Sales Cycle VS Sales Funnel

Introduction

People in the business world can get confused about the differences between the sales cycle and the sales funnel processes.

Both involve getting in front of a prospect, showing them your offer, and closing them.

Although many people use the terms interchangeably, it’s important to know the distinction because each process requires different analytics. Understanding this can help you identify what needs improvement within your business.

Sales Cycle

A sales cycle follows a framework where you have to meet 8 objectives:

This framework is carried out by the sales team researching leads and having conversations with them. Sales cycles are great for improving your sales conversions because you’re engaging with each individual person from the beginning, providing them with a truly personalized solution. However, this approach does take longer to reach a significant number of people.

Sales Funnel

A sales funnel follows a framework that can have 4 steps within it:

The sales funnel is created by the marketing team and is completed by the customers. This framework is best for acquiring a large number of customers in a short amount of time because it involves reaching many people through marketing efforts with minimal follow-up work. However, it requires either a financial investment or a large and reliable flow of traffic from a consistent source.

Which Should You Do?

If you can’t afford an advertising budget or don’t have a large following, a sales funnel isn’t for you. Furthermore, if you don’t have a compelling reason proof of trust from a third party (such as being featured in well-known business content, demonstrating customer results, or showcasing customer reviews), then you definitely shouldn’t pursue a sales funnel. In this case, you should take the time to go through the sales cycle only.

If you have an advertising budget or a large following, a reason for people to trust you, and a product or service priced under $100, then you can proceed with the sales funnel process.

If you have an advertising budget or a large following, a reason for people to trust you, and a product or service priced over $100, you can use a sales funnel to advertise something that requires lead information or payment. Afterward, you can upsell your higher-priced product or service or get prospects on a call to start the sales cycle at the “Needs Analysis” stage. This approach works because many people prefer to take a smaller risk before committing to a larger one, which can be facilitated through effective marketing.