The Sales Cycle is the time / process between when the 1st contact with the customer is made to the time the deal is closed.
A Product Sale or a Service Sale usually would begin with maybe an enquiry from the prospective customer on the pricing of the product or the timelines for the delivery of a certain service to the point when the Prospect either accepts the terms and signs a deal or declines the offer.
A typical Sales Cycle can take anywhere from a few days to over a year! Sales Cycle times and processes vary enormously depending on the company, type of business (product/service), the effectiveness of the sales process, the market and the particular situation applying to the customer at the time of the enquiry.
The Sales Cycle time is also referred to as the Sale Gestation Period (ie from conception to birth - enquiry to sale). The sales cycle in a sweet shop is less than a minute; in the international aviation sector or civil construction market the Sales Cycle can be many months or even a few years.
A typical Sales Cycle for a moderately complex product might be:
1. Approach
2. Qualification
3. Agreement On Need
4. Sell The Company
5. Fill The Need
6. Act Of Commitment
7. Present proposal and CLOSE sale.
Sales Funnel - describes the pattern, plan or actual achievement of conversion of prospects into sales, pre-enquiry and then through the sales cycle. So-called because it includes the conversion ratio at each stage of the sales cycle, which has a funelling effect. Prospects are said to be fed into the top of the funnel, and converted sales drop out at the bottom. The extent of conversion success (ie the tightness of each ratio) reflects the quality of prospects fed into the top, and the sales skill at each conversion stage. The Sales Funnel is a very powerful sales planning and sales management tool.
More on this later...
