The end of the month is a good time to reflect on your sales cycle – the amount of time and sequence of phases it takes for a prospect to become a customer – for the past month, quarter or even year. Things are winding down and wrapping up (for the time being) and you should have a decent sample size of data to analyze.
But just how are you supposed to look at and analyze your sales cycle?
Here are some quick tips on how we manage and analyze our sales cycle here at InsightSquared.
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1) Start with a won/loss analysis
Sales analytics are all about understanding what is driving wins so you can repeat those steps and avoid losses. So a natural place to start in your sales cycle analysis is to break it down by wins and losses.
According to this sales cycle report, losing opportunities spend a longer time in the early stages (Qualifying and Present Solution) than winning opportunities. This makes anecdotal sense – opportunities that are more apt to buy know that they like your product already and just need to hash out details – but it’s nice to have the data back it up. This should guide your sales forecasting going forward; if an opportunity in the pipeline has languished in the Present Solution stage for more than 30 days (3x the typical winning opportunity at that same stage) that tells you that it’s not likely to closed-won.
2) Look back in time for your sales cycle history
Of course, every company wants to shorten their sales cycle – this suggests that they are becoming better at finding the right buyers, being more efficient with their sales process and not wasting time working on opportunities that either don’t close or take a long time to do so. The Sales Cycle over Time report is the one report that you hope is heading down-and-to-the-right. If it is the opposite or plateauing, you must take steps to shorten your sales cycle immediately.
3) Drill-down on individual employees
A sales cycle overview of your whole team is interesting, but doesn’t provide you with the sales coaching data points you need. Instead, drill down on individual employees’ sales cycles to figure out who your best reps are at moving opportunities quickly through the funnel and which stages weaker reps are struggling at. In this example, Lauren Bacall needs a lot of work at the Present Solution (aka demo) stage. Design a sales coaching plan that will help her improve in this area, and you should see her overall sales cycle decrease.
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4) Break it down by account / industry
Information is power – the more of it you have, the more likely you are to make the right business decisions. Knowing that certain accounts in specific industries take longer or shorter to sell to will inform you on the right verticals to chase and the nuances of working on different accounts, while giving you a better grain of salt to work with when forecasting on said industries.
For instance, this example suggests that banks and finance houses such as Heckmann Corporation and American Woodmark represent less-complicated sales processes. On the other hand, tech companies such as Skyworks Solutions have a host of considerations to take into account before buying, lengthening their sales cycle. Perhaps you should assign your best reps – ones who are adept at moving opportunities steadily along – to work on tech-based opportunities going forward.
Now that you know how exactly to look at your sales cycle, try out InsightSquared – which breaks down your sales cycle by all the aforementioned pivots and filters – to put these tips into practice today!