4 Tips to Shorten Your Sales Cycle
As the economy continues to take a turn for the worse, it’s no surprise that B2B teams are seeking ways to boost revenue and recession-proof their go-to-market approach. One of the quickest ways to accomplish this is by shortening your sales cycle. As the sales cycle shortens, leads that enter the pipeline turn into closed deals faster, thereby generating more revenue in a shorter time. With 74% of B2B deals taking more than 4 months to close, getting your sales cycle length under that 4-month mark places you ahead of the competition. But how can you accomplish this? Below, we’re sharing the most important factors that influence your sales cycle length and four tips to shorten your sales cycle. Let’s dive in!
What factors influence the sales cycle length?
The length of the sales cycle is influenced by four different factors: the type of product or service, the industry, pricing, and the complexity of the product. How much each of these factors influence the length of your sales cycle is highly dependent on your specific product. In following, we will go through each of these factors and give you an indication on how you can access the health of your sales cycle length before you can learn how to shorten your sales cycle.
1. The type of product or service
In this ongoing recession companies don’t spend money on nice-to-have solutions anymore. Budget cuts are happening continuously, and therefore the type of product is a very important factor for your sales cycle length.
The four indicators influencing the sales cycle length due to the type of product are:
- Urgency to purchase the product
- Size of the buying committee
- Product-market-fit
- Quantifiable business impact
In 2023 companies only invest in products that are a must-have for them to reach their business goals. If buyers perceive a high sense of urgency to purchase your product to achieve their goals, your sales cycle will likely be shorter. There are certain product types for which buyers generally have a higher sense of urgency as for example IT security products and GDPR consent products. Once buyers are in the research phase, the higher the urgency to purchase your product is, the shorter the sales cycle.
To assess the urgency to purchase your product, you can ask yourself:
- What are the main business goals of our target audience?
- How can our product help them achieve that?
- How high is the demand for our product?
- Are there external trends that can influence the perceived urgency to purchase?
The size of your product’s buying committee has a big impact on the sales cycle length. The higher the number of stakeholders and decision-makers involved in the purchase decision is, the longer your sales cycle will be. In addition to the size of the buying committee, it is also important to consider how many decision-makers are part of the buying committee. The number of departments involved in the decision-making process should also be considered. The fewer the departments involved in the purchase decision, the shorter the sales cycle.
To assess the size of your buying committee, you can ask yourself:
- How many buyers from one company are part of the sales process?
- Is this the same number for all company segments?
- How many decision-makers must approve the purchase decision?
- How many and which departments own the budget for the product?
- How many stakeholders from various departments are involved in the purchase decision?
The product-market-fit is in general one of the most important factors that impacts the performance of your business and sales cycle. If you have established fit between your product and the market, you will also have a shorter sales cycle. If, on the other hand, you haven’t established that there is a fit for your product in the market, your sales cycle will be relatively long.
To assess your product-market fit, you can ask yourself:
- Who gains the most value from our product?
- What do they like about our product?
- Is our product better than available options?
- Do our customers need our product to achieve their goals?
The biggest difference between a must-have product and a nice-to-have product is the quantifiable business impact. If you are able to communicate specifically how your product can help your buyers achieve their goals, your sales cycle will be shorter. Buyers will have a clearer expectation of what they can gain from your product and will therefore also be able to decide faster if they should invest in your product.
To assess your quantifiable business impact, you can ask yourself:
- What can our customers achieve with our product that they couldn’t before?
- What specific business impact have our customers achieved with our product?
- How does our product help the different buyer personas?
2. The industry
The industry your product is operating in is an important factor impacting your sales cycle length. Within the industry there are three indicators on how healthy your business performance and sales cycle length are:
- Competitive landscape
- Legal regulations
- Product category
The competitive landscape is a key indicator impacting your sales cycle length as buyers rarely only research one product. This means that you will see longer sales cycles if you are operating in a highly competitive industry. Therefore, it is important for you to be aware of direct competitors including their product features, product range, and pricing. This gives you the option to decide how your product needs to develop to have a higher product-market fit and a shorter sales cycle.
To assess the competitive landscape you are operating in, you can ask yourself:
- How many direct competitors exist?
- How does our product differ from the competitors?
