Definition – What is a Sales Cycle?

Have you ever wondered how long you should wait before following up with a potential customer? Following up too soon might make you seem pushy or unprepared. However, if you wait too long then you might miss the opportunity for a sale altogether. Many people who are in sales have faced this dilemma at some point which is why the sales cycle exists.

80% of sales require 5 follow-up calls after the meeting. 44% of sales reps give up after 1 follow-up.Brian Williams

A sales cycle refers to the series of events that takes place from the moment a salesperson first engages with a prospect up until the moment when the sale is made. Most businesses want to shorten the sales cycle as much as possible but this can only be done once they fully understand each step of the process first.

The 7 Stages of a Sales Cycle

Having a well-managed sales cycle is important for the health of your business. It will give you a clear idea of where you are at each stage of the process and what challenges you will have to deal with along the way.

Regardless of the product you are selling, every sale will follow a basic format. Rarely will a sale occur that does not involve these seven steps. It is important to master each of these stages and learn which areas you are weak in.

  • Prospect

The first step is simply to find new prospects. This is a critical step because without prospects you will have no one to sell your product to. Sometimes your company will give you a list of leads to work with but often you will be responsible for finding them yourself.

A good way to begin prospecting is to determine who the ideal prospect for your business is. Figuring this out will make it easier for you to find ways to approach this person.

  • Initiate contact

The way you initiate contact will largely depend on the industry you are in. The first contact will usually happen when you call or email your prospect to set up an appointment. It is a good idea to start by offering support or useful information on the first contact.

  • Identify the customer’s needs

When you meet your prospect you will need to come prepared with the right questions and resources. That way you can discover what it is your prospect truly needs and whether or not they are a good fit for your company. This will help you figure out whether or not they are willing to try out your product before you spend a lot of time trying to pitch them.

  • Present an offer

Your offer should serve as a solution to meet your prospect’s needs. You should use the information you have already gathered when you are presenting an offer to your prospect.

It’s important to keep in mind that you are representing your company. So you aren’t just selling your product, you are selling yourself and you want to make a good impression.

  • Manage objections

Your ability to manage any objections, such as price, will largely determine whether or not you are able to close the sale. Remember that objections are actually a positive sign because it shows that your prospect is considering your offer.

  • Close the sale

Once you have made your offer and answered your prospect’s questions it is time to close the deal and ask for the sale. This is actually the most frequently skipped stage which is ironic considering it is the most important. Mastering this difficult stage takes both time and experience.

  • Ask for referrals

Set up a follow-up process so you can make sure your customers continue to be happy with your services. Not only will this lead to future sales but it will bring in referrals for new leads.

Why Do You Need a Sales Cycle?

A sales cycle gives you a template for what action you should be taking at each point in the sale. Every prospect should be approached differently because they are all in different stages of the sales cycle. When you understand where each prospect is in the sales cycle you can refine your message for that particular person.

Your sales cycle will also offer insight into how efficient your business’s sales operations are. The length of your sales process can be tracked and compared to the industry average. For instance, let’s say that your company’s sales cycle is shorter than the industry average. This could mean that your company’s sales department is performing more efficiently than most of your competitors.

This article in the Harvard Business Review shows that companies with a formal sales process generated 28 percent higher revenue growth. These companies had a clearly defined sales process, spent at least three hours a month managing their pipeline, and they trained their sales managers on how to manage their pipeline as well.

Using a CRM to Measure the Sales Cycle

Now you understand what the sales cycle is and what each stage involves. But you may be wondering how you are supposed to manage all of this and how to teach your employees to implement it. One solution to this problem is a Customer Relationship Management (CRM) system.

CRM is a software that allows you to manage your interactions with your prospects and customers. It also gives your employees a template to follow throughout the sales cycle and offers management a high level of oversight. You can monitor how your salespeople are performing, which stages are losing the most customers, and how different prospects are converting.

This article in Forbes shows that companies with a fully utilized CRM system boosted their sales by 29 percent.  Here are some other benefits to using a CRM system:

  • Evaluate your sales cycle

A CRM will guide you through each step of the sales cycle and track your progress. This will help you identify any trends in the sales cycle and spot potential problems before they occur.

  • Measure performance

You can track how each employee is performing and identify any areas where improvement is needed. For instance, if an employee frequently loses the sale during a certain stage, the CRM will show you this.

  • Predict your incoming revenue

Since your CRM will track where each sale is in the cycle, you have a better idea of your chances for success and future revenue.

Conclusion

Most business owners understand that a faster sales cycle is preferable because the longer a sale drags on the higher the likelihood that it will fall apart. By understanding the different stages of the sales cycle you will close more sales and manage your employees more effectively.

A CRM can be a helpful tool to help you identify what is and is not working in your sales cycle. There are many times when “trusting your gut” is a good idea but when it comes to managing your company’s future revenue it probably isn’t the best strategy.

Tallyfy offers a simple workflow and business process management tool to help you track your progress and problems. Our app will trigger workflows from your CRM for a smoother, more seamless process. You can gain insights on existing bottlenecks so you can continuously improve your processes.

Related Questions

What is the definition of a sales cycle?

The sales cycle is the customer journey from initial contact to a purchase. Obsessed with workflows at Tallyfy, I consider it a choreographed dance, not a funnel. Every interaction is an opportunity for trust to either deepen or erode. What’s fascinating about this is how different industries come up with their own choreography — some graceful and efficient, others unnecessarily Byzantine. This dance is where the magic gets simplified.

How long is a sales cycle?

