This is a guest post by Radhika Bhangolai, Product Marketing Specialist, Content Strategist, and Freshsales Blog Contributor at Freshworks Inc.
- Get your company’s average sales cycle
- Identify bottlenecks
- Determine your key performance indicators
- Pinpoint high-performing channels
- Refine your buyer persona
- Rank leads
- Automate repetitive tasks
- Train sales reps to always set a deadline
- Use CRM to manage sales pipeline
Business owners know that time is money. As a matter of fact, 82 percent 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. 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 and 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 sale cycle length.
In this article, we’ll show how you can boost your sales cycle speed with these 9 proven tips.
1. Get your company’s average sales cycle
Your average sales cycle length is the amount of time between your first contact with a lead to closing a deal, averaging all won deals. The result tells you how long it takes for your sales team to win a deal. Upon seeing 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 same study said that results vary hugely depending on the source of the opportunity. In addition, factors that are unique for each business such as geography, product line, and sales strategy can influence a company’s average sales cycle. Thus, the variables are so different that you don’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. Use it to know whether the changes that you implement are effective. Your average sales cycle length should decrease over time as you leverage the tips in this article.
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 stage of the sales cycle to the next. This should help you zero in on the stages that require immediate attention.
Let’s say your contacts 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 establish a series of steps to quickly set up a meeting. For example, 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 stage of the sales pipeline to another should help boost the speed of your sales cycle.
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 your sales rep’s performance.
By providing support to struggling sales reps, you 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 the bottlenecks, you’ll be able to 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, 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 stage of the pipeline 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 contacts.
- Lead by source – this shows where your leads are coming from. Identify the sources where most of your qualified leads are coming from. This 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 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 become 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 stage of the pipeline 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 avenues. 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 mediums or perhaps using a combination of inbound and outbound sales channels.
Whatever channels you rely on, it is important that you 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 ample return on your investment.
On the other hand, you should double-down on sales channels that reward you with quality leads. These are the platforms that your ideal customers use. Invest more in these mediums to significantly expand your reach.
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 reveal 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.
Invest in high-performing channels as they give you leads that have an actual need for your solution. The demand facilitates the conversion and boosts your sales cycle speed.
5. Refine your buyer persona
Revisiting and refining your buyer persona can significantly boost your sales cycle speed. That’s because your demographic-based persona likely shares many differences with your actual customers.
Chances are you’ve created your customer persona in the early stages of your business. You had an idea of whom your customers are and you used demographics such as age, sex, gender, etc. to identify them. Now that you’re actually generating sales, you can update the persona by looking at the qualities of your best buyers. This will help you 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 and 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 the entire sales process. 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 own lead scoring strategy. Lead scoring is 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:
- Job title
- Annual income
Now, revisit your customer persona and look for characteristics that you can score for. 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 become your customers. This makes it easy for you to eliminate the issue of having unqualified leads clogging your pipeline. More importantly, the technique increases your sales cycle speed by significantly improving the efficiency of your sales process and your sales team.
7. Automate repetitive tasks
Another way you can improve your sales cycle is by relying on automation. With this technology, you can streamline and automate certain tasks to increase your sales team’s efficiency.
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 automate the email campaigns and free up your sales reps to work on 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 so 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 lead name, company, contact details, and a lot more.
Look for more tasks in your sales process 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.
8. Train sales reps to always set a deadline
At this point, you would have likely optimized every stage of your sales process. 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 your sales reps to always set a deadline. These deadlines are agreements that enable your team to go after leads and try to take them to the next stage of the process. This is a small tip that can pay huge dividends.
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 just 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 give your sales reps the license to reach out to leads and get them to move to the next step of the process. This helps improve your sales cycle speed by minimizing the time spent by leads in each stage.
9. Use CRM to manage sales pipeline
Implementing the tips above may be challenging but it does not 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 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, web pages visited, and many more.
- 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 sales cycle improvement tips? Let us know in the comments.