We’ve been researching and studying and analyzing the sales process and methodology for a long time. Back in 1999, our CRM was called MODE and consisted of three modules: FIND for marketing; TASC for sales; and CARE for after-sales support and service. TASC was an acronym for Territory, Account, Sales cycle, and Contact, and it incorporated the ASPEC technology, although it wasn’t called ASPEC then.
It was, as I said, 1999, and CRM was in its infancy, not really understood as a software tool by most businesses. We wrote a series of ten vignettes illustrating various situations where CRM would solve some business problem and published them as the TASC 10. They are still relevant today, and sixteen years later, here is Number 1 – You have no idea how much time is left on the game clock.
“TASC makes sure that you keep the sales cycle in mind at all times. As soon as an opportunity is identified, TASC prompts you for an estimate of how long the sale will take. The computer then measures your progress as you inch towards the finish line.”
A well-known sales trainer recently stated that most of the sales people who attended his first class did not even know what the sales cycle was.
The sales cycle is an easy concept to handle. For every product or service there is a “natural” time that will elapse from the time that the customer decides that he or she will buy something, until the time they make a final decision on what to buy and who to buy from. The natural cycle is like the game clock in a football match – you have to plan and execute strategies within this time frame. While obeying the clock will improve your chances of winning the sale, not paying attention to how much time is left will likely result in defeat.
Although there is a natural sales cycle, there will always be a “spread” of exceptions – some will be longer than normal and others will be shorter. The sales cycle tends be shorter when the customer expresses a sense of urgency. The signal for this might be: “my color copier just blew up after ten years of operation and my business will not survive without a replacement – I have to buy now!” By contrast, a long sales cycle might occur when funds are difficult to get, or when the customer’s needs are low.
Due to the range of possibilities, the sales person should always try to ascertain what the sales cycle is for the current sales opportunity that they are working on. In some cases, it will be significantly different than what they’ve experienced in the past.
Figuring out when the sales cycle starts is a little easier (although not much) than predicting when it will end. Clues from the customer are statements such as: “Please send me literature, I’m going to ask Management for funds to buy something like this.” A less obvious indication might be: “I don’t know if this is the way to go – I think I will find out what other companies are doing before proceeding.” Be careful about this sort of statement from the customer – it looks as if this may not turn out to be a sales opportunity (with an associated sales cycle), but should be recorded as a long-term lead for future follow-up (more on this process in future bulletins).
Once you’ve established the start of the sales cycle, it’s important to predict when the sale will end (i.e. when the customer will award the order). This sort of prognostication requires some foresight; you may have to guess six or eight months into the future. Not only is it important to determine the length of the sales cycle when it is about to start, it is important to continually update the time remaining as the cycle progresses – too often this is forgotten, and the sales person risks losing track of when business is going to come to fruition.
TASC requires you to always enter the expected date that the sale will conclude at the point that you first enter the opportunity. The sales cycle is calculated from the date of entry to the date of conclusion. It is important to recognize that the “actual” sales cycle, the one the sales person sees, may be different than the “customer’s” sales cycle. The customer’s sales cycle is the full duration between the time the customer became interested and the expected date a buying decision will be made. Since your sale cycle only commences when you become aware of the customer’s intention to buy (they may have made this determination months before you came onto the scene), your sales cycle length may be shorter than the customer’s sales cycle. For example, if the customer waited two months before contacting you about a product with a six-month sales cycle, the “actual” sales cycle will be six months, and the customer’s sales cycle would be eight months. Please see the diagram for a graphical representation of this concept.
The average sales cycle is taken by averaging the sales cycle for a given product over sufficient time to get good statistics. The average sales cycle corresponds to the natural sales cycle referenced earlier, and is useful for the sales organization to be aware of – TASC stores the average sales cycle for each product for reference by the sales person.
Why does the sales automation need to know the sales cycle length? The most obvious answer is for accurate forecasting – any company worth its salt is forecasting at least out to three months and some go further. But as mentioned earlier it’s easy for the sales person to lose track of his opportunities if he is not sure of where he is at in the sale. TASC is able to provide much added functionality and usefulness if the sales cycle length is updated and accurate.