November 17, 2023

Sales Cycle: What are the Stages of the Sales Process?

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Key takeaways

  • Sales cycles are a “Deer X-ing” sign, not a “Railroad X-ing” sign
  • The more effective your “sifting” of leads at the front end, the higher the conversion rate, and the lower the cost of acquisition
  • Monitoring, analytics, and reporting are key to iterative improvements but may require some back-end work.
  • If a part of the process is bottlenecking your efforts or otherwise hamstringing the sales cycle, odds are, there’s a software tool that can help

As a rule, the majority of businesses are looking to grow their revenue. Establishing a consistent sales cycle is the first step in transitioning from “spray-and-pray” to dependable payday.

What is a sales cycle, and why are they important?

What “selling” looks like depends heavily on a number of factors: organization type and size, industry, location, target market, etc. This means the process—and how the process can be refined—will also vary across these factors. 

For consumer brands, this may involve digital shopping carts, retargeting efforts, and other less personal tools, and fewer direct touchpoints. On the other hand, B2B brands or large-ticket sales may involve a measure of lead management to limit wasted efforts and reduce overhead.

In a nutshell, though, a “sales cycle” is a model that describes how potential sales become actual sales. This model is used to conceptualize and quantify the very fluid and qualitative nature of the buyer journey, from prospect to purchase.

A sales cycle has seven steps: 

  • Prospecting
  • Outreach
  • Qualification
  • Relationship building
  • Pitching
  • Reassurance
  • Closing

We’ll go into each of these in depth below, but this is the core of the concept. Sales don’t magically happen. There are factors that drive, hinder, and influence the entire journey, which means it can be managed to improve outcomes.

That said, it’s critical to keep in mind one important detail: your sales cycle is like a deer crossing sign. It doesn’t determine where or how things happen. It can only describe what happens naturally. For that “sign” to work as intended, it has to be accurate. The less accurate it is, the less useful the sign will be.

For a quick buffer on sales pipeline terminology, click here to scroll down.

Step 1: Prospecting

Okay, with that annoyingly needful tangent taken care of, let’s jump into the nuts and bolts of the answer you came here for.

Most sales cycles start at the point of discovery for potential leads/customers/clients. In a very real sense, the furthest upstream you can start with a potential customer is the initial moment of brand awareness. Or, in some cases, even the moment they first learn of the kind of solution your brand offers. 

Whatever their initial level of awareness, most sales teams seek to steer that discovery process, to more effectively point leads in the right direction. These efforts, especially when they take the form of outbound efforts, are referred to as “prospecting.” 

EXPERT TIP:

Outbound and inbound are both effective approaches when employed properly. That said, inbound tends to be the domain of marketing departments, while sales often handles a majority of the outreach activities.

Now, there are countless individual tactics that can be used in outreach, from advertising to physical junk mail. But the key to improving the ROI of prospecting activities is applying those efforts with more accurate targeting. Sure, you can mail a catalog to every address in the country, but it’s not necessarily worth the investment. 

Instead, success is easier to find when you can find relevant conversations already happening online, and use those as a way to identify better candidates. Social media actually makes this remarkably easy (at least in comparison to decades past). But manually scouring the internet for the leads you want to chase is an approach that’s nearly impossible to scale. 

So, we recommend leveraging solutions like LinkedIn Sales Navigator to make the process easier.

Step 2: Outreach (and the automation thereof)

Like prospecting, better outreach results in higher conversion rates. And, like prospecting, outreach, nurturing, and follow-up efforts can be hard to scale when done manually. On the other hand, the more spammy, impersonal, and thoughtless, the less likely the outreach will positively influence lead performance.

In other words, it’s a bit of a tightrope walk. You can’t exactly type up and send every email, text, social message, etc. by hand. But people catch on pretty quick to having their buyer’s journey outsourced to bargain brand Skynet (and they’re not typically fond of it). 

Even the most aggressive, intrusive, and salesy outreach or advertisements can be received positively when it speaks directly to a buyer’s need. 

Start your automation with the parts of the process that are already the most transactional. Confirmation emails, appointment reminder texts, sales receipts, and the like. This alone will dramatically reduce the burden on sales, marketing, fulfillment, and pretty much everyone else who deals with leads or customers. 

From there, apply automation to anything you’re already seeing success when done in bulk (but are sinking too much time into by performing manually). Not every communication has to be bespoke, especially if you can craft messaging that’s compelling enough that your prospects feel seen despite automated distribution. 

EXPERT TIP:

We’re already leveraging technology to streamline communication every day, so a certain amount of it is expected. Just don’t try to trade real humanity for whatever you can get with a one-sentence generative AI prompt. 

As for how to implement automation (especially if you want to track its effectiveness so it can be optimized), we recommend using a tool like HubSpot Sales hub.

Step 3: Qualification station

With the right tools and processes in place, there will be minimal effort from sales staff until prospects begin self-selecting and interacting with your brand of their own free will. That may be signing up for a newsletter, or asking to schedule a demo, or any number of markers that can be used to flag them in the system for follow up.

