Every organization wants to close as many deals as possible and supercharge its revenue within the shortest possible time frame.
One easy way to do this is to create a sales cycle. A sales cycle streamlines your sales activities and highlights which part of your sales process needs improvement. This shows you which activities you should focus on to grow your revenue.
Read through this guide to learn what a sales cycle is, the stages it’s made up of, and effective ways to manage it.
What is a sales cycle?
A sales cycle is a series of steps a salesperson must follow to convert a prospect into a customer. Both B2B and B2C companies have sales cycles, which allow them to eliminate bottlenecks in the sales process and better understand their customers’ needs.
B2B sales cycles are typically longer than B2C sales cycles because they involve multiple stakeholders and decision-makers. However, each type can be adjusted and optimized based on the metrics you track and the results you see.
But before you can begin to improve your sales process, you first have to understand the different stages involved.
Stages in a B2B sales cycle
Every company’s sales cycle varies according to the industry, market share, and the product or service you’re offering. Setting aside the different factors that can impact your process, here are the most common sales cycle stages.
Prospecting is the process of identifying potential customers. It’s almost always the first step in the sales process. It involves creating an ideal customer profile (ICP) so sales and marketing teams can build a list of prospects sales reps should reach out to in the next stage.
- Work closely with your marketing team to develop brand awareness campaigns that introduce cold prospects to your product.
- Track job changes of your previous customers, decision-makers, and champions using UserGems' pipeline generation playbooks to find product advocates at a new company. With prospects who already know your solution, the sales cycle is often shorter.
2. Making contact
Once you’ve created a prospect list, establish contact with them in a way that builds a relationship. Don’t scare them with a sales pitch right off the bat. Instead, ease your way into a conversation about their needs and pain points. That way, even if the prospect isn’t ready for the sale, they’ll remember your product when they need it.
- Take a look at their LinkedIn profile, posts, and company page to understand what problems they’re likely facing and craft a personalized introductory message.
- Engage with prospects on channels they frequent or use a mix of cold calls and emails to reach out to them.
3. Qualifying leads
While building relationships is a great way to warm up leads, you don’t want to end up selling to prospects who don’t have a clear buying need. That’s why, in this step, you’ve got to start narrowing down your prospect list to exclude the ones that aren’t ready to purchase.
- Study the deals you closed successfully in the past and look at attributes like demographics, professional traits, engagement, and social media. This will give you an idea of the attributes you should look for in future prospects.
- Create a simple checklist to score your leads. According to Steve Kearns, Senior Content Manager at LinkedIn, here are some questions you can ask:
- “Does this individual influence the buying committee?
- Does their company have a demonstrable need for our product or service?
- Has the individual shown signals of purchase intent?
- Is there a clear opportunity for me to reach out and deliver value?
- Is there a mutual connection who can introduce me?
- Have they engaged with our brand’s content before?”
The nurturing stage is also called the engagement stage, as you'll continue engaging with your prospects to help them on their buying journey by offering relevant information.
- Empathize with your prospect’s problem and focus on assisting them instead of treating them like another contact on your list. For instance, send a relevant ebook to them in response to a problem they posted about on social media.
- Check in with your prospects periodically to see if they have any questions about your product and offer to help with whatever you can to stay top of mind.
5. Presenting an offer
In this stage, set up a meeting with a prospect to walk them through everything they should know about your product. Make a case for how your product or service will solve their problem or address their pain point.
- Offer customer testimonials and case studies from similar clients to win your prospects’ trust.
- Connect with all the members of the buying committee to win buy-in from everyone by multi-threading deals.
In this final stage, the prospect has agreed to move forward with your product. At this point, you’ll send a proposal that reiterates the value of your product, outlines pricing details, and includes any relevant numbers or statistics from similar customers. After that, the next step is to seal the deal.
- Create a sense of urgency by offering discounts or limited-time bargains.
- Sit down with your prospects to create a Mutual Action Plan (MAP) to give a clear picture of the results they can expect within a specific time period.
Simply mapping out the stages of a sales cycle won’t be enough, though. To maximize your results, you need to ensure you’re following sales cycle best practices and effectively managing your process.
Sales cycle management best practices
Regardless of whether your sales teams are hitting their goals or not, it’s important to take a closer look at your sales cycle and incorporate best practices so you can:
- Optimize the sales cycle
- Shorten your sales cycle
- Get predictable results from your sales process
1. Automate your sales processes
Your sales teams perform many activities throughout the sales cycle. Unfortunately, most of them are repetitive and time-consuming tasks that don't help sales reps to engage with or sell to customers.
John Ross, CEO of Test Prep Insight, says, “Almost two-thirds of a sales rep’s time is eaten up by emails, training, and other procedural fluff that doesn’t even help them accomplish their primary job responsibility: selling."
“To me, this is crazy, and that’s why I spend an inordinate amount of time continuously vetting our sales team’s responsibilities and time management to ensure I’m removing as much deadweight from my sales team’s daily work as possible.”
In other words, the best way to improve the efficiency of your sales process is to automate as many tasks as possible. This not only frees up the headspace of your sales team but also improves efficiency and ensures that conversations with prospects don’t slip through the cracks.
Here are some of the tools you can use to automate your sales process:
- Pipeline generation tool - UserGems: Know when your champions move jobs and capture the entire buying groups in those companies to generate (and protect) revenue.
- Lead generation tool - ConnectAndSell: Increase the volume of calls reps can make per day and get higher conversion rates by engaging with highly-qualified prospects.
- Contact enrichment tool - UserGems Meeting Assistant: Add new contacts to your Salesforce automatically and get daily email updates about who you’re going to meet.
