“Time kills all deals” is a mantra that is oft-repeated in the sales world. Sales managers and their sales reps are constantly striving to shorten their sales cycle, for each individual employee as well as for the team as a whole. A key aspect of effective sales cycle management is monitoring your sales cycle and, if it has been steadily increasing for some time, diagnosing why this is happening. Only when you know why your sales cycle is increasing can you figure out how to shorten it again. Here are three possible reasons for why your sales cycle could be increasing.
Larger deal sizes
Every business wants to keep selling larger and more expensive deals – a $10,000 deal is pretty cool, but a $200,000 one is even cooler. As a company grows and scales, it is likely that they will be able to sell more product and more of their product. However, larger opportunities with a higher average sale price not only carry with them a lower win rate (unless you are in the market of selling enterprise products to large enterprises), but also a much longer sales cycle.
Naturally, from the perspective of your prospective buyer, this makes sense. When a company has to spend substantially more money, they are more likely to take their time and ensure that they have all their bases covered. They will want to audit every aspect of the potential deal to make sure it’s a good fit for them. In such scenarios, your reps should be cognizant of the fact that larger opportunities have longer sales cycles and prepare to nurture this opportunity over a longer period of time, rather than panicking when the opportunity takes a longer than average time to close.
Marketing to a new customer persona
For months, you have been directing most of your marketing efforts and nurturing campaigns at Sales VPs. Your reps spend a majority of their time on the phone talking to these individuals, as their primary (and in most cases, only) contact with the opportunity. However, suddenly things are changing and your reps are finding that they are spending more time talking to sales admins and sales operations managers instead of the Sales VP.
Now your reps are finding that they have to not only win over the Sales VP and convince them to close the deal, but first they have to win over the more junior contact with less buying authority. Only then can they gain access to a contact with real purchasing power. This shift in customer persona will create a lag phase that contributes toward a longer sales cycle.
Different subsets of customers
Some companies sell to so many different prospective customers in a variety of different industries that they should all be treated as unique subsets of customers. In these scenarios, it is likely that you always had two (or more) distinct sales cycles that your team had simply combined into one. While having one average sales cycle figure is convenient, in some cases it is simply not accurate.
When you have these types of distinctions at your company, in your sales process and affecting your sales cycle, the key is to be aware of them. Look at your sales cycle from different angles, instead of accepting it at face value. Once you know this information, you can then proceed with a more considered approach. Instead of merely looking at a sales cycle that is substantially greater than what it was 6 months ago and panicking, perhaps you can find real justified reasons for why this is occurring.
A longer sales cycle isn’t necessarily indicative that there is something flawed or broken in your sales process. Sometimes you just have to be aware of what’s going on and adjust your expectations accordingly.