- How much market share do our competitors have?
Based on the industry you are operating in, your product might fall under specific legal regulations or need the approval from the legal department of your buyers. This can cause a longer sales cycle as it can bloat up the negotiation and approval time of the contract once the buyer has already agreed to purchase the product.
To assess the sales cycle length of your product or service it is important to take the product category into consideration. If your product category is growing heavily, you might benefit from this general category growth by having a shorter sales cycle. It is important to note that other product categories can impact your business growth. As buyers have to be rigorous in choosing what products to purchase, other product categories might turn into your competition if you are operating within the same industry. How much impact your product category has on your sales cycle length depends on your specific product.
3. Pricing
In this ongoing recession the cost of your product for the buyer is one of the most important factors influencing your sales cycle length. But it is not only the price itself that impacts the sales cycle, but specifically three factors:
- Pricing split
- Financial risk
- Pricing packages
In 2023 it is more important than ever for businesses to be flexible when it comes to how costs are getting split. If you can offer a more flexible pricing split in which buyers can decide between a monthly or yearly pricing rate you will most likely see a shorter sales cycle.
In addition to assessing how much your product will cost, buyers will also assess what the financial risk of your product is. This financial risk analysis can include:
- How likely is it that we will see a business impact?
- When will we be able to cancel the contract?
- What is the highest possible loss?
- What are external risk factors?
Your product’s pricing packages also impact your sales cycle length and closing rate. Offering different pricing packages gives buyers more flexibility to assess their needs and choose the most important features. If you are offering certain features as add-ons, you enable buyers to purchase the product features that have the highest priority for them. This makes the pricing more customizable and the purchase decision easier for buyers as they can adjust it based on their budget. By offering a higher flexibility with your pricing packages, you will most likely see a shorter sales cycle.
The most important factor in setting a pricing split and pricing packages is that your pricing has to be clear and easy to understand.
4. Product complexity
The complexity of your product can impact your sales cycle length positively or negatively: the less complex your product is, the shorter the sales cycle length. For this purpose, we are breaking down the product complexity into three indicators: the onboarding, the product requirements, and the business impact.
The complexity of the product is reflected in the onboarding process. The more complex your product is, the more complex and long the customers’ onboarding process will be. Complex products need the involvement of more departments and stakeholders for implementation, training, and onboarding purposes. This means that the less complex your product is (or is perceived), the shorter the sales cycle will be.
If your product is rather complex, it also means that buyers might have specific requirements in terms of setup, regulations, or implementation. These will likely bloat up the negotiation time and thereby impact the sales cycle length negatively.
Complex products can be perceived as having a lower business impact as they require a longer implementation and onboarding time. This leads to a lower projected business impact within a short time frame and longer sales cycle.
Now that we have outlined what factors impact the sales cycle, we will dive into four specific tips on how you can shorten your sales cycle.
Tip 1: Focus on high-intent leads
When sellers focus on communicating with leads that show a high level of intent, they have a better chance of closing deals in a shorter time frame. Making sure that sellers devote their resources and time to those who are most interested in your product and how it solves their pain points makes them more efficient. High-intent leads are the ones that are most likely to become customers. Most likely these are buyers that have already engaged with your content and researched your solution.
Finding high-intent leads can be a challenge, which is why we list here a few tactics on how to identify these high-quality leads.
1. Lead scoring
By utilizing a lead scoring model, you can ensure that your team prioritizes the leads that have engaged with certain content assets or had a certain number of touchpoints with your solution.
So, how do you ensure you have a high-quality lead scoring model in place to identify the best-fit leads? The answer lies in sales and marketing alignment. Marketing creates the lead-scoring model, so it’s imperative that they understand what type of buyer the sales team wants to target. If marketing creates a lead-scoring model based on the assumption that sales want to target IT engineers, when sales have most success selling to CTOs, the lead-scoring model won’t accurately reflect the desired market. In this instance, sales will struggle to find their best-fit leads. Fostering sales and marketing alignment allows you to avoid this type of miscommunication and ensures that your team is attracting high-value leads.
To create an effective lead scoring model you should start by analyzing your closed deals. Looking at the leads and accounts that have converted into customers helps you assess what similarities they have and set scores based on these factors. The scores can be assigned based on the most effective channels, engagements, or consent.
