Sales Cycle Explained: 7 Stages of a Sales Cycle

A sales cycle is a step-by-step process that a sales rep follows to make a sale. The individual steps of a sales cycle may differ from company to company. For example, some sales organizations employ tactics like door-to-door knocking for leads, while others generate leads through online research and targeted calls. However, most sales cycles begin with prospecting and end with closing the sale and getting referrals for future leads. Sales organizations generally aim for a short sales cycle where salespeople quickly and efficiently move through each step to close deals. B2B (business-to-business) sales cycles are often longer because they’re more research-intensive and require additional assurances before the other business will commit to the sale.

Establishing a detailed and defined sales cycle in your company is vital because it can:

• Help identify areas of improvement. When you break up your selling process into easy-to-measure steps, you’ll immediately be able to start gathering data and metrics. With the right customer relationship management tool (CRM), you can automate this function and collect data without additional work. For instance, you’ll be able to identify the point in which sales tend to fall through in your cycle. By highlighting which steps in your sales cycle consistently lead to a deal and which don’t, you can finetune methods and better allocate team members and resources to up conversion rates and increase sales.
• Forecast future sales. The detailed data from your sales process can help you better predict future sales. For example, you can use the data to identify the numbers of sales each rep can make in a month based on the average length of your sales cycle, and which sales will most likely succeed after they make it to a specific step in the buyer’s journey.
• Make training easier. A designated sales cycle will streamline training by offering a well-defined roadmap or template for every new sales rep to follow precisely. Adhering to a sales cycle lets new reps understand the selling process and pinpoint the steps in the workflow in which they need additional training.

While sales cycles will naturally vary from company to company, here are the most common stages of the sales cycle:

1. 1. Prospect. Sales prospecting, or lead generation, is how an organization searches for suspects (people in your target market) and prospects (likely potential customers). Businesses prospect in various ways, including offering product demonstrations and collecting contact info, making phone calls or emails (called “outbound sales”), and targeted content marketing. Creating a detailed ideal customer profile can help you find and identify potential leads.
2. 2. Qualify. After you have a lead, you have to qualify it. Qualifying a lead is when a sales rep does additional research to determine whether the potential client meets the basic qualifications for a product or service. For instance, if you’re a company selling software to other companies, you need to determine whether the prospective company has compatible technology for your product. When qualifying, Internet searches can be very informative, but if you can’t find the pertinent information online, making a few brief “discovery calls” to the prospect can help determine if they’re a good fit.
3. 3. Make contact and present. Once you have a qualified lead, it’s time to make your sales pitch, which can include a short presentation or a demonstration of the product or service. The goal of a sales pitch is to convince the prospect that your interests are in line with their own. The best sales pitches are personalized to a particular prospect, using the research gathered during prospecting and qualifying.
4. 4. Address objections. After your sales presentation, allow ample time to address your prospect’s objections. Figure out what’s preventing them from making the purchase. Is it pricing? Scalability? Compatibility? Address their concerns honestly and enthusiastically. Additionally, keep track of common objections or pain points across prospects so that you can incorporate those answers into your presentation for future customers.
5. 5. Nurture. Your prospect may purchase your good or service after the presentation, but some decision-makers may want to meet with their teams before moving forward. The “nurturing” step allows sales reps to follow up after presentations to continue easing a prospect further down the sales pipeline and into closing, answering any lingering or new questions from the prospect.
6. 6. Close the deal. The final step of the sales cycle is to close the deal—during which the prospect makes a purchase and becomes a customer. There will be instances where a sales rep doesn’t make it to this step, but closing the deal is the ideal outcome for a sales cycle.
7. 7. Request referrals. Many companies include another step after closing the sale: referral requests. For this step, sales reps ask their new customers to refer them to additional prospects. By using their customers to generate new leads, a sales team can jumpstart their prospecting and dive into sales cycles all over again. Learn more about building a sales team in our complete guide.

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