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5 Reasons Why Your Business Needs a Sales Cycle

5 Reasons Why Your Business Needs a Sales Cycle


  • Stack define a sales cycle as ‘All of the activities from the moment you are considering reaching out to a prospect, all the way until they have wired you money’
  • When you know how long it takes to acquire a client, you can budget more accurately
  • A defined sales cycle allows you to show investors that your sales process is far superior to your competitors
  • You know the right questions to ask, at the right stage in the process, to either qualify or disqualify a prospect
  • Everyone can spend time on the things that really matter

The term ‘sales cycle’ can be a little bit hazy, and leave some with more questions than answers. Is it just the sales process? Is it what’s in your CRM? Or is it something completely different? 

At Stack, we define the sales cycle as: All the activities from the moment you are considering reaching out to a prospect, to the moment they start wiring you money. 

That might seem like a big task, and to be honest, it is. However when you begin to break the cycle down into different steps, and everything is defined, documented and organized, you soon begin to piece together your cycle and appreciate why it’s important.

We’ve put together five benefits of a defined sales cycle, to help you see how it could work for your business:

1. It makes your budget more accurate

Whether you’re doing a top-down budgeting exercise (picking the number you want to hit and backing into it) or the bottom-up version (working forward in time, month by month), it’s imperative to understand how long it takes to acquire a client. 

For example, if you know on average that your sales cycle, from the time you consider reaching out, to when your clients start paying you money, is four months long, that’s a solid starting point. Armed with that information you’ll have a much better chance of articulating how many clients you can expect to acquire in a given time period, with your current resources. If instead, you estimate your sales cycle to be somewhere between four and seven months, then accurate budgeting becomes virtually impossible.

2. Disqualifying prospects becomes easier

A mantra to consider when qualifying prospects is: A quick ‘no’ is almost as good as a ‘yes’. It might sound a little flippant but it highlights the underlying principle that time is extremely valuable. If you have a clearly defined sales cycle, then you know the right questions to ask, at the right stage in the process, to either qualify or disqualify a prospect. 

This allows you to get prospects that aren’t ready to buy, for any number of perfectly legitimate reasons (timing, budget, priorities etc), out of the active funnel early. You can then spend more time on those that are much closer to being ready to buy. Essentially your defined sales cycle gives you the peace of mind that you’re focusing on the right type of prospects and not wasting anyone’s time along the way.

3. Internal communication becomes more meaningful

Many times miscommunication simply comes down to a misunderstanding. In a discussion on a sales pipeline, you might say you’re having a good conversation with a prospect. Your internal team might then envision that this prospect is getting close to closing, while in reality, you know the good discussion was just the first one of many to close the deal. 

When a sales cycle is defined and labeled well (with each stage and step having a specific name), the ability to get and stay on the same page increases. All parties can refer to prospects in a specific stage, and the sales activities that have been done and need to be done at that point, making conversations and projections more meaningful.

4. You can show what really makes your sales machine hum

Many times stakeholders (investors, partners, employees, potential employees, etc.) want to see how a company performs specific tasks:  How do you hire so well? What makes your employees seem so happy? What makes your sales process better than other companies? On that last question, you can point to a well-defined, documented and organized sales cycle. 

It’s the blueprint for your sales process, and having this well understood combined with the confidence to articulate its nuances will help you stand out from your competition.

5. You’ll spend more time on the right things

Time is the most precious resource. We’ve all heard this before, and at Stack, we believe it’s true. If that’s the underlying principle that you live by, then you want to do everything possible to spend the time of your clients, prospects, partners and employees as wisely as possible. 

A strong and well-defined sales cycle helps everyone spend time on the things that really matter. It’s a guide for the sales team on what they should and shouldn’t be doing, both from a macro level (focusing on the right prospects) and a micro level (making sure they’re asking the right questions, at the right times). It gives each member of the team autonomy and confidence in what they’re doing, knowing that time is being spent wisely. Taking a little bit of time to get your sales cycle right can dramatically impact a number of key areas:  planning, people, execution, and communication. So while it’s not glamorous and it takes some work, when you get it right, it can make all the difference in growing and scaling your business.

This article is written by Scott Jenkins, Co-founder of Stack. If you’d like to speak with one of our experts and arrange a demo of Stack to see it in action, click below. 

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