The Five Essential Building Blocks of the Sales Process

Many organizations treat sales as a random activity — no clear follow-up process, poor prioritization, and little consideration of data. 

Without a clear sales process in place, sales teams struggle to prioritize leads, follow up with potential customers, and close deals effectively. This results in a haphazard approach driven by ad-hoc decision-making rather than a consistent and replicable strategy. 

To streamline your sales workflow, you must understand sales strategy building blocks and how they work. Keep reading to learn about integrating these building blocks into your sales process. 

1. Qualification criteria

Qualification criteria describe your ideal customer and what makes them sales-ready. 

Defining your qualification criteria requires moving beyond industry, role, and job title to where a prospect actually is in the buying process — initial research, budgeted project, or no interest. Focus on the questions they are asking and what prompts them to take the next step until they make a decision. 

Be stingy with your sales time and focus on those prospects who are ready for sales engagement. The percentage of targets in active buying mode at any one time is in the single digits, so apply some scrutiny to how you are spending your sales time and have a well-defined marketing nurture process to keep the conversation going with those not ready to buy.

2. Deal stages

A deal stage describes the status of a potential sale or deal. Generally, there are seven possible stages: 

1. Prospecting: Identifying potential customers or leads who may be interested in the product or service.

1. Qualification: Assessing the lead’s needs, budget, authority, and timeline to determine whether they are a good fit for the company’s product or service.
2. Needs Analysis: Conducting a thorough analysis of the customer’s requirements to determine how the company’s product or service can address those needs.
3. Proposal: Presenting a formal proposal that outlines the product or service offering, including pricing, features, and benefits.
4. Negotiation: Negotiating the terms of the deal, such as pricing, payment terms, and delivery schedule.
5. Closing: Finalizing the sale by obtaining a signed contract or agreement.
6. Follow-Up: Conducting post-sale follow-up to ensure customer satisfaction and identify opportunities for additional sales.

Here, focus on identifying those who have not had sales touch yet (lead) to those having active conversations (working with) to varying degrees of forecasted to close (qualified, negotiation). Again, less is more here, so start with the basics and build the discipline that certain deal stages signal the likelihood of close (i.e., negotiation equals 70% or greater probability). This forms the basis of a forecasted sales pipeline giving you a view forward of business performance.

3. Desired end-state

This goes hand in hand with the deal stages above. Each customer interaction should have a defined purpose and desired end state. At the very early stages, it may be a further qualification. At more advanced stages, it may be getting a commitment to purchase if a certain set of requirements are met. 

Because sales processes can span many interactions over weeks or months, instilling the discipline of achieving a desired end-state at each interaction will keep the sales process focused and team aligned around actionable outcomes.

4. Actual-to-plan

The plan reveals core assumptions and is a way to drive the business forward. It will also surface key areas of revenue contribution per sales representative, the lead volume required, and dynamics of the business, like average deal size and its impact on the total number of customers required. 

Here’s a simple way to develop one for your business: 

1. Select a time period for the analysis, such as a quarter or a year.
2. Collect actual sales data for the time period, including total sales revenue, the number of sales made, and the average sale price.
3. Compare the actual sales data to the sales plan or budget for the same time period. This can be done using a spreadsheet or other analytical tools.
4. Identify and analyze any differences between the actual and planned sales data. This can help you understand areas where you exceeded expectations, met expectations, or fell short.
5. Determine the reasons for any positive or negative variances. This may include factors such as changes in the market, changes in customer behavior, or changes in the competitive landscape.
6. Develop a plan to address any negative variances and capitalize on any positive variances. This may include adjusting sales strategies, investing in new sales initiatives, or modifying the sales plan or budget.

Regularly repeat the actual-to-plan analysis to monitor progress and make ongoing adjustments to your sales strategy.

5. Conversion Rate

Track your conversion rates between each deal stage to know your rate of progress through the sales process. It will also help you discover weak links in your sales process that need to be fixed. 

The sales conversion rate is calculated by dividing the number of customers who made a purchase or completed the desired action by the total number of potential customers or leads and multiplying by 100.

For example, if a sales team contacted 100 potential customers and 20 of them made a purchase, the conversion rate would be 20% (20/100 x 100).

If the number of leads is very large, but the percentage that converts to qualified is low, you may have a lead quality issue, stringent qualification criteria, or a sales training issue. 

Get behind the numbers by looking at conversion rates between deal stages. If opportunities get to the forecasted stage but fail to close, are they being placed there prematurely, or are you losing due to a gap in product or service?

How to integrate the building blocks into your sales process 

The sales building blocks should form the foundation of your strategy. Here are some ways to use them: 

• Define your qualification criteria at the earliest stage of your process.
• Spell out deal stages and desired end-states simultaneously
• Use conversion rate data to inform your action-to-plan

Once you’ve figured these out, you can use Pipeline CRM to track all your deals and customer relationships. 

Learn more about Pipeline CRM’s features.