In a post a few weeks ago (you can find it here), I talked about the confusion that salespeople and sales managers are having with defining their sales cycles. I hope this post can clear that up a bit.
The sales cycle is all about time, and as time is the most precious resource the salesperson has, time management (as it applies to sales opportunity management) is essential to successful selling.
Sales cycle is one of the most commonly used terms in sales, but often misunderstood. The sales cycle is simply the length of time the salesperson takes to sell something. The sales opportunity has a beginning and an end. The time in between determines the sales cycle.
When does the sales cycle end? It ends when the sale is finished, there is no argument about the end date—the sales opportunity is history. However, predicting the end of the sales cycle before the sale concludes is sometimes difficult. The salesperson needs experience and skill to pick an end date (or close date) somewhere out into the future. This exercise is forms the back bone of the art of accurate forecasting.
When does the sales cycle start? At first glance, this should be easy to recognize. The sales cycle starts when the sales opportunity is first identified by the salesperson. The customer has started the process of buying, or may already be in the process of buying. The salesperson must recognize the buying signals and make the decision—is this a sales opportunity. This identification process is very important—make it too tight and opportunities get overlooked, or if too loose, the portfolio can quickly fill up with leads, not opportunities. It’s best to err on the side of caution. Once the opportunity “gets in the list”, in a good sales automation system, it won’t get forgotten about.
Often the crucial step of identification is neglected, and the salesperson and sales team leave the question open—has the customer started the effort of buying something? If question is left unanswered, the opportunity doesn’t get recorded and the selling strategy might not get initiated. And, if your SFA or CRM system doesn’t know about the opportunity, it can’t be expected to effectively assist salespeople through the sale.