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Underestimating the Sales Cycle

Thursday, January 17, 2013   By Mike Reddy

 



The sales cycle, the process from initial customer contact to final settlement of the account, has a deep impact on the success of your small business.

Small businesses often underestimate the complex aspects of this cycle - the very cycle that converts your hard work into success.

Three common mistakes are:

  1. Underestimating the length of time it will take to complete the cycle.
  2. Believing that merely creating a strong online presence will generate overwhelming customer response.
  3. Underestimating the cost, effort and resources it takes to actually get a valuable customer through the door.

The first step in avoiding these pitfalls is to make sales at the right price your top priority. Sales specialist Phil Lee advocates the "10 before 10" rule - pushing to make ten sales calls before 10am.

Engage in varying sales strategies first thing in the morning - calls, meetings, follow-up's, site visits, social media upkeep, etc.

Calculate an actual sales cycle timeframe. Employ a CRM or simple spreadsheet to track leads all the way through the process and then prioritise customers who move quickly through the cycle.

Once cash flow is more secure, it is advisable to take on those customers who have a longer sales cycle timeframe.

Under or overestimating any stage of the sales cycle can have a ripple effect, trickling all the way down the line.

Sales cycles are symbiotic and each stage must be functioning independently in order to work together.

Take the time to determine the clear stages of your cycle and evaluate efficiency at each stage.

Trust is a huge aspect of the sales cycle that often gets underestimated. You must work to gain the trust of your customer.

Make commitments, keep them and ask for reciprocal commitments to show your customers that you value the relationship and its benefits to both of you.

Some sales professionals claim that unashamed honesty is one of the biggest sales cycle secrets. And remember, you should always strive to under promise and over deliver.


Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.