The Seven Stages of the Sales Cycle
Technology has increased the amount of data we’re exposed to in our day-to-day lives. That’s why the best sales practices of today (that yield superior results) are all heavily focused on centralized lead generation.
A well-structured lead-generation program will always be more effective than improvised, off-the-cuff attempts at sales. The creativity and on-the-spot thinking of individual salespeople are important – but only in certain stages of the overall sales strategy.
What is a Sales Strategy?
As salespeople, we all take great joy from improvising and using our individual talents to guarantee sales. But, the Internet exposes us to incredible amounts of data about customers.
Filtering buyers is very easy. So is creating specific categories for buyers. But, the modern-day challenge in sales is to appeal to these categories and convert as many ‘latent’ customers into ‘active’ buyers.
A sales strategy is essentially a pre-defined playbook to achieving these goals. When you’re working on potentially thousands of leads a day, your sales team needs to have a playbook or a sales strategy that increases your chances of closing sales.
What is the Seven-Step Sales Cycle?
A sales cycle is a series of probable events/steps that are part of almost every sales process. Sales cycles can differ based on the products and services on sale. They can also vary based on the nature of the organization.
All sales are unique. The term “sales cycle” simply refers to the time sales professionals spend between making the first contact with the customer and closing the deal. Anything that happens during this period is part of the sales cycle.
Modern-day sales cycles include – marketing plans, plans to maintain customer interest and converting prospects into customers. The seven-step or the seven-stage sales cycle is a widely used strategy among B2B businesses.
Contrary to belief, knowing and naming each step you’re taking while executing a sales process makes a lot of difference. The different stages of the sales cycle are –
1. Prospecting
2. Preparation
3. Approach
4. Presentation
5. Addressing Objections
6. Closing
7. Follow-Up
The stages/steps can vary from business to business. But, the essence of this strategy deals with themes like generating customer awareness, spending time with customers to earn their interest, and finalizing conversions by following a strict strategy.
Many B2B companies use different terms to name these stages. For example, “Getting the customer” is the same as prospecting and preparation.
Why should you even consider using these pre-defined sales and marketing steps? There are some key benefits of using (or at least knowing) the seven-step process in your own sales cycles.
• You can optimize your team to deliver the pre-defined needs of the seven-stage sales cycle.
• It becomes easier to identify pain points in your company’s sales strategy. For example, if three out of four deals of the week get stuck in the third stage (approach), your sales team can put more attention to that stage in future deals.
• Using a sales cycle process with a good track record of success makes it easy to recruit, train, and onboard new employees. Employees understand their short and long-term goals easily. They also clearly understand their responsibilities in each step in the cycle.
• It’s also easier to spot areas of the cycle where large amounts of resources are going to waste.
• Most importantly, the seven-stage sales cycle is modifiable. Managers can assess which steps in the cycle need altering and keep improving. A company’s ability to tackle unexpected obstacles also improves.
Whether the sales cycle is linear or circular – as long as a healthy number of qualified leads are moving through your sales cycle, your organization can benefit a lot from using the seven-step sales process that’s outlined in countless business textbooks. You can always customize this strategy to suit your target customers and your particular business goals.
Let’s assess each step –
1. Prospecting
Prospecting is the process of recognizing your customers with the intention of getting in contact with them. In the current world of digitalized sales, it essentially means generating leads.
When you’re dealing with a large group of target customers, your prospecting process should be based on your target customer’s industry, buying habits, etc. Anyone who shows perceived interest in your offer, product, or service should be considered a potential lead.
How to generate large numbers of leads? Traditionally, prospecting and lead generation processes have been dominated by in-person networking, trade shows, or word-of-mouth referrals. For a brief period, many businesses even found success in cold calling.
But modern-day customers (especially B2B customers) demand a more personalized approach. Thankfully, personalized prospecting can be performed over the internet through various channels – paid online advertising, social media, etc.
The more channels your lead generation funnel has, the better. But, when it comes to building personalized relationships with prospects, no channel outperforms email. Despite the fact that email marketing has its limitations, it still works – much better than all the other channels/tools in standard digital marketing sales funnels.
• 86% of business professionals claim email is their preferred medium of communication.
• When it comes to securing new sales, email marketing is 4000% more effective than Facebook and Twitter combined.
• A recent study reported that 35-50% of B2B sales are secured by the vendor who responds the first to client queries/requests.
