How to Determine the Length of Your Sales Cycle
Companies spend significant time and money acquiring leads. What’s your process for converting those leads into sales? Knowing how long your sales cycle is simplifies the sales process for your leaders, sales professionals, and customers—and ultimately makes it easier for people to buy from you.
Today’s customers use the internet and social media to learn about the companies that they do business with. Your buyers are engaged with you before you even know it! That means it’s more important than ever to develop a strategic sales process that lays out specific lead conversion metrics and clarifies expectations for development and growth.
What your sales cycle can help you achieve:
- Sales forecasting
- Performance measurement
- Needs assessment
- Allocations of resources
- Barrier identification
To figure out the length of your sales cycle, look at the stages in your process. Most CRMs have various stages to choose from. There are also reports to summarize each individual stage which identify where the potential customers are in the process. Begin measuring from when the leads were received.
Ask yourself these questions:
- Does your organization have an expectation set for when leads need to be acted upon?
- How long does it take your sales team to contact leads?
- Do your sales teams have easy access to lead information?
- Are your leads being managed and monitored for maximum results?
Once the leads are contacted by Sales and the buyers are engaged, the prospective buyer is now moving through the sales process. The decision makers are identified and the needs that your product or service will address are determined. At this point the buyer will need to make a decision.
Once the decision is made, look at when you received the lead. What was the length of time from when you received the lead to the agreement of services and payment was made? That is the length of your sales cycle.
Now that the length of your sales cycle has been determined, look at where in the sales cycle the most prospects/buyers are getting stuck and failing to move forward in the process. You can see where the barriers are in your sales cycle and can then develop a strategy to remove them.
Take a look at your individual salespeople and identify where the majority of their prospects are getting stuck. CRM reports can show where prospects are in the sales cycle and the length of time the prospect has been lingering in a stage. The information from these sales reports need to be shared with salespeople and used as a coaching tool by sales leaders. This enables them to understand where the barriers are in the sales process, identify solutions to remove barriers, and create more sales.