Getting to the Root Cause of a Lengthening Sales Cycle

Most sales organizations have a well defined sales cycle, from initial contact to the closing of a deal. However, if you’ve noticed your sales cycle getting longer and longer, it can be hard to understand what’s causing it. Are you not qualifying your leads well enough? Or are your buyers’ budgets are tightening? Is it the new AEs you’ve onboarded who simply aren’t as good at closing late stage deals than their peers? Or are you chasing a greater share of new logos than you had been in the past?

 

With so many potential root causes of a lengthening sales cycle, finding out what’s driving long sales cycles can be a daunting task.

 

What is a sales cycle and how do you measure it?

 

According to the Business Dictionary, a sales cycle is “the course of time between the initial contact being made with a customer, the identification of services or goods to be procured, the acceptance of the intended purchase, and the transaction that completes the sale.”

 

As you might expect, shorter sales cycles generally lead to greater profits. Conversely, long sales cycles tend to reduce your cash flow and impact quota attainment.

 

The ‘normal’ length of a sales cycle varies depending on your industry and product. For instance, if your product is highly complex and specialized or if your buyer tends to be a large organization, then the higher the price point and the greater amount of people involved in the sales process, and the longer your sales cycle. Conversely, low price points, undifferentiated products tend to have more transactional buying processes and shorter sales cycles.

 

Getting to the root cause of a lengthening sales cycles

 

If your company’s sales cycle is getting longer, there may be many root causes. One company,  who provides multi-channel customer service software, had noticed a lengthening of their sales cycle but weren’t quite sure why. Their sales team was comprised of 24 account executives, 18 sales development reps and 13 sales engineers.

 

The company’s Chief Revenue Officer turned to Cien to understand the root cause. As it turns out, the lengthening of their sales cycle was due to a combination of factors. 

 

The first factor Cien identified for them was that their reps were not engaging their prospects sufficiently well enough. Otherwise said, the company had a group of sales development reps whose messages were not compelling enough for their target audience, or not adapted to the communication channel.

 

A second factor was poor stakeholder mapping. Some of their AEs were failing to get the right people involved in their deals, which in this case, were midlevel directors from the IT and finance departments. In certain industries such as telecommunications and finance, more senior contacts at the account needed to be looped in. Cien helped them understand which deals required which departments and seniority levels.  

 

The final factor was poor closing skills. A number of AEs had poor closing skills compared to their peers. Based on Cien’s findings, the sales managers were able to provide more personalized training and coaching. 

 

Put together, these three factors had accounted for $7.6M in lost revenue. As the company addressed the gaps in their team’s selling skills, they were able to realize $4.4M recorded the highest level of quota attainment in the company’s history.

 

Understanding your sales cycle is only the first important step towards improving upon your team’s sales performance. If your sales cycles are getting longer, request Cien’s Free Hidden Revenue Assessment and identify the root cause. 


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