Understanding Your Sales Process Stages
One of the most important aspects of running your business is understanding your sales process stages. It is critical to know how existing customers view your product or service, as well as what attracts prospects to keep leads flowing through the funnel. It is also crucial to have an inherent sense of these concepts when looking to borrow capital.
What Is A Sales Process?
A sales process, or pipeline, describes how potential customers move from a prospect to a purchaser of your product or service. It helps you understand what potential customers are thinking and doing at each stage of the process. Knowing these details will allow you to convert more prospects into customers—proof of which is a substantial factor in securing a loan.
Stage 1: Awareness
The first of the sales process stages is called the awareness level, because it’s where people become aware of your product or service. They may hear about you from your advertising, social media, or even word of mouth.
Your ability to successfully cultivate interest in your product or service is paramount, because it will determine whether the potential customer will learn more about your business or move on to a different option, i.e., a competitor.
Stage 2: Interest
Once prospects have learned about your business, they will start to consider factors such as cost, reputability, and satisfaction ratings. At this stage, you need to have evidence to support why your product or service is the best choice for the customer.
Stage 3: Decision
The most crucial point of the sales process is when the customer makes their decision. This is also where your lender will want to know details about how often you convert prospects into actual customers. By reviewing items such as your balance sheet, profit and loss statement, and cash flow figures, a lender can determine the proper loan structure and be in a better position to gauge whether your business will remain productive and viable enough to pay back the loan.
Stage 4: Action
As the final step of the sales process, your conversion ratio of prospects to existing (and repeat) customers is critical to maintain. As soon as the conversion occurs, you need to ensure that you and your staff have the ability to consistently provide a high-quality product or service. If the potential customer decides not to convert, you can still take steps to provide more information or connect with them to see what issues or concerns they may have.
At the end of the day, a lender is going to always try to put their customer in a position to succeed. While there are many other factors that go into the loan process (such as economic trends, interest rate risks, labor shortages, or cost of materials), understanding your sales process stages and how best to convert your prospects into actual customers can have a substantial impact on your ability to secure a loan.
For more information on securing a loan for your business, please visit the Loans and Financing section.