Sales cycle

Cycle length is a planning input, not a score. If the average cycle is ninety days, a quiet month now was set in motion three months ago, and effort spent on new leads today will show as revenue next quarter. It also feeds cash planning, because the money from a deal arrives after the cycle ends and is often a month or more after the contract is signed. Knowing the figure stops a team from reacting to this week's numbers with the wrong fix.

• Record the date each deal enters each stage in the CRM.
• Calculate the average per stage, and per deal size or source, because the average hides large differences.
• Compare a live deal's time in its current stage with the norm. A deal well past it usually has a missing decision-maker or an unanswered objection.
• Use the cycle length when setting quota and pipeline coverage.
• Re-check every quarter. A cycle that slowly lengthens often signals a change in the market or the process.

Every deal has a length. A small online order may close in an hour. A contract with a larger company may take six months. The sales cycle is the average time between the first real contact and the signature. It is best measured per stage as well as end to end: how long deals spend in discovery, how long in proposal, how long waiting for a decision.

The number depends on the price, on how many people must agree and on how hard it is to change from the current solution. A business can have several different cycles, for example one for small customers and another for large ones.

• Averaging won and lost deals together, which blurs the figure.
• Counting from when a lead was created instead of from first real conversation.