Your sales cycle is the average number of days it takes for your sales team to take a deal from first contact, to close. It follows your sales process and sales funnel, but it put more emphasis on tracking the time a prospect spends in each stage rather than the number of prospects in each stage. Tracking this makes it easier to forecast sales and it makes it possible to know where to work on shortening the cycle.
The shorter your sales cycle, the more clients a rep will be able to secure in a given timeframe. Just like making improvements to your sales funnel conversion rates, improvements to your sales cycle have a multiplier effect throughout the sales team. This also helps with pipeline management and filling.
An Example Sales Cycle
Below is an example of a visualized sales cycle. This kind of visualization lets managers quickly see how long prospects are spending in each stage of the funnel. This is basically a sales funnel that we’ve turned on its side and then elongated the areas between stages with respect to the average time a prospect takes to move from one to another.
In this example, it’s clear that the time between Follow Up and Close is where they should focus. This is followed by the Lead – Contacted and the Qualified – Presentation transitions.
Quickly Locate Quality Opportunities
By measuring your sales cycle, you’ll be able to spot quality prospects faster. This is because you’ll know how long past closed deals have stayed in each stage. If a prospect is moving more quickly then stay on them! If they’re lagging in one or a few stages, then reevaluate the time you spend nurturing them.
The Next Level
After you have your sales cycle calculated and visualized for your average customer, the fun begins. You can now create them by product line, by type of prospect, by sales channel, by lead source, by ANYTHING! This is yet another way of monitoring and managing your sales process.