How to shorten the B2B sales cycle
If there is one thing that aggravates the modern B2B company, it is the constantly lengthening sales cycle. Everyone, from CEO to sales VP to sales rep, suffers from this problem and wants to know what to do about it. The future of your company (and its stock price) may depend on getting revenue in the door faster.
What exactly do I mean by the term "sales cycle?" The classic definition is "the total time elapsed from the buyer's first contact with your organization until the sale closes. Of course, the sales cycle time is expressed as an average. For example, if one deal closes in two months and the other in 10 months, the average sales cycle is six months. So why are B2B sales cycles getting longer? Here are some primary reasons:
• Budgets are tighter. In case you haven't noticed, the go-go days of American business are pretty much over.
• Fear of making a bad decision. Corporate expenses are getting scrutinized more carefully so buyers are more cautious.
• Buyers have an increasing number of options. More choices can confuse the buyer and confusion leads to procrastination.
• Lousy marketing and selling. If the message isn't crystal clear and the selling process is out of alignment with the way customers want to buy, the sale will take longer.
If these are the problems, what are the solutions? Here is the Six-Point Fusion Marketing Partners formula for reducing your sales cycle.
1. Make sure that you have a brand promise that is clear and differentiated. Overcome the temptation to make your message very broad because prospects that know exactly what you do, and how it benefits them, buy more quickly.
2. Identify your target audience carefully. Once you have a compelling message, make sure it is aimed at the people or companies likely to need what you are selling. This sounds intuitive but you would be surprised at how many B2B companies can't articulate their target audience.
3. Optimize your website. This strategy is a biggie. Remember that there are two sales cycles. The first is the actual sales cycle, which is the total time it takes the prospect to go through his or her investigation, discovery and purchase process. The second sales cycle is the time the prospect spends in a sales engagement with your organization. I also call this the "effective sales cycle." If your website contains a wealth of valuable information, the prospect can self-educate and self-qualify. Thus, the effective sales cycle is shortened. This is a win/win scenario for your company and the prospect.
4. Create compelling offers. Many B2B websites are little more than online brochures. They may do a good job of explaining what it is that you do, but provide little incentive for the prospect to take action. This is the purpose of the offer - to first drive prospect engagement and then drive prospect action (buying your product or service). A good offer is the fuel that can not only shorten your sales cycle but also turbo charge your entire revenue generating machine.
5. Establish a lead qualification process. If you have a decent amount of inbound inquiries and an average selling price in the thousands, it probably behooves you to institute a lead qualification process. This way, your sales reps receive only the leads that are deemed qualified. The elimination of the time spent on pursuing early stage unqualified inquiries can be an important factor in shrinking the sales cycle.
6. Implement an efficient marketing and sales workflow and measurement system. The old saying that you can't improve something you don't measure certainly applies to B2B marketing and sales. Leads that fall through the cracks either take longer to close or are lost to competitors. Set up a good end-to-end process, monitor your conversion ratios, and reduce your sales cycle.
These six steps are not easy to implement but the rewards are well worth the effort. Each of the steps will have a positive impact by itself, but in combination, the impact will be profound. Shorter sales cycles mean more revenue and more profits. Smart B2B marketers follow proven formulas to shrink the sales cycle and expand sales revenue.