Deal time spent in each stage and sales cycle velocity

What’s this and how does it benefit your business?

Cash flow problems are a real thing for small businesses and they’re often caused by a sales cycle that is overly long. Let's pretend you sell SaaS software and have just won your first three customers. Let’s say that your free trial lasts one week and, after the trial, your sales rep schedules a follow-up meeting with the customer to try closing the deal.

• Customer A completes the one-week trial and takes another full week to reply to the rep’s follow-up email. Then, when the rep has finally managed to schedule the follow-up meeting, the client doesn’t show up because of a setback. The meeting gets rescheduled a week later.
• Customer B completes the one-week trial but then doesn’t reply to the follow-up email for 15 days. After the follow-up meeting, however, they immediately purchase the product.
• Customer C immediately replies to the follow-up email but then goes on holiday for 10 days, so the meeting is scheduled about 15 days after completing the free trial.

You can easily see a cash flow problem here. After you find a potential customer and get them to sign up for a free trial, you typically have to wait for more than 15 days before closing the deal and getting the money.

So, how do you shorten the sales cycle and get your money sooner? The first step is… actually knowing how long your sales cycle is ;). Without that info, you can’t solve the problem.

This template lets you track the average time your potential customers spend at every stage of your sales cycle (free trial, replying to the follow-up email, scheduling the meeting, and so on). This way, you can easily see if one or more of the steps are slowing the process too much. 

In the example we did before, it’s clear that the need to schedule a follow-up meeting before closing the deal is slowing up things. You would want to offer your customers the opportunity to purchase the product immediately after the free trial and schedule the meeting only when the customer needs to talk to a rep for specific questions or problems. 

Whatever the problem that’s slowing your cash flow, the answer is monitoring every step of your sales cycle with accurate, real-time data.