Why a Shorter Sales Cycle Isn’t Always a Better Sales Cycle
I recently had occasion to pick up an old copy of Spin Selling, still one of my favorites – which I’d recommend to Sales Management and Sales reps alike. Something caught my attention that I didn’t see the first time around — fast sales cycles are not always the goal. Now, if you’ve been managing your team by providing KPIs around the timing or linearity of deals; your might take pause at a counter-intuitive idea such as this one.
But it stands to reason, doesn’t it?
The reason sales cycles are fast is usually that there are fewer total individuals involved. That includes fewer of your sales team, and fewer unique individuals on the customer end of the engagements. Fewer people involved usually indicates that deals are smaller. That which can be approved by one or two people is usually smaller than that requiring six or eight people.
Would it then be prudent for Sales Management to analyze sales cycles within their organizations and keep trying make them shorter? I don’t expect that this is the right goal. In and of itself, a consistently diminishing sales cycle mean is probably not a good thing. Why? Because it is probably accompanied by a diminishing total average deal size within your sales organization. This could mean your sales reps are selling the solution short, going for the quick win.
How much bigger could the deal be if you allowed them the extra time? There are many variants on this question. Generally speaking, for sales cycles, the goal for sales management needs to be – watching for patterns – determining how long most sales cycles are. And how do sales managers, in this regard, determine how one individual rep compares to the average for the organization, the region or the product?
How do your new reps compare to your existing reps? This is key for sales managers in reorganizing sales teams or in hiring new reps. Most sales organizations will have some rule of thumb about how long it takes for a new rep to “get up to speed.” But this measurement is very likely tribal and anecdotal. To measure sales cycles by rep, by product; would be a great judge of how long it REALLY takes to get up to speed. I’ll bet most sales organizations would be surprised.
Net/net, it is a great idea for sales management to measure sales cycles, especially if you can compare it apples to apples across your organization. The question is why? You can motivate your sales teams, better enable them, and better and gauge pipeline – as a result.