3 years ago
January 6, 2015

What Is A Sales Cycle?

A sales cycle is a series of events that begins the first time a sales person engages with a prospect and extends until a sale is made.

Rhys Metler

what is a sales cycleAll organizations talk about the desire to shorten the sales cycle, but without an adequate definition of the sales cycle improvement is impossible. At its core, a sales cycle is a series of events that begins at initial contact, the first time a sales person emails, speaks to, or meets with a prospect and extends until a sale is made. In this view, a sales cycle may be longer than those not directly involved with the sales loop might anticipate. However, understanding the steps in this sales cycle can prepare the way for accelerated sales.

Measuring the Sales Cycle from Initial Contact

Measuring the sales cycle from first contact gives organizations an advantage in determining the effectiveness of the sales team. Other methods of understanding the sales cycle start later in the sales process, such as at the first presentation. Doing this disregards the time that sales reps spend finding and contacting prospects, which typically amounts to 40% or more of a sales rep’s time. It also presents disadvantages to calculating close ratios, visit to lead percentages, and other crucial metrics. Securing an appointment at first contact is a primary goal, and is the first commitment a prospect makes to the sales cycle (unless, of course, the prospect initiated contact with your organization). 

After Contact: The First Appointment

By obtaining an appointment commitment from the prospect, a sales rep psychologically engages the prospect and makes him or her an active participant in the sales cycle. The goal of the first appointment is to maintain commitment and keep the prospect an active participant in the sales cycle by securing additional commitments:

  • A second appointment for a presentation to a decision-maker or other influencer
  • A commitment that the product or service from the presenter is a viable solution
  • A commitment to purchase

The first two commitments are secondary commitments: While they do not lead to a sale directly, they are on the path towards a successful close. Such secondary commitments can be preferable to a purchase commitment, as they allow the sales rep to build the strength of a prospect’s commitment for a larger and potentially more satisfying deal for all. With this being the case, the appointment could be an ongoing event in the sales cycle, made up of several appointments rather than just one.

Closing the Sale

Though the close can come as early as the first appointment, in most industries this is a rarity. In most sales cycles, the close occurs after an average of five contacts. However, cycles with ten or more contacts across emails, phone calls, and presentations are far from rare, especially in industries with long lead times.

It should be noted that a sales cycle does not close if a prospect either declines a sale or prematurely drops out of the sales process. These scenarios actually leave the sales cycle open. While this sounds positive at first, it actually is not: The next contact could be months or years from the original cycle the prospect was following, lengthening the sales cycle indefinitely.

Generating Repeat Business and Referrals

Those who believe that a sales cycle ends at a sale may be channeling themselves out of further business. Repeat business and business generated through client referrals is fundamental to the success of sales reps and their employers. Past clients should be encouraged to remain active participants in the sales cycle through periodic contact, such as: 

  • Contacts on how the product/service purchased is performing
  • Low pressure follow-ups on how a client’s business needs are changing
  • Direct requests for business referrals

Understanding the sales cycle is the initial step to shortening the sales cycle and generating additional revenues. No matter where in an organization you are positioned, the sales cycle is a central part of your business. Look to how your sales cycle is constructed to determine how your sales could be accelerated.

Rhys Metler

Rhys is a tenacious, top performing Senior Sales Recruiter with 11+ years of focused experience in the Digital Media, Mobile, Software, Technology and B2B verticals. He has a successful track record of headhunting top performing sales candidates for some of the most exciting brands in North America. He is a Certified Recruitment Specialist (CRS) and has expert experience in prospecting new business, client retention/renewals and managing top performing sales and recruitment teams. Rhys enjoys spending quality time with his wife, son, and two daughters, BBQing on a hot summer day, tropical vacations and cottaging.