What is a Sales Cycle: Definition, stages, and steps

Every business has one goal in mind: to sell things. Whether you’re selling big things like cars, small things like jewelry or intangible things like your expertise, you must work through a sales cycle.

The phrase “sales cycle” refers to each stage of the sales process, from the initial customer contact to transaction completion and follow-ups. It’s the process a potential customer goes through from realizing they need a product to actually making a purchase.

Sales cycles vary depending on your industry, the cost of your products or services, and your average customer. However, it essentially boils down to this: The cycle begins when your business first contacts a customer and ends when the customer buys something from your business.

If you execute your sales process correctly, you remove doubt from customers’ minds and persuade them to buy your products and services. If you misfire during any stage in the sales cycle, you can send customers running into the arms of your competitors.

Stage 1: Build a relationship with new customers (Find Leads)

Take time to introduce yourself, the business and your products and services to customers. Offer them plenty of opportunities to ask questions and grow comfortable with your business. Don’t rush them. This is key to earning their trust. During early discussions, you must prove yourself to the customer. This means being honest and doing what you say you will.

If you have a retail store, it is easier to connect with customers because you can communicate face-to-face, and they will have hands-on experiences with your products and services. Because of that, you will usually experience a shorter sales cycle. The same goes for repeat business; customers who were satisfied in the past will be quick to purchase from you again.

On the contrary, if you rely on, for example, cold calling to drum up a new business, you will need to devote much more time to this stage because customers need time to get to know you. This will lengthen your sales cycle—maybe even considerably—but should never be rushed through. Fostering these relationships early is necessary for closing deals.

Stage 2: Discover customers’ needs (Connect)

If a customer is browsing your store, simply asking “What can I help you find today?” can be all it takes to discover what the person is looking for. However, if you don’t have a brick-and-mortar store, and you sell your products online or you sell intangible items like, for example, IT services, you will need to work much harder to learn what customers need.

After you’ve spent a good amount of time building customers’ trust in your brand and have garnered enough interest to at least gain a meeting or bring them to your website, you need to interact with the customer to find solutions that work for them. You can’t begin this interaction with the expectation that you will sell them a one-size-fits-all product or service, and you should never try to sell customers something they don’t need. They will quickly lose trust in you and go searching for a business that will offer them a more personal, customized touch.

Ask customers plenty of questions, and actively listen for the answers. As you do that, you will discover their pain points so that you can later explain to them how your products or services can solve their problems. Strive to figure out how to make their professional or personal lives better, and if you can’t, consider how you can improve your product or service rather than trying to sell the wrong solution.

Experts go back and forth on whether you should ask customers about their budget during this stage or if you should wait till later. It really is up to you. If you run a small business with few sales reps or account managers, it’s probably out of the question to have them spend days, weeks, months or even years working with a client who can’t afford your services. Sometimes, it’s better to know any limitations early on before your reps spend too much time on an account. However, if you have the manpower and resources, building and maintaining relationships is a good idea, because if and when those customers can afford your services, you will have an easier time selling to them.

Stage 3: Pitch the product or service (Present)

You’ve built some trust, opened communication and discovered how you can help customers. Now it is time to pitch your product or service. Detail specifically how your products or services can solve their problems or help them overcome their specific challenges. Don’t focus on features or benefits that won’t be beneficial or relevant to this particular customer.

Demonstrations are extremely helpful because they allow your customers to get hands-on experience with your products or services. For example, if you sell appliances, you can show them all the nifty features on a machine. If you sell lotions in a store, put out sample bottles for shoppers to try. Or if you sell software, offer them a free trial for a week. The fanciest PowerPoint presentations in the world won’t offer customers the same insight as allowing them to use a product or service hands-on.

Stage 4: Open negotiations and manage objections

Customers may not agree with the terms of your contract or your pricing structure. Others will have concerns about whether your products can truly solve their problems. During Stage 4, let them voice their concerns, and be prepared to offer a rebuttal that will ease those concerns. For example, if cost is an issue, show them how much they will actually save over time.

If you sell online, make sure to have an extensive FAQ section, as well as an active customer service phone line or chat system where customers can find answers to their questions and concerns.

Concede when you can. In some cases, you won’t be able to adjust a price or offer extra incentives, and you will have to let a customer walk if you can’t meet their requests. However, in other cases, you will be able to save a sale by dropping the price, rewriting or modifying contracts, offering free shipping or throwing in a few extras.

If you can’t lower your prices without killing your profit or setting an unreasonable precedent, consider offering a payment plan or financing options to make it easier for customers to cover the cost.

Stage 5: Close the deal

After it’s all said and done, you won’t get their business if you don’t come out and ask for it. If you completed all four stages effectively, you’ll have a much easier time closing the sale because customers will feel confident in you and the purchase they are about to make. It can be as easy as saying something like “Do we have a deal?” or “Just sign the contract right here, and we can get started.”

Remember, just because you executed the sales cycle properly doesn’t mean that every customer will say “yes.” In fact, a lot of them will say “no.” As you learn how to refine your approach, you may find your results improve over time. But the reality is that your product or service will never be the right fit for every single potential customer. The best you can do is to build trust with customers who actually need your product and show them how your solution can help them.

Stage 6: Nurture new customers (Follow up)

Even after the sale is finalized, it’s crucial to continue spending time with your new client. You’ll not only boost the likelihood of an upsell or referral, but you’ll also strengthen consumer loyalty. Here are some suggestions for fostering the new relationship:

  • To guarantee a seamless handoff, make sure your account managers have a smooth onboarding procedure for new clients.
  • As your new customers utilize the product or service, discuss content that could be helpful to them with marketing, and send out useful materials like how-to instructions and demos.
  • Every one to three months, follow up with your client and find out how you can help.

Ask for a referral if your clients are satisfied and you are consistently investing in them.


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