82% of small businesses fail due to cash flow issues. Cash flow is not just about money coming in and out; it’s also about timing. And business owners know that time is money. Even if you have a proven product, but your sales cycle is taking too long, you might end up experiencing cash flow issues. This is why many entrepreneurs study how to improve their sales cycle speed, looking at each phase of their sales process to check for problems and provide steps for optimization. Their very survival may depend on their ability to decrease the sales cycle length.
In this article, we’ll show how you can boost your sales cycle speed with nine tips.
1. Find out your company’s average sales cycle
Your average sales cycle length is the amount of time from your first contact with a lead to closing a deal, averaging across all won deals. The result tells you how long it takes for your sales team to win a deal. Upon studying the results, many business owners may be tempted to see how well they stack up against their competitors, but this is not advisable.
A sales benchmark study of hundreds of businesses revealed that B2B companies have an average sales cycle length of 102 days. However, the results may vary hugely depending on the source of the opportunity. Besides, factors that are unique for each business, such as geography, product line, and sales strategy, can influence a company’s average sales cycle. Thus, variables can be so different that you won’t get a lot of value or insight in conducting a competitor analysis.
What you can do, instead, is to use your average sales cycle length as a benchmark. This is important because the benchmark serves as your starting point. Your average sales cycle length should decrease over time if the changes that you implement are effective.
2. Identify bottlenecks
Once you get your company’s average sales cycle length, the next step is to drill down further. Look at the average number of days it takes for a lead to move from one sales cycle stage to the next. This should help you zero in on the steps that require immediate attention.
Let’s say your prospects tend to sit the longest in the presentation stage. This is an indication that your sales reps might be struggling to get contacts to commit to a meeting. To address this issue, you can follow these suggestions:
- Send a proposed schedule via email, and send an invite using Google calendar
- If there is no response after 24 hours, cold call the contact
- If the contact fails to respond, immediately send a follow-up email
- If there is no response within 48 hours after the initial message, cold call the contact again
- If there is still no response, leave a voicemail that encourages the contact to reply to your emails or give you a call back as soon as possible.
Having a clear procedure on how to get contacts moving from one sales cycle stage to another should help boost its speed.
Another way to check for bottlenecks is to look at the performance of your sales team. Identify sales reps with an average sales cycle length that’s higher than your company’s average sales cycle length. This is an indication that your sales reps are struggling in one or more areas. If you can identify these stages, you can provide tailored coaching sessions to help improve their performance. By providing support to struggling sales reps, you can put your company in a position to decrease your overall sales cycle length.
3. Determine your key performance indicators
As you analyze your sales cycle and determine bottlenecks, you’ll discover which key performance indicators (KPIs) are the most relevant to your sales process and goals. KPIs help you measure your progress toward an intended result, so think of them as milestones. The more milestones you hit, the higher the chances of you achieving your goals.
Now, if you wish to reduce your sales cycle length, you must identify KPIs that track how long it takes for leads to move from one sales cycle stage to the next. Examples of these KPIs include:
- Lead response time – this is the amount of time between a lead’s inquiry and your sales rep’s response. Reduce lead response time to quickly convert leads into clients.
- Lead by source – this shows where your leads are coming from. Identifying the sources most of your qualified leads are coming from should help you reduce the time spent on qualifying leads.
- Calls or emails per sales rep – this measures the phone or email productivity of your sales reps. Get the average number of calls or emails per sales rep so you can quickly identify those who are underperforming and provide the necessary support.
- Lead to opportunity ratio – this metric tells you the percentage of leads that convert to opportunities. Use this KPI to assess the effectiveness of your lead generation and qualification strategies. The more effective these processes are, the faster your sales cycle.
Determine your KPIs and set a target for each metric. This should give your sales reps a clear idea of what’s expected from them so they can quickly move leads from one sales cycle stage to the next.
4. Pinpoint high-performing channels
As you conduct an in-depth evaluation of your sales cycle, the next element that you can look at is your sales channels. Some companies use inbound sales channels such as search optimized websites and organic social media marketing, while others rely on outbound channels such as cold calling, cold emailing, and outsourcing. You may be leveraging some of these options or perhaps using a combination of inbound and outbound sales channels.
Whatever channels you rely on, you need to evaluate their performance. Channels that fail to produce quality leads should be quickly eliminated from your sales process. They consume time and money without providing an ample return on your investment. On the other hand, you should double-down and invest in the sales channels that reward you with quality leads that have an actual need for your solution. The demand facilitates the conversion and boosts your sales cycle speed.
For example, a web design media agency relies on email marketing, online banner ads, LinkedIn marketing, and paid Facebook advertising to generate and nurture leads. An evaluation of the sales channels reveals that LinkedIn marketing and paid Facebook advertising generates the biggest number of quality leads. The company then abandons its email marketing and online banner ad campaigns and reallocates resources into its two highest-performing platforms.
