What is a Sales Cycle and Why is It Important?

Roberto Mejia
by Roberto Mejia on October 12, 2012 in Sales
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An understanding of the sales cycle is fundamental to marketing success.  Why? Well, anyone selling goods and services—whether online or in person—needs to go through a process by which a lead becomes a sale.  This process is the sales cycle, and it’s the way that businesses both attain and retain customers.

Let’s say you have a site that sells widgets.  You’ve optimized it for your ideal customer, and your ideal customer comes to visit.  This customer reads the material and decides to opt-in to your email newsletter, or download offer.  This visitor has just become a lead. 

As a lead, this customer is now just inside the sales funnel—that place where potential customers become actual, purchasing customers.  You need to capture him, nurture him, keep him and get him to refer others to you.  Paying attention to this customer at each stage of the sales cycle helps to ensure that he gets all the way through the funnel.

The process goes something like this:

1. Prospect for leads (find your ideal customer)
2. Contact and qualify (contact the lead by call, email, letter or in person to determine if they are likely to be interested)
3. Present the offer (sell your company—in person, through the site, in print)
4. Address objections (break down barriers to the sale, address pain points and challenges)
5. Ask for the sale (after the presentation and elimination of barriers, close the deal)
6. Follow up (offer a survey, service the account, ask for referrals)

How long does this cycle take?  There is no one right answer.  The fact is, for some companies the sales cycle takes days, for some, weeks, for others months or even years.  It all depends on the industry, how many people are involved, the complexity of the sale, market conditions, the efficiency of your process, etc.

The goal of every company is to shorten the cycle, to close the deal as quickly as possible in order to maximize profits.  The efficiency of your sales cycle is a testament to how well you convert leads into sales, which of course translates into a healthier bottom line.  So, here are some tips:

Pursue only qualified leads.
Chasing after people who aren’t interested in you is a huge waste of time and resources.  If the person or company doesn’t have the problem for which you are the solution, then it’s time to move on.

Remove barriers promptly.
People put up barriers to change.  They fear the unknown, which in this case is you and your solution.  If the customer has an identified need for your products and services, you must remove their resistance and put them at ease.  Do this early in the cycle and you will shorten the time it takes to make the sale.

Emphasize measurable value.
Customers must see the value in what you are offering and they want to be able to measure it.  How will your product or service improve their operations?  By what percentage can they expect to see an increase in efficiency/sales/profits?  If you can’t answer these questions, the cycle can drag out indefinitely.

The sales cycle is an endless loop of engagement, by which you identify interested potential customers and nurture them through the sales process.  Efficiently and effectively guide your prospects and existing customers through each sale and you will get more from your marketing efforts.

Stay positive throughout, listen, ask questions and address each and every lead’s concerns individually.  It’s the way to make your sales cycle the avenue to better profits and a healthier bottom line.

Roberto Mejia

Roberto Mejia

While specializing in web development and inbound marketing, Roberto Mejia prides himself in always learning and improving as much as possible.