker – the contact that will approve the budget, sign the contract and align resources
- End user – product and process expert that will us the solution and be your advocate
- Gate keeper – someone who intercepts marketing and sales experts before they speak with a company owner or leader
For each identify different communication channels and methods to connect with them.
- Phone Call
- Social media such as:
Once armed with this information, it is time to make contact, schedule an appointment, and move to stage three, the needs analysis.
Sales Cycle Stage 3: Needs Analysis
Of the seven stages of the sales cycle, this stage is key in building a relationship and obtaining the information necessary to move forward in the sales process. Don’t be afraid to invest time in this stage of the sales cycle. It is necessary to gain the information needed to mold your value proposition, prepare to target customer gaps that your solution will resolve, and identify how your solution is superior to your competition.
Time to listen and ask open ended questions directed at understanding:
- Customer business processes
- Customer pain points
- Goals for the year
- Use BANT
- Budget – is there a budget for the year?
- Authority – who has the sign off authority?
- Need – is there a need for the product or solution?
- Time – can you frame the purchase in time?
The objective of this call is to obtain information and set an appointment with the the key contact to present a solution. Once you have gathered this information, prepare a presentation that is specific to this customer and their solution.
Sales Cycle Stage 4: Presentation
The next step in the seven stages of the sales cycle focuses on your presentation. It needs to be tailored to your customer and will focus on discussing their business, processes, pain points, and how your product or solution will solve their problem, benefit them, and make their life easier. Do not focus strictly on the features and functionality of the product, as all may not apply to the customer, and they will believe you did not listen.
The presentation should address the following:
- How does this solve their problem and address pain points?
- What is the estimated Return on Investment?
- Address any unique benefits of the product/solution.
Customize the presentation to the customer’s needs
- Utilize graphs and data
- If applicable, add a process flow identifying where and how your product/solution aligns
- Address any objections up front in the presentation
Along with ending the presenting identifying how your solution benefits the customer, ask clarifying questions, and ask for the business. This help move you through to sales stages five and six.
Sales Cycle Stage 5: Handling Objections
Objections are common but it does not make them less tense. You can prepare for push back by brainstorming a response to the most common objections a customer may have. Primarily, listen for understanding. Ask probing questions again to get to the root of the objection. Be prepared with responses to common objections such as the following:
The prospect may not need your product. How should you respond?
- Do not take this objection at face value. The prospect may not yet realize that they are experiencing a problem.
- Probe further. Ask questions about how they are currently solving a particular issue and clarify how your solution will solve the issue.
The prospect may find your product expensive. How should you respond?
- Emphasize the ROI of your product. Highlight the cost of doing nothing and if they still do not budge, look for workarounds. Monthly or quarterly subscriptions could be great options.
Is the prospect happy with your competitor’s product over yours? Example response?
Focus on the following key areas to assess your competition:
- Highlight your company product/solution advantage over your competitors.
- Ask your prospects if they are facing any common issues. This will make them think about the issues they face with the current product and open a healthier discussion.
Sales Cycle Stage 6: Closing the Deal
The best strategy, analysis, plan, and presentation will not close a deal. You have to ask for the business. There are proven closing strategies used by successful sales closers. The one you select will depend on the situation in which you find yourself.
The Assumptive Close
Talk about the sales deal as if you are sure it is going to close. Voicing positive expectations about the deal closing can help both you and your prospect feel more confident about moving forward. For example, after a demo, you might say:
“We are really looking forward to partnering with you. When should we get started with implementation?”
Even though an assumptive attitude can generate positive momentum toward closing a deal, it is important to do frequent temperature checks with your prospects to make sure they are feeling similarly confident.
The Summary Close
Summarizing various points, you have discussed with your prospect can give you a good opening to solidify the deal. For example, you might say:
“So, we will do a custom implementation of our solution with an upgrade that applies only to the sales team, and we’ll provide a full-company training to make sure everyone knows how to use our solution. When would be a suitable time to schedule those trainings?”
This approach makes the most sense when you provide a solution with variable components. If you offer a one-size-fits-all solution, there is not much to summarize. When prospects hear the list of benefits they will receive, it helps them to see the whole picture of the value you are bringing to the table and creates an opportunity for them to correct you if you got something wrong.
The Gauge Technique
This sales closing technique can give you a better idea of how close your prospect is to purchase and what barriers may still stand in the way. Give your prospect a scale from 1 to 10 with clear starting and end points, and let the prospect tell you exactly where they stand.
“On a scale of 1 to 10, with 1 being ‘we should end the call’ and 10 being ‘let’s get started right away,’ where would you say we are?”
If the prospect replies with a six or lower, you did not convey the value of your solution effectively enough. Alternatively, there could be a significant barrier that has not been discussed with your prospect. If they reply with a number greater than six but below 10, you have helped them see the value of your solution. Follow up with a second question.
“I’m surprised you chose a number that [high/low]. Why did you choose it?” “Why wasn’t it a 10?”
The prospect can then tell you the reasons they feel like your solution will or will not work. Both pieces of information are vital to you. Knowing why they think your solution will work helps you understand the specific value you bring. That information is essential when it comes time to work with a procurement team. Knowing why they think your solution will not work can help you identify and then resolve concerns about moving forward.
Sales Cycle Stage 7: Follow-up
In our final step in the seven stages in the sales cycle we need to follow up with our customer. Post sales implementation is typically managed by other operational groups. As a sale rep you will want to maintain a relationship with the customer.
Leverage Existing Customer Relationships
- For cross sell/up sell opportunities
- To obtain leads to other prospects
- For customer retention – staying in contact with existing customers is a competitive advantage and it is easier to retain a customer than to obtain a new customer
- To gain market Insight – existing customers can give insight to market conditions, trends, and competitors
It is important to remember that each sales process is unique. No two sales cycles are the same. Each sales cycle stage can and will vary from a few minutes to as long as a month’s depending on the complexity of the solution. In general, every sales cycle follows a form of the seven stages above. Learning and practicing the sales cycle and refining your skills in each stage of the process will help you increase sales and grow your pipeline. Sales representatives that follow the seven stages of the sales cycle consistently fill their pipelines and have a stream of prospects, presentations, and customers.