Sales and Buying Cycles
"Shorten your sales cycle & increase your win rate through competitive excellence"
Editor’s note: Stu Schlackman is a frequent contributor to this blog.
What’s the difference between the sales cycle and the buying cycle and why is it critical? In a nutshell, it is another point-of-view (POV) issue. POV of the people and teams involved determines your strategy. Your role as the seller is different from their role as the buyer – leading to different POVs. Understanding this, how can we impact these?
Processes
Two separate processes are linked but not identical. You are engaged in a sales process as you interact with the buyer. Call this process the “sales cycle.” The seller’s role in this cycle is to discover candidates, provide information, influence their decisions, and facilitate the closure of the purchase. This process proceeds in a generally sequential flow. Buyers are engaged in their own process called the “buying cycle”. They discover a need, seek information on products/solutions, qualify candidates, weigh the alternatives, make a decision, and acquire the product/service. These processes intersect in meetings and information exchanges during which you each have separate POVs linked to your goals – but these goals are not necessarily the same.
Sales cycle
We see a progression of the customer moving in steps toward making a decision to purchase. The sales cycle takes this process toward our goal of making the sale. How we set our strategy and actions in the sales cycle directly impact the progress we make. We control a portion of the interlinked processes in the sales cycle, but the customer controls the buying cycle. This leads to a problem we, as sales professionals, have in forecasting the time when the sales cycle will end, when the purchase order will be awarded. We predict closure from our POV. How many times have you seen the sales cycle slip? Nearly every forecast of a business opportunity slips out from the time they are expected to close. Closing business as forecasted has become the exception. Why? We do not control when the business is awarded, the customer does! Just as with personality color, we must consider the customers POV.
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Buying cycle
The customers see the sales cycle as just a segment of the entire buying cycle. The buying cycle process includes the following:
- Client’s needs and budgeting for a solution
- Evaluating solutions- both internal and external
- Making the purchasing decision
- Implementation
- Evaluation of how the solution is performing.
In the sales cycle all we see the customer evaluating our solution and asking questions. We qualify the opportunity and ask about their timing and (mistakenly) take that as a firm commitment as to when they will make their decision. The problem is that we are not involved with the customer when they make their decision. The more engaged and participative we are in the buying process, the better our chances are of winning the business. If we come into the process at the beginning of the buying cycle, we better understand their complete needs, the expected impact and return on investment which will lead to more influence during the sales cycle. We can begin to see this from their POV – a POV that is never fully captured in documents. How often have you responded to a request for proposal you received and won? Consider: who assisted in writing the proposal? Possibly one of your competitors who helped assess the needs in the beginning of the customer’s buying cycle.
What can we do to impact the sales and buying cycle?
- Understand their POV which will be different from yours
- Get involved with the customer in the earliest possible stage where they are assessing their needs and budgets
- Create a value proposition from their POV that differentiates you in their eyes from your competitors
- Build relationships with the key decision makers and influencers that are in control
- Expect changes and be flexible
- Understand the personality “color” styles of the decision makers
Many times in the sales cycle we try to create a sense of urgency. We see a situation from our perspective and not the customers. It’s impossible to find out everything that’s gong on behind the scene. Our knowledge is imperfect and our access is limited. Any sense of urgency is created within the customer’s organization from their goals, priorities, and time constraints. We’re fooling ourselves if we think we can create urgency! Realize that something of high priority to us is not always the same priority for the customer.
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The role of personalities
Yet inside each “role” they are playing in the buying process, is a real, live human with a specific personality. Understanding the decision makers personality styles can make the difference in winning the business or not. Playing to what each decision maker values is critical. We also need to understand that each personality style evaluates making decisions differently and that difference will affect their own process timing.
Gold and Green personalities tend to be more objective when making a decision while Orange and Blue personalities lean towards the subjective side. When evaluating the five key considerations for a decision; cost, service, quality, capability and risk, each personality tends to prioritize two of the five more so than the others.
- Blue = Quality & Service
- Orange = Cost & Service
- Green = Capability & Quality
- Gold = Cost & Risk
Consider the timing for business to close. Gold and Orange personalities are more apt to make a decision in a timely manner. Blue and Green personalities are slower to commit. Adjust your timing expectations, modify your interaction strategy, play to their values, and work within their POV of their buying process – and become the strategic seller.