I have suggested, in earlier posts, use of simple sales stages. Simple means that to limit the number of steps to steps that can be defined and measured. My example for a software company:
- Lead
- Assessment
- Demonstration
- Quote
- Close
- Win
- Lose
Consider this, there may be steps, mini-steps, within each stage. Reference calls, site visits would be or could be checkoffs at the Close stage. These two items, reference checks and site visits, have no value to the seller until previous steps are completed. But I digress.
Now lets get to real value or data that can add value to your sales cycles. Sales cycles, forever long, if shortened will increase sales. Right? If I can move a sales cycle to Win in 60 days vs. 180 days I will produce more sales. (This is dependent on lead generation and I do cover this in posts.) A terrific way to contract sales cycles is to measure the sales cycle duration. If sales cycle duration is measured targeted improvement areas can bubble up. Lets look at our simple sales stages again, this time with duration added.
- Lead 10
- Assessment 4
- Demonstration 7
- Quote 2
- Close 14
- Win 0
- Lose 0
The numbers are days. If a sales lead software routes a lead to a direct or indirect salesperson this lead must be qualifed or dis-qualified within 10 days. The next stage, Assessment, must be done within 4. Using a sales lead system, a leading edge sales software, the lead will turn bright red when the duration is exceeded. The lead record will stay normal text color if the lead/opty is worked within durations.
Using exception reporting, like the color changes when sales stage durations are exceeded, tells the sales manager where bottle necks are with a glance. Having this data can lead to changes. Training to focus on better qualifying perhaps. This training can use best practices which are used by salespeople that are moving sales to close within the durations.
The durations can be tightened using the sales software. Routing and qualifying a lead. or the Lead stage, can be cut down to 3 days, 10 is too much. Now we carved a week out of sales cycle duration. If this stage shows a high increase of RED records. This tell sales management 2 things; either the salesperson is slow, or the duration is to short.
Measure Sales Cycle data and improve.
Next: how to get accurate forecasts using Sales Cycle data.
