Definition – What is a Sales Cycle?


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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.

Important note

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Anyway ... sorry for the interruption! Let's resume the rest of the article.

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.

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Anyway ... we'll continue from where we left off above.

  • 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.


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.

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