Sales cycles can be such unpredictably wonderful creatures! I have experienced B2B software deals close in 10 days (rare unicorns ) and 14-monthlings. It depends on your product complexity, price point and the customer’s decision structure. The actual magic isn’t so much making it shorter, but making it predictable enough so your team can hit really accurate forecasts. Speed is no match for predictability, almost every time.

What are the 7 steps in the sales cycle process?

The classic 7 stage sales cycle is like a video game that drops into the next level: Prospecting (did they fit?), Initial Contact (broke the ice), Needs Assessment (pain points?), Presentation (you get the value), Handling Objections (questions?), Closing (its a deal), Follow-up (you work together). What’s fascinating is that automation boosts — yet doesn’t obliterate — human touch at every stage.

How do you calculate sales cycle?

Calculating your sales cycle is delightfully simple — just subtract the first contact date from your close date for each deal and average. The most exciting part (where my inner data nerd gets activated) is breaking it down by deal size, product type or lead source to find the insights that are lurking below the surface. Once I discovered a client’s “60-day average” was in fact two separate cycles — 20 days of reorders and 90 of new business. That observation was the game changer!

What is the difference between sales cycle and sales process?

The sales cycle follows the customer’s buying journey, while the sales process describes the internal playbook for your team. This distinction is not merely semantic — it is transformative. The best performing teams at Tallyfy that I’ve seen build their processes in alignment with the natural buying cycle of the customer, instead of enforcing customers into their preferred system. When these two elements click, selling becomes less about shoving, and more about navigating.

How do I shorten my sales cycle?

Want to speed up your sales cycle? Be passionate about qualification. I’ve seen companies spend months chasing down prospects who would never buy. Create self-service materials for frequently asked questions, automate follow-ups (while still keeping them personalized!), and — which would have saved me hours of work — be upfront about pricing early on. Sometimes the quickest route isn’t to do things faster but to cut steps out altogether. Less really can be more.

How to improve your sales cycle?

You can start this process by first mapping your sales cycle from end to end in a workflow software tool. Locate exactly where deals reliably hit the brakes—these bottlenecks are improvement goldmines. Our team found that prospects got bogged down in evaluation, because our demo process was unnecessarily complicated. We streamlined it and close rates soared 24%.” Improving retention is often more about removing friction than it is about adding activities or touchpoints;

Why Is the Sales Cycle Important?

The sales cycle is the foundation of business predictability. It’s not just an academic exercise — without it, you’re basically flying blind on revenue forecasts and resource planning. What energizes me the most about this idea at Tallyfy is observing how the cycle itself and visualizing it, effectively turns chaotic sales efforts into systematic, measurable processes. It changes the conversation from the out-of-focus “Why aren’t we closing more?” to the actionable “Which particular stage requires optimization?

How to Create Your Sales Cycle Process?

Creating your sales cycle process is about observing reality — not enforcing an ideal. Map what your best customers really did before purchasing. Talk to your sales stars about what works. Then create a lightweight process that emulates this natural flow. The mistake I often see? And, you create overly-harsh processes that sales teams close their blinds and ignore. Your process should be like a helpful assistant, not a micromanaging boss—showing the way without suffocation.

How to Measure Your Sales Cycle?

To measure your sales cycle effectively, track average length, stage conversion rates, and velocity (how quickly deals move through each phase). But averages can be misleading! I learned that our “standard” 45-day cycle was actually hiding two very different patterns: 20-day cycles for small deals and 85-day cycles for enterprise. Separating these revealed completely different optimization needs than the erroneous average implied.

What to do to shorten the Sales Cycle?

Be obsessive about removing friction to shorten your sales cycle Build a knowledge base for frequently asked questions. Push deals along while your team sleeps using workflow automation software. Anticipate objections before they come up. And here’s an unorthodox one: in some cases, slowing down early stages with better qualification actually speeds up overall cycles, as organizational time wasters who never had buying intentions get filtered out.

What does Tallyfy believe about sales cycles?

We at Tallyfy, perceive sales cycles to be workflow problems in disguise. The traditional CRMs may track what happened, but they fail to orchestrate what should happen next. The key to predictable sales success are well-designed workflows — not heroic individual efforts. We know how much you care about investing your time in what matters, so we’re all about getting rid of those endless “What’s the status?” questions that haunt sales managers by trading manual check-ins for automated, real-time insight into every deal’s progress.

How does the sales cycle relate to the real-world?

There’s no better way to cure the misconceptions around sales cycles than to hear it from those who’ve revolutionized theirs:

All that said, we were all very surprised at how quickly our clients became comfortable using Tallyfy. – Michelle Murray, MD / CPA at Segue Partners

“This is the secret sauce of growing a business. I don’t need to waste too much time training freelancers. There’s a ton of applications for it in sales and stuff like that, but I’m really excited about the fact that I can hand-off inane workflows where I don’t want to drill down on how to explain this to someone else over and over. – Kyle Lawrence, Design & Develop Development Manager

This real-world experience demonstrates that effective workflow management translates into sales effectiveness. More customer stories at https://tallyfy.com/customers/ 

How can a sales manual software help optimize the sales cycle?

Sales manual software that is well-designed doesn’t document your process: It triggers it. Static sales playbooks sit gathering digital dust, while interactive playbooks that guide reps through each stage get used. But the real magic happens when your documented best practices no longer feel like artifacts or notepads, but become your team’s effective next steps. When your manual is woven into the workflow rather than being a separate function, cycle times reduce and consistency goes way up.

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About the author - Amit Kothari

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