Personalized emails have a 14% higher CTR (click-through rates). Personalized emails are also opened 26% more than standard, non-personalized sales emails. Most importantly, a personalized email is six times likelier to lead to a transaction.
Even though open rates are typically very low for sales emails, businesses can still use personalization techniques to achieve amazing levels of engagement. That’s why the top B2B marketers still use email as their main channel for lead generation.
Plus, your connections on platforms like LinkedIn, Twitter, etc., aren’t owned by your business. You’re technically renting space on their social platforms. Social platforms are always prone to changes. If tomorrow, Facebook’s ad deals and filters change, you’ll have to spend resources to adjust.
Email marketing doesn’t come with these problems. As long as your target consumers’ email addresses are obtained legally, you can target them as and when needed. Plus, it’s easier to search/store old emails. Assess how you use emails over the years to move target consumers along the purchasing path.
With email, you can also segment/filter your contact lists and hyper-personalize your marketing messages. Send emails that are specifically relevant to prospects’ interests, needs, and their respective positions in the sales cycle.
Although email marketing gives businesses immediate ROIs (much faster compared to other marketing formats like social media or paid search), like all other channels in sales cycles, it has its limitations. To grow and engage your prospect list using email marketing, you’ll need to create a clear strategy.
5 Prospecting Techniques That Leverage the Power of Email Marketing
Unless you have a healthy list of target customers, you can’t use email automation to its maximum potential. So, the chief goal of growing your email list should be acquiring as many high-quality prospects as you can.
Follow these steps to create a list of contacts full of prospects who have a solid interest in your product/services –
Fill Up Your Website with Lead Magnets
Lead magnets are things (typically free) you offer to the people who visit your website in return for their email addresses. For instance, a free eBook on the product you’re selling can be of value to your website visitors.
When they see these offers on your product page, blog section, etc., they’ll be inclined to download them for free. Bear in mind – the lead magnet should offer something relevant and valuable. It should also catch the attention of every website visitor.
• Make sure your lead magnet has a detailed, solution-focused headline.
• Make your lead magnets short but value-packed. Giving away a 150-page eBook isn’t ideal. Instead, give them a taste of your specific expertise. The lead magnet should encourage them to engage with your website’s content.
• Include actionable elements in the lead magnet. It should feature instructions that encourage the readers to take steps towards sharing their email address or learning more about the brand.
• Add clear and simple to follow CTAs (calls to action).
If the lead magnet consists of content or information target customers are eager to get their hands on, they’ll easily share their email address. As soon as they share the addresses, send them an automated email that guides them on how to subscribe to your email list.
Once you secure the email address, you can nurture your leads with email newsletters, free PDFs, eBooks, or anything that provides value to them. Eventually, when you invite members in your email list to take action, a huge chunk of them will be likely to accept your offer.
Ask Members of Your Email List to Sign-Up for Your Content
Just because you obtain a prospect’s email ID doesn’t mean they can be included in your weekly newsletters or your email marketing campaigns. That’s why most email IDs collected from contact form submissions, trade shows, etc., don’t offer too much value.
Unless these email users give their permission to your emails, all your marketing messages will enter their spam folders. Give prospects incentives to opt-in to your newsletters and content marketing campaigns.
Share links to free resources, free ‘state of the industry’ reports, etc. When they sign-up for your content and become regular subscribers, you can nurture them with more content, more offers, and more incentives.
Advertise and Share Valuable Content
Advertisements can boost your email lists of targeted prospects. Advertisements on social media platforms are great for drawing traffic to business websites. These platforms also give sellers speaking opportunities.
Be it live chats with followers, free product demos, or panel discussions with fellow industry leaders – speaking to virtual audiences, especially in the post-pandemic world, is the best direct line you can create between your business and your prospects.
Generate traffic through advertisements. Make sure to create landing pages on your websites to direct interested prospects to your email newsletters.
Use Social Media
Post tempting content to attract your social followers to your website, lead magnets, and email newsletters. Attract target audiences with solution-focused content. Build brand awareness on social media platforms.
Make target consumers view you and your firm as authority figures in your industry. Once you’ve created a long list of prospects, engage with them and build relationships of trust by constantly delivering valuable content, tips, links to offers, etc.
Once you’ve ‘prospected’ your leads and built strong relationships with them, invite them to take the next step.
