The sales cycle can be a mysterious concept for a lot of people. Most businesses subconsciously understand that it exists, but they may not use the cycle as effectively as possible. 

The sales cycle is a universal reference of what happens in a successful sales process for all kinds of industries. 

Are you considering the sales cycle in your sales strategy? And what is the sales cycle anyway? Read on to learn more about the eight stages of the sales cycle and how you can implement them into your team’s sales process.

What is a sales cycle?

A sales cycle is a well-defined, universal set of stages that covers the entire process of a sale, from first contact until closing and follow-up. 

The sales cycle is often confused with the term “sales process.” While they are closely related, their meanings differ slightly. 

Think of the sales cycle as the stages of making the sale, and the sales process as the method of completing those stages. In other words, the sales cycle is the “What,” and the sales process is the “How” of selling.

Why is the sales cycle important?

Having a well-defined sales cycle is important for empowering your sales team to boost your close rates and increase your bottom line. Here are a few benefits of having a sales cycle for your business:

  • Simplifies the onboarding process: Ensure a smooth transition for new sales reps by having clear-cut processes to closing a sale. Using the sales cycle for your process makes training a simpler and more pleasant experience.
  • Allows you to analyze and optimize your current practices:  A sales cycle lets you get an objective view of where you could optimize your sales process. Maybe you’re pitching and rushing to the price negotiation stage before handling crucial objections. Or you’re not taking the time you need to nurture a B2B lead into a customer. You can use the sales cycle as a reference to plug any leaks or loosen up bottlenecks in your sales process.
  • Removes ambiguity: When you have a well-defined sales cycle, you have a machine that takes the busy, unproductive work of wondering what to do next out of your hands. Your sales team will have clear tasks and guidelines about how to proceed based on prospect actions and can focus on building the relationship, which is crucial for sales.

The 8 stages of the sales cycle

Read on to learn more about the eight main stages of the sales cycle, including a foundational step to ensure a successful close.

1. Researching

Before you start prospecting, it’s important to get a clear understanding of your ideal customer, to build an accurate ideal customer profile (ICP). 

Your ICP describes the type of company or individual that will benefit the most from your product or service and, in turn, will help you reach your revenue goals. 

When you’ve completed this stage, you should have one or more descriptive profiles that include information such as industry, location, number of employees, etc. 

2. Prospecting

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In the official first stage of the sales cycle, the sales team researches and compiles companies—prospects—that best fit the description outlined in your ICP. 

By the end of this stage, you’ll have a contact or list of prospects that your team can contact.

A best practice at this stage is to do some research on your prospect before reaching out, so you can personalize your outreach.

A great tool during the prospecting stage is a customer relationship management (CRM) platform. A CRM helps you manage customers and prospects by storing contact data, your team’s notes, and a complete history of your interactions, including phone calls and emails, so you can get the big picture of each relationship and optimize every interaction.

With the CRM features in Nutshell, you can manage relationships, gain oversight of your sales processes, generate advanced reports, implement email automation, and much more.


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3. Contacting (Connecting)

At the contact stage, the sales rep will make their first connection with the prospect.

There will likely be a lot of back-and-forth communication and follow-ups, and sometimes this step can meld into the next since you’ll be gathering relevant information about your prospect as you contact each other throughout the connection period. 

According to a HubSpot survey, 42% of sales professionals find prospecting and outreach to be the most challenging part of the sales process—and for good reason. This stage tends to take significant time and yields little results compared to the input needed. It’s not uncommon for a significant number of your prospects to ignore your contact attempts or refuse a qualifying discussion.

The culmination of the connection stage will lead to booking a one-on-one discovery session to move prospects to the qualifying stage. 

4. Qualifying (Discovery)

At the qualifying stage, the sales rep attempts to deepen the relationship with the prospect while making sure that they qualify for the solution that they’ll eventually offer.

You’ll have a one-on-one with decision-makers and learn more about them and their business. Specifically, their pain points and goals in relation to your solution. 

Not only are you learning more about your prospects, you are also qualifying them. At this stage, you will learn about their problems and budgets to determine whether your solution is a good fit for them. If it is, your sales team moves on to the next stage: pitching.

5. Pitching

At this stage, you’ve likely gathered enough information to make a successful case as to why your prospect should choose your solution. 

The pitching stage is a crucial time for your sales reps to shine, and it’s built on the foundation of your research and how well you’ve nurtured the relationship with your prospect. 

