Sales Cycle Analysis – How to Assess Your Progress
Established organizations use sales cycle analysis for competitive insight. Every sales person will tell you that sales is a people-based function. Making contacts, addressing concerns, building trust, and maintaining relationships – each of these activities is about connecting with people.
Sales is a Process
Sales may be a people-based function, but it is also a process. Just like an engineering process, it’s a series of steps where each step is a building block for the next. Like an engineering problem, you can analyze the process. You can assess your performance by breaking down the steps and looking at where you are winning and where you are losing. That’s what sales cycle analysis is all about – analyzing performance to make improvements and move closer to excellence.
The Sales Cycle
The sales cycle can be broken down into these seven general steps.
- Initial contact
- Planning the approach
- Needs Assessment
- Negotiation and Handling Objections
- Closing the Sale
- Account Management / Follow-Up
Naturally, each step has its own priorities, goals and tactics. Furthermore, each step is a function of enhancing the client relationship and maintaining a successful business enterprise.
Use Sales Cycle Analysis for Competitive Insight
Are prospects turning into customers? If not, at what point are they falling away? Sales cycle analysis aims to answer these questions.
Create an analytics table – reference your customers and prospects alongside the process steps outlined in the sales cycle. For each customer or prospect, identify the point in the process where they made their buying decision, or where the company dropped out of the process.
You may find that you’re getting your foot in the door, but you are failing to make it to the next step. Perhaps you are pinpointing their needs, but something in your presentation is not working. Or you may be failing to accurately pinpoint the customer’s needs. You may need to improve your expertise on the industries you are targeting. Whatever you discover will set you up for a “deeper dive” into what’s happening – an opportunity for insightful learning and improvement.
Conduct Customer Win / Loss Interviews
Here is your opportunity for a deeper dive – a key source of insight into your sales cycle effectiveness. Conduct win-loss interviews with your prospects and clients. In other words, ask for their feedback.
Start with your existing customers. They are already using your product every day and it’s part of their own business processes. Building on those results, approach the prospects you engaged in the sales process. In a B2B industry, this approach is very common and acceptable.
Your questionnaire can go something like this:
- Overall, why did or didn’t we win the business?
- What did you view as our strengths and weaknesses?
- What was your perception of our company before the process? How did it change through the process?
- What are your pain points? What are your expectations in our ability to solve that pain? What problems did or didn't we solve?
- What other firms competed for the business? Why did you include our firm in the process?
- What was your perception of the sales team's management of the relationship? Did you meet other personnel from our organization? What was your impression of them?
- What were your thoughts on the proposal and presentation?
- Were you comfortable with our capabilities? Which capabilities were most important to you?
- What were your thoughts about our pricing? Were you able to determine true value from our pricing?
- What advice would you give us for working with you in the future?
- Would you recommend our solutions to others?
- If you are a current customer, would you feel comfortable participating in a case study, testimonial, joint press release, or beta test for a future solution?
Sales process analysis is about continuous improvement. Dive into your sales process. Pinpoint the stage at which you are gaining customers or where your prospects are going elsewhere. Is there an opportunity for learning here?
Then do a deeper dive with win-loss interviews. What were their reasons behind their decisions?
The competitive advantage gained from this process is invaluable for fine-tuning your sales process and turning prospects into customers.