To understand the sales process, it is necessary to discuss the length of a sales cycle.
Some sales cycles last only days after initial contact. Some last minutes.
The average sales cycle, however, is measured in weeks and months. The gating factors in determining the time in which a sales cycle is completed are investment, risk, and sales competencies. These factors must be considered when constructing sales forecasts and planning your selling activity.
Let’s dive deep into the topic of the sales cycle and see how sales reps can increase their efficiency by reducing the time between initial contact and close.
Investment and risk are issues that increase the length of the sales cycle and that concern both the customer and seller.
If the investment and risk of a decision are low to the customer and to their company, customers will tend have a short sales cycle. If the investment and risk are high, they will tend to have a longer sales cycle, since more people and departments are usually involved in the purchase. However, risk and investment are not joined at the hip. If risk is high and the investment is low, there will still be a long sales cycle, and this is also true when the investment is high and the risk low. Most companies balance investment and risk decisions all the time as well to determine if the reward of the sales is worth the time risk investment.
Sales competencies are on the sales side only. Sales competencies are something the sales reps and sales organization have control over: by improving selling competencies, companies can attract their target market, affect the desired outcome, increase their revenue, and shorten their average sales cycle length.
The an average company’s sales cycle length is usually twice as long as it needs to be. If an average sales cycle is typically three to four months in your organization, the sales rep should be able to eliminate 50 percent of this time. How can you be sure of this?
- Good sales teams are already doing this.
- With control of the sales process, the delays and slips go away.
- Since you are in control, the competition is at a disadvantage and is marching to your time schedule. (You know this to be true since you have been on the other side of this phenomenon.)
- Transfer of ownership has been completed and is anchored to your solution.
- The buyer has seen the value and knows it is costing them a lot by delaying.
The sales team usually stretches out the deal. Instead of saying to the customer, “Let’s get together tomorrow,” they say, “Let’s get together next week,” for example, usually doubling the amount of time needed between steps of the sale. Salespeople don’t want to appear pushy, so they lengthen the time between meetings. They don’t want rejection so they give the customer all the time in the world before the purchase time.
In contrast, most customers want a shorter sales cycle, but are slowing up the process because of the salesperson.
Salespeople take twice the time they need to make a sale resulting in a long sales cycle.
When the salesperson delays meeting times, they lose momentum. Even though most customers want to speed up sales cycles, the sales rep delays the purchase time due to common objections, including feeling safe that they will close a deal.For obvious reasons, this problem needs to be addressed.
The Law of 2X says salespeople should always halve the time period they usually wait to present the next step. This technique will shorten the average sales cycle length of a business.
There are only two ways to reduce the average sales cycle time: shorten the length of a sales call, or eliminate number of days in between sales calls or sales touches. Obviously the latter is more beneficial.
Sales managers can also shorten their average sales cycle length by increasing sales competencies that control the process. You need to control the average length of the sales process tactically and then update and implement your sales strategy. It is these tactics that you will be using within the sales process that will help you close deals faster.
You follow a process because it’s all about direction. The customer is progressing through a process, and you can choose to lead, follow, or get out of the way. Buyers need direction throughout the sales cycle. You can provide this direction and add value to their process, especially at the higher levels within a company.
If you have confidence in the process and the ability to lead and provide direction, customers will follow you. Then, you will be in charge of the length of your average sales cycle. Without a process, existing customers are left to their own devices despite the face that they want to be led through a process. It is vital to make sure your entire process mirrors the customer’s process, so it will feel very natural for the customer, while, at the same time, reducing the average length of your sales cycle.
Mastering the sales process will produce shorter sales cycles, provide you with control when working with prospective customers, and give you direction throughout the sales process prior to the purchase time.
Learning and practicing sales processes will result in a higher total number of closed deals and more revenue and resources for the business—all while shortening the sales cycle length and improving your ability to sell.
About the author
Skip Miller is President of M3 Learning, a ProActive Sales Management and Sales Training Company based in the heart of Silicon Valley.