Selling Cycles and Why You Must Know Them
The selling profession is one where continued success is
typically based on results. A salesperson’s sales revenues are
relatively easy to measure and document. This business function
is often THE most measured job in any company. There is many a
salesperson that has wished and said aloud “Why can’t everyone’s
job results be so easily publicized or effectively tracked?” …
if everyone’s job was “by the numbers”, like a salesperson’s is,
there would be much more professional accountability in the
business world!
That said, a selling professional often believes their
importance to their employer is only as high as his or her next
sale. A salesperson needs to clearly understand the time cycles
associated within their selling process steps. This ultimately
allows for realistic understanding of where their sales numbers
are going to come in at and particularly how much selling
prospecting they must do to reach their expected sales quotas.
For the purpose of this article we will simply break the selling
process into four fundamental steps: prospecting, appointment
setting, presenting and closing. Let us assume completion of all
four components of the selling process average 100 calendar
days. This would be based on a representative number of actual
prior closed selling events.
Not all steps in the selling process take the same amount of
time. For this example, let us assume a relatively complex sale
of a technical product with multi purchase decision makers;
prospecting takes 20 days, first appointment setting takes 10
days, setting up another appoint and presenting takes another 25
days and final purchase decision making or closing takes 45
days. All four of these steps again total 100 calendar days.
Thus, the typical selling cycle is defined, 100 days from
beginning to end, including all the components of same.
Why Know your Selling Cycle?
The most productive means to analyze and understand the selling
cycle that is applicable to your business is from two different
perspectives, the business owner or employer of the salesperson
and the salesperson themselves:
From the Business Owner/ Employer Perspective:
• If you understand the selling cycle of your business you
can most effectively add or subtract selling resources as
required to address the cyclical nature of your business
revenues
• Knowing your average selling cycle can help you determine
how long you will retain a marginal salesperson. If after two
selling cycles their numbers do not meet expectations, either
they need more training or you hired the wrong person.
• For budgeting and cost control, knowing your selling cycle
will allow you to accurately define associated costs of any
one salesperson, added or deleted for any give calendar
timeline.
• If you make a concerted effort to define your average
selling cycle, you can effectively define alternative means,
as measured, to reduce the cycle and associated costs
From the Salesperson Perspective:
• There is only so much time in a given day for execution of
at least four different selling steps, within your selling
cycle, applied to a specified number of potential sales
prospects. Understanding your selling cycle and each of the
cycle’s components time requirements allows for most cost
effective allocation of your time.
• If you have a specific income expectation and clearly
understand what and how many selling behaviors you must
complete to get to that income level, you can best determine
the viability of your sales quota and ultimately that of your
associated income potential.
• Asking and understanding what the average selling cycle of
a company or product line is would be critical to accurately
consider any new sales representation employment opportunity
• Understanding what portion of your selling day must be
allocated to fundamental selling process steps versus non-
selling activities is always paramount to a professional
salesperson. There are non-selling activities; education,
travel, paperwork and golf that must be considered.
You may have heard the sales adage, “Fill the front end of the
pipe and you will make it on the back end”… well, this directly
applies to understanding your selling cycle. Selling is a
numbers game, not only as we have written in determination of
actual job performance, but of finite percentages of closed
orders to prospects approached. Like so many things in business,
if you can measure it, as with selling cycles, you have a chance
to improve it!
About the Author:
Mark Smock is 30+ year veteran of business leadership and is
President of http://www.business-buyer-directory.com, the FIRST
International business buyer directory of its kind. Business
Buyer Directory provides a non-traditional means for proactive
business buyers to locate businesses for sale worldwide that
meet their exact registered purchase criteria.
