The other SQL

Last week I explained how Sales is a process of converting prospects into buyers. In this issue I’ll dive deeper into the steps of that process, which most companies refer to as their sales cycle.

1. What is a Sales Funnel?

As I mentioned earlier, a sales cycle is a process that converts prospects into buyers. A sales funnel is the aggregate of all relationships broken out by where they are in the sales cycle. A sales funnel is also sometimes called a sales pipeline.

There are usually more prospects than customers in the sales cycle. Each step in the cycle reduces the amount of potential buyers. Visually this aggregation looks like a funnel.

The Steps of the Cycle

Not every sales cycle looks the same. Some involve more steps. Others may be more hands-on. It really depends on the business model, and the revenue size of the deal. Typically the larger the deal, the more steps involved in the cycle.

Let’s break down some key stages of the sales cycle.

2. Sales Cycles and Data

What does all this matter to you? You’re not going to be doing any sales, right?

Remember that a business is an operation. The sales cycle is a critical function of this operation. As a data professional, you are the expert on how your company collects and uses the information from the operation of your business.

You may take this expertise for granted, but information organization is a huge pain point for Sales teams that you can help with.

I mentioned earlier how companies will have different sales cycles, and use inconsistent language to label the different stages of their cycle. Sales is counting on you to help them think through how to best collect this data.

Data teams can work with their Sales team to map out the buyer journey, ensuring consistent naming conventions and clarity on what’s happening at each step of the cycle.

This will also make it easier to help them think about metrics that will help them improve their sales cycle. The more proactive you are about this, the less painful it will be when the company wants to use this data.

This will become more clear when I talk about CRMs in the next issue.

3. Why Sales Cycles are important to the business

I explained why revenue is so important to the business in my intro to Sales. But executives will also want to know how much revenue is sitting at different stages in the sales pipeline.

This is especially useful for companies with longer sales cycles and early stage companies. If revenue is light, but prospects are booking a ton of demos, then that means that there is demand for the product or service.

Both Sales and executives can look at the sales funnel to see where prospects are dropping off. If qualified prospects are booking demos but not becoming customers, maybe its time to change the pricing. These are insights that present an opportunity to alter the Sales strategy to create a more efficient sales cycle.

There’s one more very important reason that sales cycles are so important to the business. They save time.

Sales efforts are expensive. By qualifying prospects up front, Sales teams make sure they aren’t spending time (and therefore the company’s money) selling to prospects that aren’t likely to purchase.

A sales cycle that finds the right potential buyers is critical to efficient business operations.

Next week we’ll begin our transition out of Sales when we talk about CRMs.

Thanks for reading!

P.S. I’m writing this for you. I’d love to hear from you how I can make this newsletter better! If you are enjoying the content so far, please let me know by sharing the newsletter with your colleagues or on LinkedIn. Have a great day!

-Zack