The first concern of any salesperson, be it the CEO of a company that is starting or the new salesperson of a mega-corporation, is to bring concrete results, through signed contracts and cash in the box. When we talk about taj residencia , we always defend the predictability of the sales process and one of the most important indicators for you to predict your results is the Sales Cycle, a translation of Sales Cycle.

Sales Cycle: what is it?

The sales cycle is the average time required for a new sale to be made.

Many still have doubts about how to measure the sales cycle itself, especially when it comes to start, where it really starts. In Inbound sales cycles, for example, it starts when a prospect becomes a lead, right? Do not worry! We at Sky Marketing are here to help!

In general, yes. If you have a structured sales process right after converting from prospect to lead, this should be the beginning of your cycle, but many companies don’t take advantage of the lead without creating nutrition flows or other ways to nurture contact and help. carry it through your sales funnel.

In Outbound, the logic must be the same. During the Business Intelligence process, your potential buyer doesn’t even know you exist because you haven’t contacted them. If you start prospecting and he doesn’t respond to your e-mails, how will you know he actually took notice of your proposal?

Therefore, the cycle usually starts after the first two-way interaction, that is, when you prospect and the customer responds positively, creating the opportunity for qualification and nutrition.

How to measure my sales cycle?

The simplest way is through your own CRM. If the tool you’ve hired to manage your sales team doesn’t allow for an analysis of key metrics, I strongly recommend that you review that decision. With the help of CRM the sales team for rudn enclave has been able to sell more plots.

Generally, CRMs at least allow you to export a report in .csv or .xls. From this report, at a minimum, you can filter out more specific metrics. Based on this functionality, my team’s pipeline starts in the Business Intelligence process, thus ensuring visibility over the entire process in one place.

At the end, I have a full sales cycle, from contact research to customer conversion. This time represents an overall running average of the process, but I like to understand the actual sales cycle from the first interaction. For this reason, I have a step in my pipeline that represents precisely this interaction.

The moment it occurs, the deal, or deal, is forwarded to this stage and, from there, it follows its path to the base of the funnel. Through an .xls and simple formulas, I can filter the time from the contact’s first response to the final conversion.

What’s the difference?

When we consider a total sales cycle, including the research and pre-prospecting process, we have a very flexible step in the process that can misrepresent the sales dynamic.

If my Business Intelligence team is very efficient and generates 1000 contacts in just one week, the Prospecting team would take a long time to get in contact with everyone in the ideal way. In that case, smart leads would be stuck in the early stages of my pipeline and my sales cycle analysis would be useless.

However, starting from an analysis of the first interaction, I have the real cycle, where my team actually has contact with the prospect and can use sales techniques to increase conversion, average ticket or decrease nutrition or negotiation time.

The only obstacle here is the number of attempts made in the prospecting process. On average, a prospector does not make more than 5 or 6 attempts, all within a period of 10 to 12 days. So, I always keep this in mind and also calculate the average number of attempts for the first response, which can close a tight sales cycle and generate real predictability.

The Holy Grail: Shortening the Sales Cycle

Just as the Grail was a recurrent goal pursued by all knights, shortening the sales cycle is one of the most common goals for sales teams. Taking into account products with open pricing, zero investment in your team and the need to meet goals, almost everything a commercial manager does throughout the year translates into one or more of the three goals below:

• Increase the average ticket;
• Increase conversion to sales and;
• Shorten the sales cycle.

Compared to the other two, shortening your sales cycle is the most subjective. If you increase your average ticket or conversion, you can see your revenue increasing. Now, by reducing the sales cycle, your gain is in team efficiency.

If your team takes less time to sell, then your revenue impact exists. In a company where the sales cycle drops from 1 month to 15 days, for example, revenue tends to double (other indicators being kept constant). This increase in revenue is directly proportional to the increase in productivity of your team, which starts to generate 2x more value per hour worked.

In addition, another factor in the reduction of your sales cycle is that your negotiation process is less exposed to external factors, such as the entry of new competitors in the market, crises or market insecurities, layoffs in the potential buyer’s team, etc. After all, who has never been close to closing a deal, but has seen their interlocutor get fired or need to contain last-minute expenses? Even more in times of crisis, as we are going…

Main obstacles

However, shortening a sales cycle is not simple. Almost every salesperson or manager who has tried to do this has seen at least one of the problems below happening:

• Vertiginous drops on conversion;
• Decrease in Average Ticket or;
• Churn Increase 

You can impact your average ticket, as long as in a controlled way, to sell faster. This type of movement is recurrent among companies that fear the entry of new competitors and wish to control a larger market share, but this is a defensive movement.

Of course, charging someone without the knowledge or drive necessary to achieve the result will result in an indicator other than the sales cycle being affected.

Conversion drop

Every salesperson with a need to shorten the sales cycle ends up rushing to respond to leads. The only way to rush a negotiation is to omit parts that, under normal conditions, you would consider important, no? Unless your process is really bureaucratic and your team manages to let go of this bureaucracy in a tight moment (which should become a moment of learning and put an end to unnecessary bureaucracy), the tendency is for the connection, creation of rapport, qualification/nutrition and creation of urgency are somehow hindered.

The ultimate impact of this results in fewer sales as you start generating fewer MQLs because your connection is bad. Even interested and qualifying prospects are malnourished/qualified, often with little rapport and little credibility involved in the negotiation. However, some will convert, probably because they were already more qualified beforehand, either through content marketing or surveys that the lead itself performed, out of necessity. These are the ones that would likely convert at a rapid pace regardless of your salesperson’s wishes.

Decrease in Average Ticket

A common tactic when trying to shorten the sales cycle is to generate urgency through discounts. The problem is that this ends up getting out of hand, as the discount needs to be relevant and make real sense for the lead to make a decision in a hurry.

Also, creating urgency is just one of the factors that slow down your sales cycle, so you first need to analyze which step is the longest and measure whether this tactic would have an interesting impact on the total cycle.

Churn Increase

Lastly, if you end up poorly qualifying and nurturing your leads, not properly aligning expectations, and selling away from consultative sales, the tendency is for clear dissatisfaction to emerge within your customer base.

With little time, these customers, who have poorly built rapport, do not see much credibility in the company and are concerned about the few results, since expectations were high, end up leaving.

Churn is affected, your company’s revenue predictability is gone, the Customer Success team is unmotivated, as it can’t do anything to contain the large wave of customers leaving the company… What a scenario, no?

Also, we can remember that, probably, this customer can go to a competitor or, simply, become a detractor.

Start at the beginning

To escape these problems, it’s no use chasing them. If you create the hurricane, you’ll have to run away from it too, so it’s easier not to create it.

Don’t miss the essence of your process. Your sale must follow the bases of Consultative Selling, the GPCT must be a mandatory step of your process and the strategies and tactics must align with the needs of the moment.

First, if you really need or want to shorten your sales cycle, start by understanding which steps take the longest and implement timely corrective actions, so you can measure the impact of each one and fix what goes wrong.

Next week, we’ll be posting a walkthrough for shortening your sales cycle, but until then, you have a challenge: understanding which is the longest step in your sales process and why.