2. ICP (Ideal Customer Profile)
Identifying your ideal customer profile is a key driver in aligning your revenue teams and making them more effective. By having a defined ICP every department knows exactly who they must target, reach out to, and prioritize. Your sales cycle will be shorter as you focus your efforts on the profiles that have the highest likelihood of becoming a customer.
3. Buyer Intent Data
While you can use the buyer intent data you collect internally via your marketing automation tool and website, you can also purchase 2nd or 3rd party intent data. Purchasing and implementing buyer intent data can be an impactful tactic to shorten your sales cycle. It is important to consider how you use the buyer intent data to inform your marketing and sales efforts. We have created a guide on how to use and implement buyer intent data to generate more revenue which you can find here.
Tip 2: Improve the sales process
How the sales process is set up and perceived by buyers as they go through it has a big impact on your sales cycle length. While you want to allow your sales team to be flexible in the way they do prospecting and outreach, it is important to set standards and ensure that you are offering a best-in-class sales process for all buyers.
Improving your sales process can be a challenge, which is why we list below a few tactics on how to assess your sales process and find points to improve.
1. Content and Documentation
The modern B2B buyer has high expectations: they expect to learn something new, and even have sellers challenge them. Just offering buyers a great demo won’t impress them, but high-quality content can do just that. Content that addresses key concerns your buyers have or shares knowledges shows your buyers that you are an expert. Additionally, you ensure that buyers don’t have to find the answers themselves elsewhere, which has the power to shorten your sales cycle.
Improving your content can be an effective tactic to shorten the sales cycle as it creates a better sales process for the buyer. Additionally, you might also need to offer other kinds of documentation to improve your sales process on product features, legal requirements, or security standards. This ensures that buyers get the information they need to make an informed decision.
Engaged buyers have more interest in your product, more interest in its value, and more interest in purchasing, which enables them to move through the sales pipeline much more quickly. Not only this, but companies with high B2B buyer engagement experience 63% lower attrition rates. When you engage buyers, you can create long-lasting relationships, shorten your sales cycle, and increase revenue.
To identify how you can improve your content, you can ask yourself:
- Do we have content for every step of the sales process?
- Do we have content for different buyer personas?
- Does our content answer the questions buyers most commonly ask?
- What content do our buyers most engage with?
- What content do sellers share with buyers the most?
If you are not able to analyze content usage data on sellers and buyers, it can be useful to implement a sales content management solution. These kinds of solutions can help you align your sales and marketing function while collecting content usage data and buyer engagement data.
2. Making the business case for your buyer
Your buyer is sold on your product and wants to purchase it – great! But what follows next is that they must make the business case to get the purchase approved internally. Trends show that in 2023 the CFO is one of the biggest stakeholders when it comes to B2B purchases and can make or break the deal. A good start to improving your sales process is to
make the business case for your buyer, so they don’t have to. At this point in the sales process, you have more information about your product, its business impact and how it can help your buyer achieve their goals.
While it might sound like a lot of work to create the business case for your buyer, it doesn’t have to be. The factors that your buyer’s company will look at to assess the investment are:
- A cost benefit analysis
- The time to implementation
- The time to business impact
- The necessity
Using an ROI calculator can be a very easy yet effective way to equip your buyers with a strong business case that they can share with decision-makers. If you are using a dynamic ROI calculator, you can track how and when the buyer engages with your calculator and follow up at the right time. This can shorten your sales cycle by fastening the negotiation and approval time at the buyer’s company.
3. Be customer-centric
Every seller knows the customer is king, but this can be easier said than done. Having to achieve a quota while communicating with a lot of prospects can easily take the focus away from the customer. Therefore, the sales process should be set up to ensure a smooth process for the buyer. The sales process will only be a best-in-class experience for the buyer if they get valuable insights. This should be reflected in every step of the sales process.
To identify if your sales process offers valuable insights for buyers, you can ask yourself:
- What does the buyer get out of this interaction?
- Am I respectful of the buyer’s time?
- Did I address the buyer’s questions?
- Did I align the expectations together with the buyer?
- Do I allow the buyer to set the agenda?