2. Preparation/Nurturing
When you have a healthy lead generation and prospecting system, you’ll receive multiple client queries, requests, and calls every day. You’ll also have to contact your targets to verify whether the targets you’ve prospected are the right match for your product/service.
If the leads you contact match your criteria, you can move them along to the other stages of the sales cycle. If not, you should at least attempt to find out the needs and ‘nurture’ them. In an ideal world, every prospect would become a client.
But, in highly competitive markets, that’s never the reality. Nearly every sale B2B salespeople make, comes from building relationships with target customers. That doesn’t mean calling targets ten times a day.
But, there are less complex ways to build relationships with large groups of target audiences. Again, email marketing is the most effective way of preparing or nurturing a prospect. Whenever a potential lead signs up for the mailing list, see it as a sign that they need some extra convincing.
Creating an effective system of welcoming, preparing, and nurturing leads are not easy. But, there are some sure-shot ways of convincing interested prospects, especially email subscribers.
• Send follow-up emails to all target customers who have signed up for your mailing list.
• Deliver free resources (lead magnets) and thank them for joining your list.
• Share details like – company name, types of products/services you offer, and your job title (e.g., sales manager) in the introductory emails.
• Share testimonials from previous customers. Highlight case studies or facts that differentiate your brand from others.
• Send more emails describing your business process. Use infographics, images, and personalization to make these emails worthy of reading.
• Send emails where you take on the role of unbiased industry experts. Don’t explicitly mention your brand or products – only share valuable information.
• The fifth or sixth email you send should create a sense of urgency – tell the prospect why they need to take instant action. Describe the benefits, potential negative consequences of not taking action, and end it with CTAs to landing pages.
• Wrap up with recaps of your previous emails. Request them to schedule phone calls or request quotes.
To recap this section, here are the key objectives of the preparation or nurturing stage in the seven-step sales cycle –
• Giving clear instructions to customers regarding what they need to do to take the following steps.
• Make each step simple. All buyers (B2B buyers in particular) like the steps that offer the least amount of resistance. Bear in mind – their minds aren’t made up yet, and no one wants to click through hundreds of pop-ups.
• Reduce their sense of risk about trying out your products/services by giving them all the reasons not to distrust your brand. If possible, add no-obligation statements and use words like “try” or “money-back guarantee” in your communications.
• Encourage instant action. Use terms like “Click now for discounts” or “respond today for an exclusive offer.”
At the end of this stage, your target customer should be left thinking, “Why Not?” Always use multiple CTAs in your nurturing messages. Create large, colorful, and prominent CTA buttons on your website.
3. Approach
Without a well-defined strategy for approaching potential customers, all lead generation efforts are useless. No matter how many referrals, leads, contacts, etc., you bring in – unless you have a clear strategy of listening to their needs and resolving their problems, you won’t generate sales.
One ‘Approach’ technique that most B2B marketers use is preparing series’ of pre-decided questions. Questioning potential customers help you know and understand their position and the key details of their needs. It also makes marketers look professional and genuine.
Use open-ended questions that lead them to share important information naturally. Don’t force them to disclose their business needs or requirements. Don’t even talk about your product/services.
Instead, ask objectionable questions regarding their current situation, why they haven’t used a similar solution before, what they expect from “ideal” solutions, etc. Learn all about their demands, expectations, and hopes about the products/services you’re offering.
Secondly, set up a Customer Relationship Management tool on your website. These tools will help you organize, categorize, and follow up with all the traffic on your business website. Using CRM software tools to follow-up with prospects and make them “ready for sales.”
4. Presentation
This stage of the sales cycle is independent of the other stages. It’s when you promote your products/services in trade shows, expositions, webinars, and other lead generation events. Use this stage of the sales cycle to communicate the qualities of your offerings. Clarify how your products/services will add value to the lives of target buyers.
• Know the goals of the organizations putting on the events. Align your presentation with their goals. That’s because their audiences will have certain expectations that you must meet.
• Mingle with the crowd before you speak to them. Know what professions they’re from, demographics, etc. Always ask event managers for more information about the audiences before the event.
• Try to make connections with the audience by being honest. Acknowledge why people are there, tell them you’re there to network and ask for five minutes of their time at your private booth or conference.
• Use simple and clear CTAs. E.g., “We’re sharing a link to our free eBook at our booth.”
