The Sales Cycle

Todd A. Smith © 2022

To effectively grow a business, it is essential to reach prospects and increase sales continually. To accomplish this, it is important to understand the sales cycle. Understanding the sales cycle is an excellent indicator of where to focus and increase efforts to achieve the sales and revenue goals necessary for a successful business.

Some form of sales drives all revenue. In today’s business environment, sales are obtained in two distinct categories: one category being person-to-person interaction, and the second is by a search and “click” via the internet. A working knowledge of how each form of sales fits into your business will significantly assist in creating more sales and meeting the goals a business needs or wants.

The sales cycle is comprised of seven distinct steps.

•           AWARENESS: People and companies need to know what you do and that you exist. Awareness includes advertising and marketing, and your branding within both the advertising and marketing. The marketing and advertising need to be placed in the locations where your prospects and clients congregate to be exposed to your business.

•           INTRODUCTION: This is the phase that begins the personal interaction between a prospect and a business. Personal interaction traditionally means a phone call or a “personal handshake”. This form of personal introduction still exists; it now includes zoom meetings,  visits to your website, and a chat on your website. Introduction is the first interaction between a prospect and a business.

•           THE PROBLEM: Products are designed, businesses are founded, and services are provided to solve a problem or resolve a challenge a prospect or client has. During this step in the sales cycle is the moment a potential client shares with a company the problem or challenge they need to have resolved.

•           SOLUTION: The solution part of the sales cycle allows the company or vendor to discuss their product or service and how their company can resolve the prospect’s challenge. This takes on many different forms based on your product or service. It could be a personal meeting to review a proposal or contract or, with a product or service purchased on the internet, this includes the details provided on the product or service.

•           THE CONTRACT: The signing of the agreement to purchase the product or service. The shortest step in the sales cycle.

•           FULFILLMENT: Successfully providing the product or service a business has been contracted to provide.

•           FOLLOW-UP AND FOLLOW-THROUGH: This includes discussing with the client their satisfaction with your product or service. This is a frequently forgotten aspect of the sales cycle. The follow-up and follow-through phase is the point in the sales cycle where referrals are asked for or freely provided by a satisfied customer.

Understanding each step of the sales cycle can greatly benefit sustaining and increasing sales.

For example:

If a company is not obtaining enough opportunities to add to one’s pipeline, this could indicate the Awareness step has a challenge. The challenge could be marketing in the wrong location, ineffective, or insufficient marketing.

In the event a company is obtaining plenty of opportunities and not achieving the sales they anticipated, possibly the price point is incorrect, or in the case of in-person sales, a salesperson is ineffective.

When a company is not achieving enough referrals, the fulfillment phase may not be wowing a customer at a level where a customer is comfortable referring their friends or family. Or the Follow-up and Follow-through step is insufficient in interacting with the customer to obtain the referrals.