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Video: Startup Sales Process

Michael Scholl startup sales expert on a slide explaining startup sales process vs sales stages

The difference between sales process and sales stages

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Why startups need to know the difference

For startups eager to carve a niche in a competitive landscape, comprehending the distinction between their sales process and sales stages or milestones is imperative. A well-defined sales process offers a blueprint for systematic and consistent conversions, serving as the backbone of a successful sales strategy.

In contrast, sales stages are the individual steps or milestones within this overarching process, providing granularity on the journey from lead generation to a closed deal. Grasping this difference empowers startups to optimize each stage, leading to improved conversion rates, more predictable revenue, and tailored sales strategies.

Furthermore, it lays the groundwork for startups to integrate best practices, measure performance metrics, and ensure they’re on the path to sustainable growth. In essence, mastering the nuances of the sales process and its stages is paramount for startups aiming to build a robust sales pipeline and achieve market leadership.

Sales process definition

The sales process is best conceptualized as a detailed roadmap, outlining the systematic progression of turning a prospect into a customer. While many tend to envision this as a simple sales funnel or a series of stages, a holistic view reveals it to be more akin to a process flow diagram.

This perspective emphasizes not just the major milestones but also the intricate steps, decision points, loops, and potential detours that can occur along the sales journey. For a SaaS company, a basic sales process flow diagram might commence with lead generation, followed by initial outreach.

Depending on the response, the flow might bifurcate into paths like ‘interested’ leading to a product demo, or ‘not interested’ prompting a feedback loop for refining targeting strategies. Post-demo, there could be paths like ‘needs further nurturing’, leading to a sequence of follow-ups, or ‘ready to purchase’, culminating in onboarding and finally, customer success and retention activities. Thus, the sales process is a dynamic, multifaceted ecosystem, offering businesses a granular view of their customer acquisition journey.

Sales stages or milestones

Sales stages, often misconstrued as the sales process, are distinct milestones within the broader sales journey. While the sales process provides an overarching framework detailing how leads transition from awareness to conversion, sales stages are the key checkpoints that mark a prospect’s advancement within this framework.

In essence, the sales process is the “how,” while the sales stages are the “where” in the journey. For a SaaS company, typical sales stages might include:

1) Lead Generation where potential clients are identified

2) Lead Qualification to determine if a lead is a suitable fit

3) Initial Outreach or engagement

4) Product Demonstration where the software’s features and benefits are showcased

5) Negotiation of terms and pricing

6) Closure, marking the confirmation of a sale; and finally

7) Onboarding and Retention to ensure long-term client satisfaction and growth. By distinguishing the sales stages from the entire process, SaaS companies can better pinpoint areas for improvement, tailor their strategies, and drive more efficient conversions

Sales process and identifying your sales bottlenecks

Sales bottlenecks refer to specific points within the sales process where the flow of prospects or deals slows down or stalls, impeding the overall efficiency and effectiveness of the sales journey. By meticulously understanding and mapping out the sales process, businesses can pinpoint these bottlenecks, offering a clearer picture of where and why potential clients are dropping off or taking longer to convert.

Addressing these bottlenecks is critical, as they can significantly impact revenue and growth. For instance, in a SaaS company, a common sales bottleneck might arise during the product demonstration stage.

If a substantial number of potential clients show interest initially but wane after seeing the product demo, it may indicate that the demonstration isn’t effectively showcasing the software’s value, or perhaps it’s too lengthy and loses the prospect’s interest.

By recognizing this bottleneck, the SaaS company can then refine its demonstration strategy, ensuring it’s both compelling and concise, ultimately optimizing the sales process and boosting conversions.

Startups: A roadmap to understanding your sales process

For startups aiming to refine their sales trajectory, the journey begins with introspection. A tactical first step involves meticulously documenting the current sales process from the very inception of a lead to its conversion. This can be done by shadowing sales representatives, recording customer calls, and analyzing existing sales tools and correspondence.

Every touchpoint, follow-up, and communication should be mapped. Once laid out visually, perhaps on a flowchart or a whiteboard, the company can then analyze this map in tandem with conversion data at each stage.

Where are the majority of prospects dropping off?

Which stage consistently takes the longest?

These pain points or slowdowns represent the bottlenecks. Startups should then delve deeper into these bottlenecks, seeking feedback directly from both sales teams and customers.

Perhaps prospects find a certain product demo unclear, or maybe there’s a lack of timely follow-up after an initial inquiry. By adopting this granular, hands-on approach, startups can pinpoint their unique rate-limiting sales issues, offering a focused and actionable path to enhance the efficiency and effectiveness of their sales process.

Contact our fractional sales leadership team to discuss your sales process today.