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Are your company's sales cycles growing longer or shorter? Why?
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2 Answers
Our sales cycles are growing shorter due to a number of very intentional decisions:
1. We try to make the product that we sell more valuable every day. It sounds obvious, but a product that provides more value usually results in faster sales cycles.
2. We are making the product easy to buy. A lot of start ups are focused on bringing a consumer type of buying experience to enterprise markets. This works and is something that every company should strive for.
3. We are only hiring people who can sell fast - salespeople who can sell over the phone and who don't over-complicate things in the name of maximizing upfront deal size.
4. We are optimizing deal economics so that customers are incented to buy fast.
5. We strive to create a perception in the mind of the customers that we are easy to work with. This often translates into faster sales cycles.
One final point - if your sales cycles are getting longer right now that's not a good thing. The internet should, at a macro level, make sales cycles shorter.
I understand Scott's view--but have a slightly different view. It may be colored by the clients we work with. In some sense sales cycles are getting longer--sales people are getting engaged earlier than they have traditionally, getting customers to consider ideas, new approaches. The customer may go through a period of nurturing, research, need development--which may have relatively minimal sales invovlement. This may go on for some time. At some point, the customer expresses a readiness to buy. At this point, the sales cycles go very quickly.
I think this is driven by a number of things. One is a conservativism on the part of customers in investing. They are waiting until it is absolutely critical to buy--sometimes almost too late. We see this in our industrial equipment/capital equipment and some of our professional services clients. Their customers will get all their ducks lined up, may make a decision, then wait until the last moment.
I think the new customer buying may require us to be looking at sales cycles differently. We used to measure these cycles from the time we got and qualified a lead. In very complex sales, we see much earlier engagement (creating challenging discussions). We'll also see much later engagement of marketing (no longer tossing a lead over the wall). The marketing and sales cycles become co mingled and inseparable.
One thing we are seeing is the sales person hours/days for each opportunity (as opposed to calendar time) is sharply reducing.
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