By Tibor Shanto – firstname.lastname@example.org
Shorter sales cycles are one of those things that come up in many discussions with sales and corporate leaders. When I ask them what specific improvements they would like to see 18 to 24 months out, a shorter cycle is usually one.
While I get it, there is more to the question than many have given serious and productive thought to. First, there is little agreement in and across sales organization as to what constitutes a sales cycle. Some will measure it from their initial attempt to engage with a buyer, some from initial contact, others will measure from the time they are able to get their first next step to close; it’s all over the place. Right off the top what you measure will dictate the length of the cycle; the same sale will be “longer” for the first group than the last. The length of a cycle should not vary based on the eye of the beholder, there should at least in the same organization be agreement of where it begins and ends. While this sounds straight forward, just go and ask three sales people in your organization.
Not saying it is definitive, but for the remainder of this piece, I measure the CONTINUOS cycle from initial hand shake to close. I say continuous because there are many instances where I contact or engage with a potential buyer, but am unable to take things through to the end. The deal either dies mid way, or after an initial meeting the time is not right for one or both of us, etc. Often, a few months later I will reengage with the same buyer and take him through to close. The cycle would be that second round, which was continuous. The rest of the time and effort for me is prospecting and nurturing, not active selling. Semantics, to a degree, and that is why it is important to settle on a definition for your company and then stick to it so you can begin to make improvements.
Once you do settle on the points to measure, you can look at shortening it, there are a number of ways, I did a piece a few years back on “How to Shorten Your Sales Cycle”, and there are other ways you can find from many pundits. While getting to the shortest cycle possible is a worthwhile endeavour, you have to ensure that it is a productive one. Many spend a disproportionate amount of time trying to shorten the cycle, almost making that the objective as opposed to just an element of success, which ultimately is delivering the revenue targets.
There is a point that is optimal, meaning any time and energy spent on further reducing the cycle is wasted, and distracts from the real goal. Yes, there is merit to the thinking that if we can shorten the cycle we can sell more, but the reality is that every sale and seller will find the point where it is the RIGHT length of cycle; a point beyond which it can’t get any shorter without damaging the sales, the state of the pipeline, and your success. Based on what you sell, your strengths and challenges, this could be 12 months, six months or two weeks, but there is that point that constitutes the shortest time in which you can deliver a sale with maximum and consistent results; a point beyond which it does not get better.
It will take a bit of effort at first as it involves two specific routines. First you’ll need to go back and look at the last 20 – 25 deals you did and measure the cycle (as defined above), and then look at the average length. If you sell multiple offerings with different buyers and attributes, you may have to do this for all lines. The idea is not to get too granular, but to have a measure for the typical sale. Second, you will need to start reviewing and analysing all your sales. (You can access a worksheet here) The ones you win, to see where there is commonality and opportunities to shorted, or just to validate that you are still at the right length. Don’t forget to review your losses as well, there could be lessons there as well, not just for length of cycle (maybe you rushed some sales), or there could be realistic adjustments that can turn a loss to a win. Those who tell you to just analyse wins are just setting you up to be blindsided.
Many leaders continue to believe that if you keep at it, you will be able to increase velocity in the sale, this is not always true and is a view which brings a real risk because it is centred around the seller’s need to sell, not on the buyer’s reason for buying. While this may not be important when you are selling to willing and active buyers, those who have done their research, and are shopping (price shopping), and have evaluate you and your product in that light before ever contacting you. But if you are pursuing buyers who are not actively looking, you risk building velocity and leaving the buyer and the sale behind. This may numerically bring down the length of your average cycle, allowing you to pick up some sales faster, but also causes you to lose some potential sales because you rushed the process, coming out behind in the long run as a result.
I don’t want to discourage you from exploring ways to be more productive and time efficient in selling. As new technologies are introduced, as markets evolve, or other factors kick in, there may in fact be an opportunity to achieve gains. But you need to ensure that these gains are attainable and how. There two keys to doing this right, one is the review process discussed above, and the corresponding adjustments that will result. The other is don’t hesitate to experiment, if what you are doing now is not getting you what you want, try something new, beyond the current norm. Even if it does not reduce the cycle, but helps you sell better in other ways, experimenting is a great way to change and improve. Not only the way to sell, but the cycle and the outcome. Experimenting is a better waste of time than time spent shaving one day off a three month cycle.
What’s in Your Pipeline?