5. Refine your buyer persona
Revisiting and refining your buyer persona can significantly boost your sales cycle speed. Your demographic-based persona might share many differences with your actual customers. And, chances are, you’ve created your customer persona in the early stages of your business. You had an idea who your customers were, and you used demographics such as age, sex, gender, etc. to identify them.
Now that you’re generating sales, you can update the persona by looking at the qualities of your best buyers. This way, you will gain valuable insights that you can use to optimize your lead generation strategy. Update your buyer persona using these tips:
- Distribute survey forms via email – write to your actual customers and ask them a few questions about themselves and why they prefer your product/service. Offer discounts or prizes to encourage participation.
- Conduct interviews – if you have a brick & mortar store, interview customers and ask why they purchased your product. Inquire about their pain points and what makes them choose your product over your competitors.
- Run focus group studies – get a few of your actual customers in a room. Learn more about their values, attitudes, and pain points to identify your customers’ core problem.
If you update your customer persona, your business will be on its way to not only shorten sales cycle length but also generate more sales.
6. Rank leads
Statistics show that 67% of lost sales are due to the failure of sales reps to properly qualify leads. Consequently, these unqualified leads enter the pipeline and go through all the sales cycle stages. This can have an undesirable effect on the efficiency of your sales team in moving leads from one stage to the next, and your sales cycle speed suffers as a result.
You can easily solve this issue by implementing your lead scoring strategy. It’s a technique that enables sales teams to rank leads based on a predefined set of characteristics. They do this to quickly identify leads who resemble the qualities of their ideal customer. Some of those traits include location, gender, job title, annual income, education, etc. For example, leads from the US earn 10 points. In addition, those who have a college degree or higher gain 15 points, and those with an annual income of over $100,000 earn 20 points. The higher the score, the higher the ranking.
With lead scoring, you can quickly identify leads who are most likely to get to the next stages of the sales process and become your customers. This makes it easy for you to eliminate the issue of having unqualified leads clogging your pipeline and increase your sales cycle speed.
7. Automate repetitive tasks
Another way you can improve your sales cycle is by relying on automation. For example, one time-consuming task that you can easily automate is sending emails. On average, an employee wastes 2.5 hours a day composing and reading emails. By using an email automation tool, you can free up your sales reps to work on the sales process flowchart or more important tasks like closing deals.
Another repetitive task that you can automate is data entry. Even with the technology available, many companies still rely on manual labor to input lead information in the database. This process can take much time, especially if your sales reps process hundreds of leads each month. Leave this mundane task to applications with an auto enrichment feature that captures information such as lead name, company, contact details, and a lot more.
Look for more tasks in your sales process flowchart that you can automate. Use the time you save to perform more complex tasks such as conducting presentations, doing follow-ups, and handling customer objections. This should increase the efficiency of your sales process and speed up your sales cycle. Be sure to ask your sales reps if they have any suggestions on what can be automated. A great opportunity to do this is during your next team meeting.
8. Train sales reps to always set a deadline
At this point, you would have likely optimized all the sales cycle stages. You have identified bottlenecks, invested in the best sales channels, and ranked leads. It’s time to turn your attention to your sales reps.
As they start to pursue promising deals, you should train them to always set deadlines for the sales process. These deadlines are agreements that enable your team to go after leads and try to take them to the next sales process step.
For example, let’s imagine a prospect inquires about your product, and at the end of the conversation, they say, “I’ll think about it.” While it is wise not to push the prospect, what you can do is to propose a specific day when you can follow up on the decision. You can say something like, “That’s okay. I’ll call you after a couple of days to see if you’re still interested.” Other phrases that you can use to set a deadline include:
- “Let’s set up a meeting next week for a demo.”
- “Should you have concerns, let’s reconnect on (date).”
- “We’ll call you on (date) to check on your decision.”
These deadlines allow your sales reps to reach out to leads and get them to move to the next sales process step.
9. Use CRM to manage the sales pipeline
Implementing the tips above may be challenging, but it doesn’t have to be difficult. Help your sales team funnel leads through your pipeline with a CRM. The multi-purpose application has numerous functionalities that can significantly shorten your average sales cycle length, including:
- Custom sales reports – the most powerful CRMs can generate numerous reports on the status of your sales cycle, including average sales cycle length of each sales rep, lead by source, email and phone activity, and a lot more.
- Lead scoring – the best CRMs enable you to rank leads according to the quality of fit and level of engagement. Automatically score leads using built-in fields such as job title, department, email opened, etc.
- Campaign automation – run email campaigns in the background as you perform other tasks. CRMs allow you to create email templates, segment lists, and design custom workflows for your campaigns. Watch your campaigns run automatically as planned.
Boosting your sales cycle speed can take a lot of work, but these nine tips should ensure that your efforts are rewarded.
Do you have other tips for the sales cycle stages improvement? Let us know in the comments.