What Is a Sales Cycle and How Do You Optimize It for Consistent Sales?

A sales cycle goes from leads to prospects to customers, and along the way, we earn the right to keep talking, listening, and selling. We have to take it one step at a time and do those steps in the right order. It’s why we don’t dive into our product details before we’ve found out the problem they’re trying to solve. And it’s why we don’t send out a contract until we’re sure the right decision-makers are bought in. 

Here’s how to master the steps of the sales cycle, with tips and tricks to help you advance every deal to close.

What you’ll learn:

• What is a sales cycle?
• Why is a sales cycle important?
• What are the 7 stages of the sales cycle?
• Sales cycle best practices
• Sales cycle management: How software can help

What is a sales cycle?

A sales cycle is the collection of sequential stages sales reps follow when converting a prospect into a customer. Think of it like the structure of a deal — the building blocks, like lead qualification and sales calls, that need to be stacked in a specific order so it’s possible to drive deals to close. 

The goal of a sales cycle is to ensure reps are uncovering customer needs and resources they can map to product solutions before ever making a pitch. Sure, every rep wants to win another deal, but first you have to find a mutual fit between seller and buyer. If you don’t have that fit, you don’t have a deal.

The terms “sales cycle” and “sales process” are similar, but there’s one important difference. A sales cycle is the “what” and a sales process is the “how.” A sales cycle describes the steps from lead to nurture to close, and a sales process describes your methodology and strategy for getting there effectively. 

Why is a sales cycle important?

A well-defined sales cycle has two key benefits. First, it helps reps take the right actions at the right times, delivering helpful information and resources to prospects when they need them most. This advances the deal to close. Second, having set stages for every sale removes ambiguity and indecision about what step to take next, allowing reps to focus on building relationships.

“When you’ve really got the stages in the right order in your sales cycle down, it frees you up to be connected with your prospect in the moment,” said Elyse Archer, CEO and founder of She Sells.

Without a sales cycle in place, reps run the danger of overwhelming prospects with too much information all at once. Can you imagine getting an email from a sales rep with a pile of links — for a demo, a datasheet, a product guide, and a pricing list? No thanks.

A sales cycle stops reps from playing all their cards at the same time, and guides them to build the relationship one small step at a time. Instead of sending that big scary email, a sales rep following the sales cycle might do this: Reach out to a target prospect on Linkedin, mention a mutual contact to build trust, and ask the prospect to chat over coffee to understand their business better. When they meet, the rep listens intently and asks thoughtful questions to understand the prospect’s pains and goals. This builds the kind of relationship that can’t be forced with a shortcut. That’s the kind of relationship that ends in a sale.

What are the 7 stages of the sales cycle?

The sales cycle has seven stages, from customer research to close. While the stages in the cycle may vary slightly depending on your industry, the essential framework is the same. The key is following your cycle stages in order, using best practices in each stage to ensure deals move quickly to close.

Here’s a closer look at each sales cycle stage:

1. Customer research

I often hear that prospecting is the first stage in the sales cycle. That’s a big mistake. If you start by doing customer research, you’ll be able to find and focus on the most promising prospects instead of chasing leads that go nowhere.

To guide your research, define your ideal customer (also known as a buyer persona). This includes demographic traits like industry and business size, and psychological ones, like the motivations and challenges of target decision-makers. 

Take a look at the characteristics of past customers to get this started, then get additional insights from online research. Set up Google alerts for headlines about companies or individuals that mirror existing customers. Read headlines about target industries in trade publications. Track relevant industry keywords on LinkedIn. All of this will help you paint a better picture of what your ideal customer needs, and where you find them.

2. Prospecting

After doing your customer research, you can start prospecting. This is when you reach out to the people or companies that match your buyer persona. 

There are a lot of different ways to make that first prospecting connection — emails, cold calls, videos, events, and customer referrals. And then, of course, there are social media platforms like LinkedIn.

Start by following companies that fit your ideal customer profile. Then, look for contacts within that company and follow them on the social platforms they use most (likely LinkedIn). Comment on, like, and share their posts to show you’re interested. You can also catch their eye by posting useful content that addresses needs articulated in their posts. If you get a follow back or engagement after you’ve posted, shared, or liked their content, then send them a message introducing yourself and your company.

