Posted: December 13, 2010
Quick sales are good, slow ones—not so much
Define your sales cycle for maximum efficiency -- and profitGary Harvey
How do you determine if the time you devote to developing a selling opportunity is a worthwhile investment or a waste? One might think the answer is obvious: if you closed the sale, it was a good investment of time, and if you didn't close the sale, it was a waste of time. On the surface, there is some truth to that line of thinking. But, the length of time to close the sale or close the file on the opportunity is the real yardstick.
Sales that close quickly are good. The shorter the selling cycle, the greater the number of sales that can be completed in any given period of time. More sales, more revenue, and more commission means everybody is happy. Sales that take an excessive amount of time to bring to fruition are not so good: fewer sales, less revenue, and less commission.
The more quickly potential opportunities that will eventually go nowhere can be identified and disqualified (allowing the salesperson to move on to more viable ones), the better. The longer salespeople spend time with tire kickers, the less productive they are. It's not unusual for salespeople to spend more time with prospects who don't buy than with those who do. Why? Working on an opportunity, regardless of how dubious the chances, is more desirable than going through the pain of digging up a new opportunity. And, salespeople don't have a way to quickly qualify ! (or disqualify) the prospect.
So, how can you tell if the prospect who is thinking about, looking into the possibility of, exploring options for, giving careful consideration to, and weighing the alternatives for obtaining the product or service you sell is a real prospect or merely a tire kicker? You must have specific criteria to judge the opportunity.
The criteria should be applied throughout the development process to make "go/no-go" decisions about continuing. Concrete reasons to do business - a pivotal criterion - must be established very early in the cycle. Making persuasive presentations or submitting thoroughly prepared proposals before compelling reasons for the prospect to buy your product or service is another element that must also be determined early in the development cycle.
Time should also be considered. How much time should it take to develop and close an opportunity? Let history be your guide. For instance, if it typically takes 60 days to close a particular class of sale and you're 120 days into the process, you likely went off track.
If you misjudged an opportunity - it has become stalled, dragging on without measurable progress - and you have spent more time than what you determined is appropriate, let it go. Don't continue to hang in just because of the time already invested. If the prospect doesn't measure up, abandon the pursuit and redirect your energy on those opportunities that do. If there is a clear understanding that the circumstances disqualifying the prospect today will change in the future, you can resume your development activity at that time. Disqualified "today" doesn't mean disqualified "forever."
When you have specific criteria to judge an opportunity and you make a commitment to apply and bide by them, you increase your efficiency and the potential for closing more sales more quickly. With practice, you'll learn to minimize the time spent with tire kickers and unqualified prospects, your selling cycle will be shorter and your closing ratio will increase.
Gary Harvey is the founder and president of Achievement Dynamics, LLC, a high performance sales training, coaching and development company for sales professionals, managers and business owners and is the recipient of the David H. Sandler Award, awarded to the top Sandler trainer in the world. His firm is consistently rated by the Sandler Training as one of the top 10 training centers in the World. He can be reached at 303-741-5200, or firstname.lastname@example.org .
© Sandler Systems, Inc. and Achievement Dynamics, LLC All rights reserved.
Gary Harvey is the founder and president of Achievement Dynamics, LLC, a high performance sales training, coaching and development company for sales professionals, managers and business owners. His firm is consistently rated by the Sandler Training as one of the top 10 training centers in the world. He can be reached at 303-741-5200, or email@example.com.