Why calculating your sales cycle length important
Selling your product or service requires completing the series of steps or phases that make up your sales cycle. Your sales cycle is the period of time from the identification of a lead until you close the sale. They vary considerably among different types of businesses, products, and services. A well-defined sales cycle can help you streamline your sales process, increase sales velocity, and more accurately forecast close dates and incoming revenue.
- Helps save time and resources: Moreover, tracking sales cycle length provides insights that can be used to optimize the sales process. For example, you might find that certain customers get stuck on specific stages, therefore, elongating the sales cycle. The longer it takes for you to close the deal, the more costly your sales become in terms of time, energy, and resources. Looking at the process of closing deals step by step makes it easier to identify actions that lead to successes or problems. Faster sales mean shorter sales cycles and thus faster paydays.
- Evaluate team performance: A sales cycle helps you stay on top of team performance. It helps you analyze where your team members are working efficiently, and where they are lacking. If the average length of your sales cycle is decreasing month after month, it says that your team is effectively closing their leads in a shorter period of time, which is great news. It’s also advantageous to compare the length of your sales cycle to that of your competitors to gauge how you’re progressing.
- Gives clarity on sales projection: With insight into the length of your sales cycle, aka how long it takes for you to make a sale, you can create sales projections based on your leads. This means you can predict future revenue, which is crucial to business strategy.
A sales cycle is extremely crucial, as it structures your processes so that you always have an overview. A sales cycle is an indicator of the extent to which you have achieved your sales goals and helps you track how many leads are at which level in your sales funnel.
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