We all know that time is money, and that’s especially true for small businesses. As a matter of fact, 82 percent fail due to cash flow issues. Keep in mind: cash flow is not just about money coming in and out. It’s also about timing. Even if you have a proven product, with too long a sales cycle you might end up experiencing cash flow concerns.
This is why many sales organizations focus on improving their sales cycle speed. They look 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 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 company to closing a deal, averaging all won deals. The result tells you how long it takes for your sales team to win a deal on average. Upon seeing the results, many Sales Managers 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 deal. 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 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 deal to move from one stage of the sales cycle to the next. This should help you zero in on stages that require immediate attention.
Let’s say your prospects tend to sit the longest in the introduction stage. This is an indication that your sales reps might be struggling to get prospects 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 prospect.
- If the prospect fails to respond, immediately send a follow-up email.
- If there is no response within 48 hours after the initial message, cold call them again.
- If there is still no response, leave a voicemail that encourages the prospect to reply to your emails, or give you a call back as soon as possible
Having a clear procedure on how to get deals 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 look at bottlenecks, you’ll be able to discover certain key performance indicators (KPIs) that are relevant to your sales process and goals. In a nutshell, 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 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 an inbound lead’s inquiry and your sales rep’s response. Reduce lead response time to quickly convert leads into booked meetings.
- Prospects by source - this shows where your prospects are coming from. Identify the sources where most of your sales cycle is the shortest, and focus on generating more deals from that source.
- Activity 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.
- Meeting booking hit rate - this metric tells you the percentage of activities that leads to booked meetings. Use this KPI to assess the effectiveness of your prospecting strategies and meeting booking tactics. 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 deals 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 cases 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 are performing well. 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 most number of quality leads. The company then abandons its email marketing and online banner ad campaigns and reallocated resources into its two highest performing platforms.
Invest in high-performing channels as they generate prospects 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’d have created your customer persona in the early stages of your business. You had an idea of whom your customers are and you used firmographics such as industry, size and location etc. to identify them. Now that you’re actually generating sales, you can update the persona by looking at the qualities of your prospects. This will help you gain valuable insights that you can use to optimize your sales strategy.
Update your buyer persona with 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.
- Run focus group studies - get a few of your actual customers inside a room and learn more about their values, attitudes, and pain points to identify your customer’s core problem.
- Analyze your customer base - upload a list of your existing customers into a dynamic company database such as Vainu, and break down the characteristics of purchasing companies at a deeper level than just firmographics.
If you can 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 and accounts
Statistics show that 67% of lost sales are due to the failure of sales reps to properly vet prospects. Consequently, these unqualified prospects enter the pipeline and go through the entire sales process. This can have an undesirable impact on the efficiency of your sales team to move leads from one stage to the next. In the end, your sales cycle speed suffers as a result.
- You can easily solve this issue by implementing your own lead and account scoring strategy. Lead scoring is a technique that enables sales teams to rank contacts based on a predefined set of characteristics, while account scoring does the same for companies. They do this to quickly identify targets who resemble the qualities of their ideal customer.
Now, revisit your customer persona and look for characteristics that you can score for. For example, accounts from the US earn 10 points. In addition, those who are in a Marketing role gain 15 points, and C-level executives gain 20 points.The higher the score, the higher the ranking.
With lead and account scoring, you can quickly identify targets who are likely to be your customers. This makes it easy for you to eliminate the issue of having poor-quality prospects 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 prospect information into 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 you 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, a prospect inquires about your product and at the end of the conversation, the person says “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 move deals 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, prospect by source, sales activity, and a lot more.
- Lead and account scoring - the best CRMs enable you to score leads and accounts according to the quality of fit and level of engagement. Automatically score prospects using built-in fields such as job title, department, email opened, web pages visited, and many more.
- Campaign automation - run email campaigns on 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.