Usually, the pitch comes in the form of a presentation that you show the decision-maker. 

While having a universal pitch is best practice for sales teams, it’s best practice to modify and prepare your pitch, tailoring it to individual prospects.

6. Objection-handling

The best sales teams know how to handle objections that are on their prospect’s mind before they voice them.

It’s always best to handle potential objections proactively if you can, but sometimes the prospect can come up with questions on the spot that can throw you off guard. 

But it’s crucial to not see objections or questions as attacks. Often, if a prospect is raising objections after your pitch, it means that they’re considering your solution, and want to put any doubts to rest before they make their decision. 

7. Negotiating

Many new businesses may expect this stage to go fairly quickly. “We’ve made our presentation, we’ve handled all their objections. Our product is clearly a perfect fit for their needs and budget. So it’s a no-brainer – of course they’re ready to buy!” Most of the time, it’s not that simple. 

First of all, objection handling is usually not done in just one session and will overlap with your negotiation process. The reason is that in a typical firm of 100-500 employees, an average of 7 people are involved in most buying decisions. And each person may have their own reservations and objections before coming to a consensus. 

Additionally, a large part of the negotiation stage will be about price. This is natural—most businesses want to use the least amount of money possible while still getting quality services and products. 

It’s good practice to have solutions on hand—that won’t put your business in the red—when potential clients attempt to negotiate your asking price.

8. Following up

At this stage, you made the close and welcomed a new customer. It’s important to nurture a relationship with your new clients and customers. 

The follow-up stage is ongoing, and the process involved is unique to each business. Some may send regular email communications to build the client relationship. Others may offer discounts and vouchers to loyal customers. 

Whatever your means of client nurturing and following, the goals of this stage are two-fold: to encourage customer retention and to encourage referrals.

According to Dale Carnegie, 91% of customers say they’d be willing to give referrals, but only 11% of salespeople actually ask for referrals. 

Since referrals are crucial to business growth, referral requests are a necessary step in a healthy sales cycle.


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Best practices for creating and optimizing your sales cycle

Now that you know the stages of the sales cycle, you can use it to inspire your business’s own sales process

The eight universal stages of the sales cycle can be applied to almost any business that makes sales, but it’s also important to tailor the stages to fit your business and industry best.

Here are a few tips for incorporating the sales cycle into your sales team’s rhythm.

Observe your team through the sales cycle

Before you can make changes to improve your sales processes, it’s best to observe the cycle as it is. If you have well-performing stages in your process, holding on to and working around them would be best. 

You can also gather data on how long each stage in your current cycle takes—are some stages taking too long, or are some stages repetitive, frustrating your sales team as well as your prospect? 

Another great observation to make if you want to optimize your sales performance is observing individual sales representatives. Sales reps may perform well in some stages but could be better in others. You can use this information to consider an optimal cross-collaboration between your sales team to maximize their strengths and close more deals.

Make it shorter

You could shorten some stages to suit your sales process. Some stages might be less relevant to your business based on your typical prospect behavior. 

For example, you may find that your business often doesn’t have to go through a lengthy negotiation process before making the close. In that case, your business’s negotiation stage might be shortened or reduced as a process in the objection-handling or pitching stage. 

Make it longer

Sometimes, the inverse might be better for your sales teams. Many industries may require extra time spent on certain stages, such as the connection and sales pitch. 

For example, if your product or solution is a first in its industry, more education and nurturing may be required before your prospect can make an informed buying decision. 

If that’s the case, you could optimize your process by splitting up a stage. If your connection and pitching stages require, for example, a separate pitch on educating your prospect, and then another one on making the sales ask. It may be beneficial to separate these stages into multiple stages. 

Customize your sales cycle

As you know by now, each business has unique needs when it comes to what to include in its sales cycle. Whatever your needs are for your sales team, don’t be afraid to customize the sales cycle to fit your business model best.

A great way to customize your sales cycle is by providing your team with guidance about what tasks to complete in each stage. By outlining exactly what should happen during each of the stages listed above, you ensure each rep follows a process that works for your company and industry.

How you can simplify your sales cycle with Nutshell

Nutshell CRM is well-equipped to help your business optimize its sales cycle. 

With customizable sales pipelines, automated task handling, and cross-team collaboration, Nutshell is designed to help small businesses sell more. 

Take advantage of our white-glove solutions, up-to-date resources, and live demos by signing up for a 14-day free Nutshell trial today.

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