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How measuring lag can boost sales
Most businesses have an accurate handle on the length of their sales cycle - the time that elapses between a lead being qualified and the closing of the deal. If your total sales cycle is six months, or three months, or twelve months, what does that mean and what can you change to improve results?
Should you measure anything else, and if you did, what would you change?
The answers lie in the detail - but only a little way in.
Simply reverse the usual logic and think about time from the buyers' perspective and not the seller's. Forget about the stages that you are going through, and think instead about the stages your buyer experiences.
Change the language to gain perspective:
A "qualified lead" becomes "someone who's troubled by a problem in their business"
A "closed deal" becomes "someone who has found a solution from someone they trust".
In between "troubled" and "finding a solution" are many steps for your buyer.
To understand time from the buyer's perspective and improve your sales success, you need to think about what's going on in the head of a buyer at each stage, and what changes (for them) to get to the next.
At the very least, they will need to transit through:
Who do I need to speak to about my problem?
What exactly do I need?
Which options should I explore more fully?
Which option looks best?
How will I gain the support of other stakeholders, and engage them in the buying process?
The length of the sales cycle is actually the sum of the time it takes for them to move through each of the stages in buyer's journey.
Each of these progressions of thought has a certain complexity for the buyer, and therefore takes time.
Each step must be measured, not just the total length of the journey. We call the time it takes to go from one stage to another the "lag".
To speed up the sales process, you must reduce each step - for the buyer, not the seller.
The insights you gain by examining each step will help you improve the process, cut out expensive time-consuming steps, and close the deal more effectively.
To summarise your action steps:
Change the names for each of the stages in your sales forecast with names that represent stages in the buyer's journey from their perspective.
Replace your "sales rules" with forecasting steps based on your discoveries.
Time-stamp your sales forecasts. Few customer relationship management (CRM) systems will give you a "lag report", but many of them time-stamp whenever the status changes, so reports can be run using these time-stamps. And if you run forecasting from a spreadsheet, you can do basic date math to measure the lag between stages. And why would you go to this effort? Because if you don't know what the problem is, how can you fix it?
Salespeople do some pretty ugly things to try to accelerate the sales cycle, with disastrous results. A more surgical response can produce astonishing improvements, with buyers happy to make the faster progression.
What about the buyers who are taking longer than normal to progress? Check them fully, because the odds are they have already leaked.
What about Marketing? Before you consider any changes, you must first know for which stage you seek to reduce the lag - and that's the role of measurement.