Another simple, powerful prospecting strategy is to do a Google search with their name and company to see if they’ve been featured in any articles, videos, or podcasts. Read or listen to whatever you find so you can identify a need or pain point you can use in your prospecting outreach. 

A word of warning: Make sure your messages are tailored to each prospect. Don’t rely on the standard “Hey, let’s talk!” Stand out by saying something relevant, like: “I read your post about the new initiative you led last quarter – how did that turn out?” Your prospects will be more likely to respond if you personalize your communication.

3. Qualification and discovery

You’ve made a connection. Now, you need to determine whether the prospect has a problem you can help solve and the resources to purchase your solution. This vetting process is commonly referred to as lead qualification. 

After making introductions, ask to set up a call to learn more about the prospect’s business, needs, and goals. This is called a discovery call. You’re trying to determine whether they’re a good fit — based on demographic traits (company size and industry), the problem they want to solve, and whether they have decision-making authority.

If the lead isn’t a fit, remove them from your list of prospects for now. Keep in mind, however, that just because they’re not qualified now, doesn’t mean they won’t be down the road. Hold onto their contact information and be prepared to reach out again if their role or company changes.

If you get a string of “yesses,” dig in to learn more about their business. What are their current pains and how your product can help? What does this problem cost the company? What happens if they do nothing? What solutions are they considering? 

Also, be sure to identify any decision-makers who need to weigh in on the deal. If there are stakeholders that you need to meet, ask for an introduction and do discovery with them as well. This is called “multi-threading” and is key for larger deals where many stakeholders are involved.  

4. Presentation and demo

You’ve uncovered a bounty of pain points and needs that align seamlessly with your solution. Hurray! Ask to set up time with your prospect and key stakeholders to walk them through your solution with a sales presentation or product demo.

Be sure to tailor your presentation to make it relevant, personal, and engaging. For example, match your language to the language of your prospect’s specific industry and business. Show how your product will work in their unique environment. And describe how your solution alone is positioned to solve the problems you uncovered during in the discovery phase.

Fair warning: You should eventually expect to hear objections. These can be about topics such as price (“The cost is too high”), timing (“We’re not ready to decide yet”), or lack of urgency (“We’re sticking with what we have.”). This is totally normal. To overcome an objection, ask follow-up questions to understand the root of their concerns, and respond with details that address their concerns. (Our article on objection-handling techniques has more guidance.)

5. Proposal

You’ve led a successful demonstration and the prospect wants to move forward. In a small business, that might be the end of the sales cycle – you close the deal right then and there. But in a more complex sale, you’re not over the last hurdle. You still need to draft a formal proposal to get buy-in from all stakeholders and decision-makers, especially those in finance who cut the checks.

Because your quote needs to make a business case to these executives, it should cover the total cost of your solution, including initial implementation, onboarding, and ongoing maintenance. Your quote should also show a clear return on investment (ROI).

Three critical questions to answer in your proposal are: Why does the customer need to change? Why now? What’s the financial impact? I recommend showing the cost of delay, too, which shows the monthly cost of waiting and can drive urgency.  

6. Negotiation

After reviewing the proposal, stakeholders will often want to negotiate a better price. In enterprise companies, this usually happens with a procurement or purchasing department that’s set up to negotiate directly with vendors. The legal department will also scrutinize your deal and the terms of the agreement.

That’s why I’ve emphasized the need to show an ROI earlier on. It’s how you can win over the CFO and the legal team. 

Even if ROI is clear, the prospect might make the case for a lower price by comparing your cost to the cost of other solutions on the market, the cost of their current solution, or their budget. Be prepared to address any discrepancies here, and come with a discount or price cut option in your back pocket to sweeten the deal (more on that below). 

If procurement is delaying the deal or asking for unreasonable concessions, lean on stakeholders who are completely bought in to help expedite things on their end.

7. Close the deal

Many people say closing is the hardest part of the sales cycle, but it doesn’t have to be. If you’ve done everything else right – there’s a fit, you’re solving a problem, you can prove ROI, you have the right people engaged – closing the deal is the easiest part of the whole process. You really don’t have to close very hard if you’re helping the business.