An effective way to ensure that the buyer is an active part of any sales meeting is to use dynamic presentations instead of static PowerPoint slides. For instance, say your seller meets with a buyer to provide a product demo through an interactive presentation. Throughout the meeting, each time the buyer interacts with content, those interactions produce buyer behavioral data, revealing what the buyer viewed and how long they viewed it. After the meeting, your seller can then view all the buyer behavioral data collected throughout the call. This allows them to gain valuable insights into what information the buyer finds most compelling, which they can then use to inform the content they share next.
By giving buyers a great customer experience, you can shorten your sales cycle as you ensure that buyers get the information they need when they need it.
Tip 3: Align your revenue teams
Aligning your sales, marketing, and operation functions is key to grow your business in 2023, and therefore also important for shortening your sales cycle. Many of the tips already shared in this post are also initiatives to align your revenue teams. In this section, we will outline four specific initiatives to align your sales and marketing function.
1. Ensure a smooth lead handover
Marketing and Sales are two key functions that create the sales process and orchestrate the buyer’s journey. Therefore, it is important that the lead handover from the Marketing department to sellers is a smooth process. Setting this handover up effectively means that sellers need to have access to the most important information about the lead to have a valuable buyer interaction. At the same time Marketing needs to ensure that leads are qualified and have proven to have a high intent. This is where your operations department plays an important role. A smooth and effective handover needs to include the right technology to ensure that tasks can be done automatically removing human error and miscommunication.
To identify if your marketing to sales handover is smooth, you can ask yourself:
- Do sellers have all the information they need to engage with buyers?
- Is it easy for sellers to access this information?
- Do sellers know where to find the information they need?
- Does marketing have access to sales data?
- How many manual tasks are involved in the lead handover?
2. Allow your revenue teams to share feedback
It is difficult to improve if you don’t know what is wrong. Therefore, it is important that you set a structure that enables your revenue teams to share feedback. This will allow your revenue teams to get better and push towards a common goal.
Your tech stack can help you in allowing your teams to share feedback. With a sales content management solution for example, your sellers can leave feedback on the content marketing provides them with. Likewise, marketers and sellers can leave comments in the CRM system and marketing automation tool on specific leads to ensure that this data can be analyzed at scale.
3. Analyze customer data
A key part in aligning your revenue teams is to remove subjective opinions from the collaboration and making decisions that are informed by data. Analyzing your customer data is an important factor to identify areas of improvement to shorten your sales cycle. Your tech stack plays a vital role in collecting the data that your revenue teams need to assess and optimize the performance of their initiatives. And as data is an objective measure, your teams will make informed decisions based on the actual performance.
Tip 4: Make your solution a must-have
To shorten your sales cycle in 2023, your product must be a must-have solution for buyers that has a clear impact on their business goals. There are three specific tactics we outline in this section that help position your product as a must-have solution.
1. Increase the sense of urgency to purchase
To shorten sales cycle your buyers need to perceive a high urgency to purchase your product. You can raise the sense of urgency by clearly communicating the business impact of your product for the buyer. In addition to communicating what the buyer can gain from the investment, you can also communicate what they are losing out on. This tactic is especially effective if your claims are based on actual data and real-life examples. For your buyer this data is directly transferable to their own business and enables them to make calculations on the gain versus the loss.
2. Outline the implementation and onboarding time
While it can be difficult to make specific assessments on how long the implementation and onboarding time of a product is for a specific customer, it is a key factor for the buyer to make an informed decision. Often, not sharing these timelines transparently leads to longer sales cycles as buyers are unsure of the expected outcome. Outlining the specific steps required for implementation, onboarding, and ramp-up time creates a better customer experience and makes the expected outcomes quantifiable. Hence, it is difficult for decision-makers to assess if the investment is expected to have a positive on the impact.
Shortening the sales cycle helps you close more deals in less time, instantly boosting revenue. Sales automation, lead scoring, customer-centric engagements, and alignment of your revenue teams all serve to help you shorten your sales cycle — enabling your team to win more deals in less time.
Prezentor’s solutions can help you shorten your sales cycle by enabling your revenue teams to get the insights they need to prioritize the leads with the highest expected outcomes all while letting your marketing team know what works and what doesn’t. Read more about how our solutions can help you win more deals and wow your buyers.