SPANCO is an abbreviation of 6 stages of a typical sales cycle which usually occurs during every sales process. This framework was given to the sales community by Xerox. Even though the stages of Sales Cycle in each industry would differ but the basic framework for most of the sales process would typically fit within SPANCO, with minor differences in the case of businesses dealing with specialised products & related consulting.
SPANCO stands for: S - Suspect P - Prospect A - Approach N - Negotiate C - Close O - OrderLet's go through each stage in detail...
In this stage, a list of leads are idenfied who are suspected to be potential customers. But at this stage of Sales Cycle, it is not confirmed whether they are interested to buy the product offered by the Salesperson or not. It is just a list of leads which has been gathered from multiple sources like Directories, Mail Opt-in lists, Networking platforms, Referrals, etc
During this stage, a few prospects are identified out of the huge list of Suspects. These prospects are the potential customers who express their interest during the previous Suspecting stage. For. E.g. Consider that you are selling Softwares to a B2B firm. You have been cold calling every lead you had during Suspecting Stage. Let us suppose, out of 100 calls made, 20 leads were found to be interested and would like to meet further. Then those 20 leads are said to be your Prospects.
During this stage, you go on to meet the clients identified during the Prospecting stage. This meeting can happen either Virtually using phone & video calls or Physically by meeting in person. In this stage, the sales person tries to identify the client's requirements, analyse them, perform lead qualification and based on that, tries to present a solution from their offerings. This happens over several days with multiple meetings each for Need Identification, Sales Presentations, etc
This is one of the most crucial stage of the sales cycle since this can either make or break sales deal. This stage would decide whether the client would buy from you or not. This stage involves negotiation with the clients on the pricing aspect of the deal and its associated terms & conditions. During this stage, you should demonstrate the value of your product to be more than what the customer is going to pay. This is usually done using many techniques like "Balance Sheet Comparison method" for comparing the pricing with respect to your competitor; "TCO" method, wherein you tend to explain the Total Cost of Ownership of your product over a given time period to the client and explain how it would benefit more than the cost he would pay at present.
At this point of sales cycle, the Client would agree to the terms & conditions of the deal or contract. The Deal would be considered to be "Close", when the customer would sign on the contract and would complete all the necessary formalities for issuing a purchase order to you.
This is the last stage of the sales cycle, wherein the Client would issue the purchase order and Order fulfilment is done. Once a Purchase Order (PO) is issued, the salesperson has to hand over the PO to the concerned Operations Department or Fulfilment or Delivery Team which would carry it forward. The client's responsibility is transferred to the Delivery Team. This marks the end of the sales cycle for that particular deal.
Moreover, this does not ends here. Successful Sales teams go beyond these stages and maintain a better customer relationship even after the "Order" stage of the sales process. Maintaining a long term relationship with the client equips the sales team with Upsell and Cross-sell opportunity, thus increasing the Customer Life Time Value (CLTV) of that particular client. This is extremely important considering the fact that: Acquiring a New Client is 10x times more expensive than Retaining them