Once they hit this point, though, it’s up to your team to start sifting and sorting based on use case fit. You can, of course, just dump the whole bucket down the rest of the funnel, but that’s a “work harder, not smarter” approach, and there’s a better way.

Put simply: higher quality leads = better results.

So, vet your leads. Take a look at your data and find the attributes that all of your most profitable sales and highest CLV accounts have in common. Then, use those attributes as qualifiers, and prioritize leads according to how well they fit the ICP. 

Remember, the “buyer’s journey” has value as a concept because of how it puts the focus on the customer’s experience. The better their purchase meets their needs and provides a positive return, the happier they will be. So, if you can pin down the predictors tied to your happiest customers, you focus your efforts on the leads who will end up like them.

Those that don’t qualify can still be left with a positive opinion of the brand, provided you point them to a solution that better meets their needs. And, in the case that the buyer might actually just be a “problem child” that no one wants to deal with? Then, you’re doing your team a double favor by letting a competitor try and meet their ridiculous demands. 

EXPERT TIP:

Bottom line, the more accurate your lead qualifiers, the better the lead quality. And the better the average lead quality, the higher the conversion rates and customer values. It’s greater profits for less effort, and all it takes is the willingness to tell some leads “no.”

The good news is, because most of the qualifying metrics are essentially yes/no questions (they clicked, signed up, agreed to, responded to, opened the link, etc.), they can be used to automate a lot of the sifting. Our programmer friends would call these “logic gates,” and the right software tools can help you set up these true/false tests to sort leads in real time.

A number of solutions facilitate this kind of automation-enhanced approach, though perhaps most famous among them is Salesforce, and it’s a solid place to start your search.

Step 4: Building and nurturing relationships

Ideally, leads only reach the point of talking to a real person after being thoroughly vetted by the previous stages. A non-trivial portion of society now avoids unnecessary human contact where they can (who calls when you can just text?), and this can work in your favor during steps 1–3. At some point, though, you’ll want to start making the most of your sales pros.

This is the stage in the process where you do that.

When the first three steps are working as intended, the leads that reach this point should be prime candidates, and you should see a lot less wasted effort. That said, no matter how effective the prospecting and qualifying systems, no pipeline is free of “cracks,” and there’s no replacement for the human touch.

EXPERT TIP:

Direct touchpoints can make a big difference for buyers who fit the target use case, but may still be on the fence (and need some additional nudging and objection handling). It can also make it easier to catch leads that might seem like a good fit, but who would more likely prove to be a bad sale. 

The problem here, however, is how this step is often the most difficult to quantify, measure, and manage. A lot can be optimized and improved if you have the right data and analytics, but without a way to track success rates, tactics used, touchpoints involved, and so forth, it can be hard to know if success or failure is due to skill or circumstance. 

Again, proper implementation of software tools will be your best friend, here. Solutions like Nimble CRM can, when used correctly, track many of these details and help identify the top performers from those who just got a lucky assignment. With the right optics, you can map out best practices, identify poor product performance, and even inform decisions about future offerings.

Step 5: Pitching

Your team has been hunting for leads, has done outreach, and started vetting and nurturing those leads. Once all of that has been done, it’s time to shoot your shot. Sure, you could go on coaxing and shmoozing leads indefinitely. At some point, though, you’ll need to cut to the chase and invite them to either make the deal or walk away. 

For most teams, if any part of the procedure has already been converted to a standardized, team-wide process, it’s this. And you may very well have done so with positive results. But there’s always something you can tweak or improve to increase success rates or reduce required effort. 

In this case, we recommend using tools that cut back on the time and investment needed to create engaging, visually appealing pitch decks. 

ClearSlide, for example, is a solid solution that can easily be used to create beautiful interactive sales presentations. And while “making it sparkle” won’t necessarily land you the deal, it’s better than a bland spreadsheet, and it certainly doesn’t hurt. 

Step 6: Reassurance

We mentioned above how some prospects, even ideal matches, may need more than just some compelling copy and a gentle “sign here, please” to commit. Unless your a consumer buying holiday gifts online, “buying” tends to involve more than just buttons for “add to cart” and “buy now.” 

  • Maybe they need to get buy-in from other stakeholders
  • Maybe they need to justify the spend in the budget
  • Maybe they need hard proof of potential ROI
  • Maybe they need assistance with implementation and onboarding, etc.

Whatever the case, leads that hit this stage should be worth the additional effort (one would hope, at least). So, take this opportunity to make a final evaluation as to whether they, in fact, are not worth the trouble in the long run. After all, problematic leads frequently turn out to be problematic clients, and the last thing your team needs is another demanding, grumpy customer.

EXPERT TIP:

For those leads that look promising but need extra encouragement, your most effective tools to get them across the finish line are all based in social proof—reviews, testimonials, case studies, and the like. They shouldn’t have to take your word in regard to expected ROI, and you shouldn’t ask them to. Instead, give them what they need to answer their own doubts. 