• Prepare product demos. Avoid presenting them to individuals; instead, speak to groups of potential customers.
• Give away freebies.
• Schedule future conversations, be it via exchanging business cards or sharing email IDs.
• Never forget to follow up.
The main goal of this stage is to get prospects to act on your CTAs. If your presentations are well constructed, expect to generate numerous highly qualified leads at every event you visit.
5. Addressing Objections
Unfortunately, most B2B marketers aren’t experts at this step. Many sales professionals will abandon their pursuit of customers after facing only one objection or rejection. That’s what separates “good” sales professionals from the bad ones. A “good” sales professional will always win over skeptics using facts such as –
• Testimonials from previous consumers
• Case studies on the products/services
• Endorsements from notable industry professionals
• Statistics, data points, etc. about the products/services
• Product demos
• Assurances (e.g., money-back guarantee)
Never discard your target customer’s concerns or objections. Always engage their objections by describing their problem in detail. Then, make interesting arguments such as “Did you 90% of our customers bring up your price summary?” Lead them to information that rejects their objections.
Handling objections also becomes easier when your website is optimized for conversions. If your website is full of fresh, counter-intuitive information about your industry, you’re far less likely to receive strong or irrefutable customer objections.
6. Closing
Once your lead prospect is convinced with your counter-arguments, ask them to schedule calls with your sales team. It’s the most critical step of the seven-stage sales cycle. Closing is a highly complicated process in itself. It involves various steps. Here’s a brief guide on closing deals at the end of the seven-stage cycle –
Address the prospect’s pain points – Here, the individual ability of the sales professional plays a critical role. Sales professionals must be able to impress the lead by giving them good reasons to close the deal. Gain more insight into their troubles and communicate how your solution can fix those issues.
Share assuring content – Pieces of information like in-depth case studies of past success stories or industrial assessments are great for convincing skeptics. Companies with dedicated content management experts create centralized resources for all content generated by or for the company. Skeptics can easily go through this content to feel reassured about the deals they’re entering.
Adapt – During final sales calls, there are always things or topics that come up unexpectedly. Although it’s impossible for sales professionals to foresee every possible thing their target customer will or won’t say during the final sales call, it is possible for them to think on their feet and adapt to unique customer queries, complaints, or demands. Recognize potential issues the customer may have early in the call. Keep the conversation flowing.
Know your solutions – Demonstrate zero hesitation in your voice whenever you’re speaking or answering about your products. Understand every little detail/fact there is to know about your offerings. Never display a lack of confidence as it immediately puts doubt in the minds of the target customer. Also, know the limitations of your products/services. Never overpromise.
Use these strategies to close the deal. You can also offer “perks” such as three months of free service or discounts for closing the deal within a specific time limit. Creating urgency by explaining that time is of the essence also helps close deals faster. Don’t forget to ask when’s the right time to follow up after the sale is complete.
7. Follow Up
A recent study assessed 2000+ US companies and found that sales professionals who respond within an hour to emails from clients have a 700% higher rate of success. On the other hand, The Harvard Business Review also reported that the chances of lead qualification drop ten times when you take over 5 minutes to respond to a lead.
Following up with customers is vital because –
• It makes customers feel respected and valued.
• They’re likelier to engage in business again if their initial customer experience ended with a positive follow-up conversation.
• It builds stronger customer relationships and can potentially lead to more sales opportunities via word-of-mouth references.
• Following up also enhances the communication skills of sales professionals. They grow more empathy for their customers while conducting these processes.
• A good follow-up system can give your company a significant competitive advantage in the market.
That’s why many businesses now use email trackers to thank customers just for opening their emails. Once sales professionals gain the awareness and knowledge of speaking with satisfied, unsatisfied, and neutral customers – their performances will also improve.
Create Customized Sales Process Using the Seven-Stage Template
Sales are a careful combination of science and art. A strong and proven template like the seven-stage cycle will help you generate hundreds of prospects and leads. But, there are no perfect sales processes.
The seven-stage cycle is always open to modifications. You can easily implement this approach to closing sales in your organization. Tools like CRM software or automated email marketing tools will make the process easier.
But, when dealing with the human touchpoints of your sales process (e.g., speaking face to face with leads), customization and creativity are still very important.
Hopefully, this in-depth explanation of the widely used seven-stage cycle will help you launch your own customized sales process.