But let’s say you’ve presented the deal paperwork, and the signature line is still blank. There are a few closing techniques to seal the deal. 

For example, there’s “The Take Away Close” where you suggest that your prospect may not qualify for your solution if circumstances change. This is reverse psychology and it works because people want what they can’t have. Then there’s the “Alternative Choice Close” where you offer two payment options (ex. a 60-month and a 36-month term) and ask them which one they prefer. This gives them two options for saying yes instead of an option for saying no. Finally, there’s “The Potential Cost Close” where you hammer on the cost of not buying your solution.

Sales cycle best practices

The good news is that you don’t reinvent the sales cycle wheel, because there are tried-and-true best practices you can follow. These include measuring and adapting to the data, using relationship-selling techniques, and always coming back to your sales plan. Let’s take a look.

1. Make prospecting easier by building your personal brand

“When you position yourself as an expert in your space, prospects come to you,” Archer said. “That means you can cut down on outreach, dramatically shortening the sales cycle.” This worked so well for Archer that shortly after she started her sales coaching business, she had a steady stream of inbound clients reaching out for help.

To build a brand, start with a list of the questions your target customers would have about your product, and answer those questions publicly – in LinkedIn posts, YouTube videos, podcasts, or blog posts. This builds authority and sets you up as a thought leader. Prospects will see your content, reach out for more information, and hopefully  convert to customers. 

“I make a list of 52 questions my ideal customers would have, related to the solution I provide,” Archer said. “Then once a week, I go on social media and answer one question. That’s a year’s worth of content mapped out for you, and you can answer those questions in 20 minutes.”

2. Identify easy-win prospects from previous sales cycles

Knowing your target audience is a critical first step to successful prospecting, but you can take it a step further. Examine your sales over the past year to see which prospects sailed quickly and easily from early conversations to close. What qualities, needs, or interests do they share? Did seasonality, budget, or market conditions create a sense of urgency? When you can identify these shared characteristics, you can target them in future prospecting and move new deals more quickly to close.

3. Maintain good mental health so engaging is easy

What does mental health have to do with optimizing your sales cycle? Everything — because if you don’t take care of yourself first, then improving your sales cycle — including the discipline to push through the steps above and the presence to engage with prospects — won’t matter. You’ll stall out.

I learned this the hard way back in 2017, when I hit $5 million in sales and was the top seller at Salesforce. My sales had never been better, but my mental health had never been worse. That was the moment when I learned that I had to fix myself before I could enjoy the success from my sales. I prioritized self-case for the first time in my life, and what I learned is that I could be happy no matter how much or how little I sold.

Over half (63%) of sellers say they struggle with mental health, according to the State of Mental Health in Sales Report. If you’re one of them, know that you’re not alone. Read my tips for improving mental health in sales.  

Sales cycle management: How software can help

No seller can master sales cycle management without the help of technology. And why would you want to? Today’s tools are here to make your life easier, with a CRM to collect customer data in one place, sales automation to take non-selling work off your plate, and AI to inform and assist you throughout the sales cycle. Here’s what to look for in sales cycle management software:

A CRM: Customer relationship management software helps you track and act on customer data from a single source of truth. It does this by logging and updating important information about your customers as you sell and close, so you always have data at your fingertips, ready to pick up each conversation where it left off.

Automation: Sellers spend 72% of their week on non-selling tasks. Let automation do that work for you, freeing up more of your time to sell. For example, an activity management tool can automatically capture emails, events, and other types of engagement activities directly in the CRM. 

AI: Artificial intelligence, once a big fancy phrase, is now something simple, accessible, and ready to help you sell. Sales reps can speed up and deepen relationships with a wide range of tools, from predictive AI that helps you identify the hottest leads, to generative AI that helps you write emails and even create sales pitches.

A strong sales cycle is your key to success

When you develop a well-defined sales cycle, you’ll know how and when to move winning deals down the field. Supplement this with a grasp of the data, a focus on the relationships, and tools and technology to help. When you put all of this together, you’ll set yourself up many big quarters to come.