Sales goals are essential to any company’s success. Without clearly defined goals, success or failure is impossible to measure. While it may be easy to determine a number you feel should be met, it will cause frustration when you don’t understand why the sales team isn’t reaching those goals. Approaching sales as a process rather than an end result will allow you to better understand where improvement is needed and how to better control the final outcomes – this is where the Sales Cycle comes in.
A sales cycle is a series of events that take place when a company sells a product or a service. This cycle must be completed in order, and if at any point, you lose a potential customer along the way, the cycle must start back at the beginning. Each company creates its own sales cycle depending on company policies or internal processes such as getting permission to reduce a price or providing credit checks for financing options. Many times, salespeople get bogged down in these internal processes or other duties that are outside of actually selling; this is why it’s important to take a close look at each element in your sales cycle to determine what can be reduced and streamlined. The shorter the cycle, the greater likelihood you have of actually completing the sale.
So what are the phases in your cycle? In order to determine this, you need to take a step back and look at all of the different steps that are necessary to make a sale. You should strive for no more than six to seven phases in your sales cycle. Let’s take a closer look into what those phases should be.
The first phase in the sales cycle should be Prospecting. Prospecting is critical to every company’s success because it is the process of generating leads for your sales team. Depending on your sales staff, this could be one of the more difficult phases for your team. If your staff is made up of “Hunters”, who are comfortable making cold calls and searching for new leads, then this phase will be easy for your organization and you will be rich with sales prospects. However, if your staff is made up of “Farmers,” who prefer to nurture current customers and already existing leads, then your pool of prospects will be shallow. Prospecting is done through a variety of methods such as phone calls, in-person calls, trade shows, referrals from existing customers, and promotional strategies. Look at all of these activities within your company to determine where your leads are coming from and why. Should you place ads in magazines or invest in online advertising? Are there current organizations for your trade where you can acquire contacts? Which methods of promotion will generate the most initial interest while consuming the least amount of time? Once you have evaluated your prospecting activities, look for techniques to increase efficiency.
Phase two in the sales cycle is Initiating Contact with the prospective customer. This can be done many different ways; therefore, salespeople should be flexible and willing to try new methods of reaching out to prospects. Traditional methods such as phones calls or face-to-face cold calls have proven effective, but non-traditional methods such as Linked-in, Facebook, or other methods of social media may be preferred by today’s prospects. Take a look into your prospect pool and find the best ways to reach your unique target audience.
Once contact is made, the Qualifying phase begins. A good salesperson will “always be qualifying», not only in the beginning of the cycle, but throughout the whole process. This means that salespeople should always dig for more information about the prospect in order to provide the best service and meet their needs effectively. The number one job of all salespeople is to ask the right questions. Far too often, salespeople feel compelled to give a prospective customer quick answers rather than probing to discover undisclosed information. While providing prospects with solutions is important, being able to understand their business, needs, desires, and goals will give both parties the most success long-term. Asking the right questions is crucial to the process and will often set the stage for the prospective customer’s overall satisfaction with your company’s products or services. If this phase in the cycle is done poorly, it is very difficult to recover and provide the prospect with a good experience; however, when done correctly, the result will be a shortened sales cycle and a very satisfied customer.
The next phase in the cycle is Present Solutions. This should address prospective customer’s needs and wants, and then give a solution to meet their goals. This should be a short phase in the cycle, so be careful that your internal processes do not slow progress. There may be other departments that need to be involved such as checking credit or determining financing so work with these departments and develop reasonable deadlines to keep the cycle moving. It is often difficult to supply oversight without limiting a salesperson’s creativity so it is beneficial to set guidelines in place such as discounting authorities, the ability to set financing terms, or make concessions. These guidelines will allow the salesperson to decide how to use it in offering solutions to prospective customers.
Following in the cycle is Managing Objections. Most objections can be foreseen in the qualifying stage. Is the prospect worried about the price? Are they looking into buying from a competitor? It is important to identify where concerns are coming from and be prepared to offer a resolution. It is rare to not to be forced to overcome objections somewhere in the process from the prospective customer or someone internally. Always remember that in sales “NO” does not mean no; it is simply an objection. Objections may occur for many reasons, but mainly, they occur when the salesperson has missed something in the qualifying phase of the cycle. That is why it is critical to “always be qualifying”. When this occurs, it is necessary to go back to the qualifying phase to discover where the objection is coming from and formulate a solution. If properly prepared, you will move quickly into the final phase in the cycle, which is the Closing phase.
The Closing Phase is where the final agreement takes place and the deal is completed. It is important to reinforce that it was the right deal – sometimes even internally with upper management. There may even be internal processes to keep the new customer happy with their decision, this may be to thank and reassure them that they have made the right choice in choosing your company. Here at Point-of-Rental, we write the new customer a handwritten note to show how valued and important they are to the company. Again, you need to evaluate this step and ask, “Am I helping the sales staff or are they being weighted down with paperwork that is preventing them from focusing on closing more prospects?”
At any point in the process, there could be internal procedures that slow the sales cycle or some other type of internal or external roadblocks. Internal roadblocks are very easy to identify and develop strategies to remove them; however, external roadblocks are harder to foresee and remove because you are waiting on third parties. If you are faced with this problem, it is best tackled by trying to align your sales organization’s goals with the goals of the third party. In most cases, the third-party vendor is also getting tied down in their own sales cycle; giving you the opportunity to help yourself and make your third-party partner stronger. If this is handled properly, you will not only shorten your own sales cycle, but also create a stronger bond between you and your partner.
By focusing on the sales cycle, you will have a better understanding on where prospective customers are in the process and how to help your salespeople become more successful. After all, their success is the company’s success.