Contents
- What is a sales cycle?
- Differences between sales cycle and sales funnel
- Main stages of the sales cycle
- Sales philosophy
- Preparation for negotiations
- Establishing contact with the client
- Identifying client needs and pain points
- Effective presentation
- Handling objections
- Negotiating terms and price
- Closing the deal
- Post-sales support
- Debt management
What is a sales cycle?
The sales cycle is a sequence of steps that a manager goes through, starting from the first contact with a potential client and ending with the closing of the deal. It is a kind of algorithm that must be followed for a successful completion of the process. The duration of the sales cycle can vary depending on the complexity of the offered product or service, industry specifics, the nature of the client, and other factors. In some cases, deals can be closed within a few hours or days, while others may require lengthy communication and take months.
Differences between sales cycle and sales funnel
The sales cycle and sales funnel are two distinct concepts and should not be confused. Let's consider the key differences:
- Sales cycle: describes the specific steps and stages that a manager goes through to close a deal with an individual client.
- Sales funnel: describes the overall path that potential clients take from first encountering the product to making a purchase.
- Focus: the sales cycle focuses on a specific deal, while the sales funnel analyzes the overall sales process and client conversion at various stages.
- Uniqueness: the sales cycle is unique to each deal, while the sales funnel represents a general model for different products or services.
- Analysis: the sales cycle helps focus on strategies for successfully closing a deal, while the sales funnel allows for the optimization of marketing efforts.
Main stages of the sales cycle
It is important to note that the sales cycle is not always linear. It may include feedback and repeated stages of communication. For example, if a potential client expresses doubts, the manager may return to the stage of handling objections. The main stages of the sales cycle include:
- Establishing contact with the client
- Identifying client needs and pain points
- Effective presentation
- Handling objections
- Negotiating terms and price
- Closing the deal
- Post-sales support
Sales philosophy
The sales philosophy encompasses the main principles and approaches that the seller follows during the sales process. These may include both individual and corporate values of the company. It is important for managers to have clear principles that will assist them in their interactions with clients. Without such a philosophy, each seller may act at their discretion, which could negatively impact the company's reputation.
Preparation for negotiations
The quality of managers' preparation for negotiations directly affects the outcome of the sales cycle. Typically, the preparation process includes:
- Gathering information about the client and their needs.
- Defining the goals and priorities of the negotiations.
- Choosing an interaction strategy.
- Planning arguments and communication.
At this stage, it is important to think through behaviors in various situations and prepare scripts for different scenarios.
Establishing contact with the client
The stage of establishing contact with the client is critically important for successful interaction. At this stage, it is necessary to:
- Create a positive first impression.
- Capture the interlocutor's attention.
- Show interest in collaboration.
- Demonstrate understanding and empathy.
- Exhibit expertise.
If the contact is successfully established, one can move on to the next stage.
Identifying client needs and pain points
At this stage, it is important to identify the client's needs, motives, and attitudes. Managers can use various techniques, such as active listening and asking questions to clarify needs.
Effective presentation
The presentation of the product or service should highlight its value and convince the client of the necessity of the purchase. It is important to emphasize the product's advantages, explain how it meets the client's needs, and demonstrate its benefits.
Handling objections
Handling objections is one of the most critical stages in the sales cycle. The seller must be prepared to hear and understand the client's objections, offer solutions, and demonstrate the advantages of the product.
Negotiating terms and price
The goal of this stage is to find a mutually beneficial solution. The seller must understand what is important to the client and be ready for compromises. Establishing clear boundaries and flexibility will help achieve the desired outcome.
Closing the deal
Closing the deal is the culmination of the entire sales process. The manager must clearly and confidently guide the client towards signing the agreement, explain the process, and address all questions.
Post-sales support
After closing the deal, it is important to continue interacting with the client. This will help strengthen long-term relationships and increase loyalty. Post-sales support tasks may include:
- Providing feedback.
- Technical support.
- Client training.
- Inviting to loyalty programs.
- Maintaining regular communication.
Debt management
Debt management becomes relevant for companies that make sales on credit. It is important to establish clear rules, monitor debts, and maintain open communication channels with clients.