- Sales management tool - Outreach: Simplify interaction with prospects by creating email flows and tracking email open and response rates.
- Meeting management tool - Calendly: Add your agenda to Calendly and ask prospects to choose a date and time that fits their schedule instead of going back and forth to pick a meeting time.
2. Align your sales and marketing teams
With so much information available at a prospect's fingertips, the B2B buying process has undergone significant changes. Customers used to rely on sales reps for details about a product or service, but now they prefer to do their own research before engaging with a salesperson.
That means your sales team has to focus on educating prospects and assisting them with their research before converting them into paying customers. The best way to do this is to get your sales and marketing teams to work together.
However, this is easier said than done, as the content marketing teams put out is typically made to cater to a large audience. As a result, the leads they generate from it aren’t yet qualified. Because of this, sales reps end up ignoring more than half of marketing-generated leads.
Instead of going this route, get your sales and marketing teams on the same page by:
- Aligning on your target audience: Start looking through your customer database for users, champions, and decision-makers to find common denominators (company size, industry, roles, etc.) You can also reverse engineer this information by combing through industry analyst reports or competitor press releases.
- Creating a customer journey map: To create an effective journey map, start with the end goal in mind. In this case, your goal would be to create a unified customer experience and break down silos within your organization. Then, map out the customer journey and account for the pain points, rationale, and emotion behind each B2B purchase to create an accurate portrayal of their experience. Lastly, identify which part of the customer journey you can improve and set KPIs so everyone can identify which changes to prioritize.
- Putting in a joint effort: The buying journey is no longer linear, so both marketing and sales teams need to be involved in all parts of the buyer journey to execute and close deals. For instance, sales teams can be more proactive in the awareness stage by sharing content that the marketing team creates to build expertise and authenticity. And marketing teams can improve their efforts in the close stage by creating targeted content that resonates with specific teams to close the deal quickly.
3. Follow up with sales leads
While initiating contact with a lead is a victory in itself, you want to keep the momentum going by following up with them in ways that develop trust and move your deal forward.
“Unfortunately, this [follow-up] may be a somewhat drawn-out process — 80% of sales require five follow-ups before a deal is made. But interestingly enough, 43% of sales representatives abandon the prospect after just one follow-up,” says Sanket Shah, CEO of InVideo.
This happens because most sales reps don’t know how to follow up with prospects without coming off as careless or rushed, leading to setbacks or delays in the sales cycle.
To avoid this minefield, we’ve outlined a few tactics that work well in this social selling era:
- Show genuine interest: Did your prospect just put out a new LinkedIn article? Tell them what you thought about it, why you found it great, and add your two cents. If it makes sense, repost the article to your own network. This will make it easier to initiate conversations and follow up with your prospect.
- Reach out with value: Your prospect’s inbox is filled with emails and messages from salespeople trying to sell to them. So, it’s counterproductive to badger your prospects with “status update” requests. Instead, go through their LinkedIn profile and company page to check out if they’re soliciting advice or looking for information on a certain issue or topic. Then, use this information to guide your outreach.
- Reinforce value: If you’re following up with your prospect on a call, reinforce the value you brought to the table and define the next steps to keep the ball rolling. For instance, tell your prospects you’ll reach out with relevant and useful content like case studies to help them better understand your product's value.
These sales cycle tips should give you a concrete idea of how you can create a predictable path to revenue. But if you want to fine-tune it further, you’ll have to track a few key metrics.
Sales cycle metrics to track
It can be tricky knowing what to measure and when in sales so you can pinpoint exactly which part of the sales cycle needs improvement.
Here are a few sales cycle metrics that have worked for us:
- Average deal size (ADS): A measure of the average revenue obtained from each deal. It’s calculated by dividing the total revenue achieved in a set period by the number of deals closed. The ADS is a crucial metric as it uncovers trends in the sales cycle, pinpoints opportunities with high conversion potential, and creates an accurate sales forecast.
- Sales cycle length: The number of days or months it takes on average to close a deal. This is a useful metric as it tracks the overall performance of your sales strategy and allows you to modify it as needed. For instance, you can track the average sales cycle length for a deal and incentivize your prospects with valuable content or discounts to close the deal faster if it exceeds your average sales cycle length.
- Lead-to-opportunity ratio: The percentage of leads that are converted into opportunities. This metric is a great way to measure the efficiency of your lead generation process since it can be used to figure out which sources give you the most qualified leads. For instance, if you’re getting plenty of leads, but few are converted into opportunities, check your lead generation process to ensure that your prospecting efforts are aligned with your customer persona.
- Opportunity-to-win ratio: The number of qualified leads that became customers. The industry benchmark for this metric is about 6%, according to Geckoboard, and it’s extremely useful in evaluating the performance of your sales team. For instance, if your sales team’s opportunity-to-win ratio is below average, you can review the processes and resources used to close a deal and create new material if necessary.
- Lead response time: The period between the customer’s query and your sales rep’s response. Ideally, this number should be as low as possible, as longer response times lead to lower conversion rates. Research also shows that the ideal lead response time is 5 minutes or less, and 78% of customers buy from the first responder. To calculate the lead response time, use your CRM tool to view and track the lead’s engagement with your reps and generate reports that show their average response time.
Optimizing your B2B sales cycle
Understanding and optimizing your sales cycle makes your sales teams more productive and increases revenue. The more you stay on top of it, the better your chances of hitting a high ROI and keeping a full pipeline.
UserGems’ can improve your sales cycle by tracking champion job changes and filling your pipeline with prospects who move through the sales cycle faster than your average prospects.
Ready to shorten your sales cycle and reduce pipeline anxiety? Sign up for a UserGems demo below.