Why the sales cycle matters
Your sales cycle is the time it takes to convert a qualified lead into a paying customer. A long sales cycle keeps cash trapped in your pipeline and delays the cash-conversion cycle, which is the period between investing in your business and getting your money back. Different industries have different sales-cycle lengths, but every business can benefit from making the journey from prospect to customer shorter.
Diagnose your current cycle
Start by tracking your sales cycle. Measure how long each stage takes, from initial lead qualification through proposal, negotiation and close. If you don’t measure it, you can’t improve it. During regular review meetings, look for bottlenecks: where do deals stall? Is there a long wait for demos, quotes or approvals?
Strategies to speed up the cycle
- Qualify leads early. Focus on prospects that fit your ideal customer profile. Unqualified leads slow down your sales team and lengthen the cycle.
- Align sales and marketing. Ensure your marketing messages attract the right prospects and that sales teams follow up quickly.
- Automate repetitive tasks. Use CRM tools to automate follow-ups, schedule meetings and send proposals, freeing sales reps to focus on high-value activities.
- Streamline approvals. Simplify internal approval processes so quotes and contracts don’t sit on someone’s desk.
- Shorten demonstrations and trials. Provide prospects with concise, tailored demos so they can quickly understand your value proposition.
Track and celebrate improvements
Shortening the sales cycle is an ongoing process. Continue measuring your sales-cycle length and celebrate incremental improvements. A shorter cycle means cash comes in sooner, which helps fund your growth. In the next step, learn how to speed up your production and inventory cycle to free up even more cash.