Trustpilot, and platforms like it, can be a goldmine for purposes like this. And don’t sweat it too much if you don’t have a perfect score. We all know that things that seem too good to be true usually are, so if a product or brand has a five-star rating from all 10,000 reviews, it looks a little suspicious. Let them see who liked what you offer, and who was dissatisfied with it.

Odds are, if they find someone who makes valid complaints that speak to their unique situation, and they turn down the offer as a result, then they would have been unhappy after the sale no matter what you did. That’s honestly the best possible outcome in those cases.

Step 7: Closing

With any luck, this reaches its conclusion with a “sign on the dotted line” discussion, a hand shake, and the start of a long, positive relationship with your brand. That being said, much of the future depends on the kind of foundation you lay as you kick things off.

All too often, sales teams promise new clients the moon, then pass them off to the fulfillment team, who only has enough rocket fuel to get them to Jersey. 

EXPERT TIP:

To put it bluntly, while you’re doing all the paperwork, haggling, coordinating, the kickoff calls, be absolutely sure to manage expectations effectively. Ensure everyone is on the same page, and no one is left holding the short end of the stick. Remember, few customer experiences are as damaging as a customer success team having to walk back the promises the client was sold on.

Now, as for all that “sign on the dotted line” stuff, there are tools for that, too. Pipedrive, for instance, can help with deal management and closing, making it easier to put all those agreements and expectations on paper (well, digital documentation, at the very least).

Sales Pipeline Terminology

If you know anything about business terminology, you know that no matter the industry, someone’s always trying to come up with a new name for a thing that already exists. At this point, finding consensus on a given piece of jargon is like scoring a high-rez photo of Bigfoot.

So before we go any further, let’s clear up some muddled bits of linguistic diversity.

The terms below try to define and give shape to different aspects of sales efforts, from lead/buyer behavior to internal processes and metrics, to tools for aiding in projections and business decisions. At their core, though, all of them are used to try and make success in sales easier to achieve.

  • Sales cycle: as mentioned above, the sales cycle is an outline of the path customers commonly take from initial brand awareness to committing to a purchase. The term is similar in usage to “buyer’s journey,” though there are few distinctions (more on that in a bit).
  • Sales process: this term refers to internal activities, policies, and best practices. The “process,” as the name would imply, is the established protocol that sales staff use to guide buyers through the cycle.
  • Sales pipeline: pipelines consist of a series of metrics, gates, and checkpoints that allow the cycle to be quantified and monitored. Without the pipeline, you might be aware of what a lead has to go through before the sale, but you don’t have an effective way to track where they currently are on that road. 
  • Sales methodology: your sales methodology defines your approach to sales efforts. It’s equal parts philosophy and best practice, and serves as a collection of guiding principles for the sales team. 
  • Sales model: the model helps translate the methodology into processes. Sales methodology might determine priorities and identify preferred approaches, (e.g. “higher retention before higher sales” or “tackle inbound leads first”), while the model defines how teams should actually make those things happen.
  • Sales funnel: the funnel is the high-level, numbers-focused perspective on the entire sales system. It helps anticipate conversion rates, quantify potential profits, and determine appropriate KPIs. When you’re making projections on how many leads will become buyers, and thus how many leads are needed to hit revenue targets, you’re using the funnel to do it. 
  • Buyer’s journey: Finally, the buyer’s journey is, in many ways, an alternative to the sales cycle (and possibly other terms in this list). Most of these terms are expressed from the seller’s perspective, while the buyer’s journey flips that around. The sales cycle says “how do we turn a lead into a sale?” while the buyer’s journey asks “what does the buyer need for the sale to be worth it to them?”

Odds are, you’ve heard, read, or even discussed one or more of these terms in your professional career. And odds are also good that you’ve been part of a team that defined these terms differently than what’s described here. The lines here are pretty fuzzy, and it’s not uncommon for terms to be switched around, used interchangeably, or employed as an umbrella that covers multiple areas of focus.

We’re not saying that our definitions are absolute. Quite the opposite, and that’s part of the problem. But in the age of SEO keywords and internet visibility, having a baseline is important when you’re trying to gather information on the topic. Otherwise, you end up digging through dozens of Wikipedia pages and blog articles, only to end up more confused than you started.

Making the right decisions for your business

Navigating the intricacies of the sales cycle is akin to conducting a symphony, where each movement must be executed with precision and harmony. From the initial prospecting to the final closing, understanding and optimizing each stage is crucial for a successful sales journey. Remember, the effectiveness of your sales cycle is not just about pushing a product or service; it’s about creating a seamless, engaging experience for the customer, one that resonates with their needs and expectations. 

By leveraging the right tools and strategies at each stage, businesses can transform their sales cycle from a mere process into a powerful engine driving growth and customer satisfaction. This journey, though complex, is a rewarding one, offering invaluable insights into customer behavior and opportunities for continuous improvement. As we’ve explored, the sales cycle is not just a pathway to revenue; it’s a roadmap to building lasting relationships and a resilient, thriving business.

Looking for the latest in CRM solutions? Check out our CRM Software Buyer’s Guide.

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