Sales Cycle Definition, Stages & Free Template

The sales cycle is the step-by-step process of closing a deal. From retail to complex B2B sales, all salespeople undergo certain common steps, like demoing their product and addressing customer concerns. After completing the sale, the final step is to ask for referrals and repeat the process for new leads – that’s why we call it the sales “cycle.”

In this article, we’re going to dig deep into the sales cycle and show you how to use it to make your own “cheat sheet” with a simple template. We’ll also show you how to set up Pipedrive, a sales-focused CRM with an intuitive visual pipeline that makes it easy to track leads from prospect to close. Sign up for a free 14-day trial and follow along below.

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Sales Cycle Stages: A Common Example

While the exact stages will vary from business to business, here’s a common sales cycle that can be applied to many different businesses.

Six Sales Cycle Stages

1. Initial Contact
2. Qualification
3. Presentation
4. Evaluation
5. Closing
6. Ask for Referrals

Whether you sell shoes or real estate, these same six stages nearly always apply. Some can happen in an instant – like addressing a customer’s concern about the shoe color by declaring ”Oh, we have that in red too.” Other times, it can take weeks (or even months) just to qualify a lead, as with many real estate or complex B2B sales.

Why You Need a Sales Cycle

Think for a moment about every lead in your pipeline. Chances are there are big differences from one to another. Not just in the type of client they are, or in the product they’re interested in — but often more importantly, in their closeness to a sale.

A cold email lead is hardly in the same category as someone who watched a presentation and requested a proposal. As such, you would approach each client very differently – from the language you use, the frequency of communication, and even the method of contact.

The Right Message at the Right Time

A sales cycle gives you a template for what language you should be using, and actions you should be pursuing, at each point in the sale. By categorizing leads based on where they are in the sales cycle, you can make sure you’re putting the right message in front of the right lead, at the right time.

For instance, you aren’t going to set up a face-to-face meeting with an unqualified lead. Nor are you going to send an impersonal email to somebody reviewing your proposal. Depending on their stage in the sales cycle, each lead requires a unique set of rules.

You Can’t Improve What You Don’t Measure

The sales cycle helps you pinpoint what’s working and what’s not. Using a CRM like Pipedrive, you can view simple visual reports on how your sales are progressing, and how (and why) sales were lost.

If you notice any particular trends – like most sales are getting lost in the evaluation stage, or one of your employees is qualifying leads too easily – you can address them strategically. Similarly, if one of your employees is doing a great job, you can determine why and then roll those same tactics out to your entire team.

Over time, your sales cycle is likely to be revised and rewritten as you continue to test new strategies. By using a CRM to measure what’s happening at each step of the sales cycle, you can get the data you need to help you continuously update and improve your sales process.

Sales Cycle Template: What to Do at Each Stage

To explore each of the steps below in more detail, check out our Sales Cycle Template PDF.

The five steps of a typical sales funnel

Here’s an example of what your timeline and focus might be for each stage of the sales cycle:

Finally, follow up with your customers to see if they’re satisfied with their purchase. If so, ask them for a referral — they may be happy to recommend you to another client.

Adding/Removing Stages

If our example above doesn’t quite work for you, it’s OK to add or remove a stage. For example, some businesses add a “preparation” stage between steps 2 and 3. In this stage, the focus would be gathering the information needed from a client in order to prepare the presentation.

Other businesses might remove “qualification” if it’s not a big strain on their resources to present to every lead. For example, my cable company automatically sends a quote after I submit a request form. For them, it’s easier to jump to step 3, rather than filter leads in step 2.

Why You Should Measure & Manage the Sales Cycle with a CRM

So at this point, you have an idea of what your sales cycle is and what it involves during each step. It may be fairly complicated, with different steps for each product and/or different plans-of-action depending on how a lead responds.

You might be wondering how to sort all of this out, let alone get employees to start following it. Well, the answer to both is a Customer Relationship Management (CRM) system.

A CRM is software that helps manage your interactions with leads and customers – it gives your employees a template to follow throughout the sales cycle. In addition, a CRM provides business owners a high level of oversight. You can easily monitor how salespeople are performing, which stages are losing the most customers, how different lead sources are converting, and more.

In greater detail, here are the main benefits of using a CRM:

1. 1. Evaluate your Sales Cycle – A CRM tells you and your employees what to do at each step of the sales cycle and tracks each of your deals as they progress through the sales cycle. This allows you to identify any trends – such as if deals tend to falter during a particular stage – and take steps towards solving it.
   2. Measure Sales Performance – Additionally, you can find out how each salesperson has been performing, including their overall revenue and win/loss ratio. You can identify any specific areas for improvement – say, if a salesperson tends to lose deals during “evaluation.”
   3. Forecast your Earnings – By tracking where each deal is along the sales cycle, you can estimate your chances of success and thus predict your earnings. You can do this for your entire company or for specific employees.
   4. Integrate with other tools – When your CRM integrates well with other software, you can more easily bring deals through the sales cycle.

Ready to get started? The remainder of this article will take you through setting up a visual sales pipeline in Pipedrive CRM. We’ll show you how to add your contact data, customize your sales cycle, then how to evaluate your sales cycle for insight on what’s working and where there may be opportunities for improvement. Click here to start a free 14-day trial, and follow along below.

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How to Set up Pipedrive CRM

When you log in for the first time, Pipedrive will give you a quick visual tour of the CRM. You can also click on the ‘?’ in the top-right of your screen to expand the help menu, which includes links to tutorials and how-to guides.

Help guide and tutorial links

Step 1: Add Your Contact Data to Pipedrive

Pipedrive makes it easy to add your existing contacts, leads, and their data:

1. Click on the ‘Contacts’ button on the top navigation bar to expand the sub-navigation
2. Click on ‘People’ to add individual contacts or ‘Organizations’ to add businesses or other organizations
3. Click on the ‘…’ in the top-right of your screen to expand the data menu
4. Click on ‘Data import…” to bring you to the data import screen
5. Choose whether to import data from either another third-party software or a .csv file that you have saved on your computer — for the purposes of this guide, we’ll assume you’re importing from a file

Pipedrive includes a link to download a file of sample data on this page. We’re going to use this file for demonstration purposes.

6. Click on the ‘Upload file’ button, navigate to the file on your computer, and wait for the file to finish uploading to Pipedrive

Next, we’ll make sure that Pipedrive correctly mapped the fields from your file. Mapping fields just means that the columns in your file correspond correctly with the information in Pipedrive. Pipedrive attempts to do this automatically by detecting the types of data in each column, which we’ll review and confirm or correct.

Import and map your existing contact data

The two columns on the left side of the screen show Pipedrive’s fields and your file’s, respectively. Check to make sure that they match correctly — if not, you can drag your file’s fields to reorder them until they are. Once you’re done, click the ‘Next’ button on the bottom-right.

On the next page, select ‘Merge data’ so that you’re not creating any duplicate entries. Pipedrive will also load the first three rows in your file so that you can preview it before finalizing the import. Assuming the information is correct, click the ‘Start import’ button on the bottom-right. Once the import is complete, your data will be available in Pipedrive.

Step 2: Add Your Sales Stages

Adding your sales stages is quick and easy. Pipedrive includes some default stages, but you can customize them to fit your business’ sales cycle.

1. Click on the ‘$ Deals’ button in the top navigation to bring you to your Deals page
2. Click on the ‘Pipeline settings’ button in the top-right to bring you to the Customize sales stages page
3. Click on each stage in the default pipeline to bring up the Edit stage modal window
4. Edit the name of the stage to match the corresponding stage in your business’ sales cycle — for this guide, we’ll use the stages we suggested above
5. Click the ‘Save’ button and move to the next stage in the pipeline

If the number of stages in Pipedrive doesn’t match the number of stages your business uses, you can either click the ‘Add stage’ button to add more or click the ‘Delete this stage’ link in the modal window to delete any extras.

Our finished pipeline looks like this:

Customize your sales stages

Back on the Deals page, we can see each stage of our sales cycle. If the data you imported included deals in various stages, you’ll see them in lists according to their stage. You can then drag and drop each deal between stages as they progress.

Drag and drop your leads

Step 3: Evaluate your Sales Cycle

Click on ‘Statistics’ in the top navigation to reveal the sub-navigation, then click on ‘Dashboard’ to bring you to your dashboard.

Pipedrive‘s dashboard displays your business’ sales stats

As you and your team begin to use the CRM to manage your leads and opportunities, you can use your dashboard to view the team’s performance at a glance. To filter the view, you can change the date range using the first of the three drop-downs in the top-right, the pipeline (if you’re using more than one) using the second drop-down, and/or the salesperson using the third. Some of the data shown in this view includes:

• New deals shows you how many new deals have been added during the time period by the salesperson specified and their total value
• Lost deals shows you how many potential deals were lost during the time period by the salesperson specified and their total value
• Won deals shows you how many deals were won during the time period by the salesperson specified and their total value
• Activities added lists the types of activities added during the time period and how many of each were added — for example, sales calls or lunch meetings
• Activities completed lists the types of activities completed during the time period and how many of each were completed

You can then use this data to identify trends in your sales team’s performance. For example, what is your best performing salesperson doing differently than your worst? Are they making more phone calls, booking more in-person meetings, or spending more time focusing on fewer, but higher potential, leads?

The Bottom Line

Every business with a sales team uses a sales cycle, whether they’re aware of it or not. Getting to understand the stages of the cycle can help you close a lot more deals and manage your team a lot more efficiently.

For one, you’ll be able to pinpoint exactly what’s working and what’s not. Rather than trusting your gut on which email templates or call scripts are working best, you can open your CRM and find the exact results.

Secondly, it helps everyone do their job more smoothly, whether it’s salespeople who get clear guidance each step of the way, or managers who get one-click reports on how sales are progressing or alerts on hot leads.

To start managing your sales cycle with Pipedrive, sign up for a free trial.

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