Putting Sales Velocity into Action: Sales-Cycle SpeedArticle by Colleen Francis, July 25, 2019
Sales velocity is a powerful metric that every sales leader must know inside out. While it measures how fast you’re making sales and earning revenue, it gives you something even more valuable. You gain an understanding of the relationship between the four key activities that comprise your sales velocity: opportunities, deal size, closing rate and sales-cycle speed.
The first article in this series explained the sales velocity formula: opportunities multiplied by average deal size, multiplied by win rate percentage, divided by sales-cycle length in days. That final element is the crucial denominator in the formula. It influences everything else you do, because the faster you close more business, the fewer number of days it takes to meet and exceed your revenue targets.
Let’s look at the three must-do tactics that help you make positive, lasting improvements to your sales-cycle speed.
Seed the market well.
Our research consistently shows that customers in all markets respond positively when you give them timely, meaningful information that helps them make buying decisions. That’s why you must seed the market with high-value content that you post and share online. This works for prospects and customers alike.
What it does is convert a reader from a cold lead into an almost-warm one, because you become known to them. As a result, you skip the getting-to-know-you stage and begin a business relationship with someone from a foundation of trust. One client of mine implemented this approach using an email campaign consisting of case studies, prospect sheets and ROI statements. They did this by reaching a wide number of people and it boosted the speed with which their sales team was able to close new business.
Respond like clockwork.
If you set a timer on your wristwatch or your phone, you’re never left guessing whether it’s going to do that task reliably. Think of your sales team’s response time to new inbound leads precisely that way. Respond like clockwork. A recent insidesales.com study found that up to 75% of all new sales goes to the one who responds first to an inbound lead. The reason it’s so high is that in today’s marketplace, your customer reaches out to you when they are ready to buy. Not before. And when they’re ready, you have only one shot to be first to respond. So don’t blow it!
Here’s what one client of mine did to ensure clockwork response to new business. They implemented a service agreement between their sales and marketing groups, stating that all leads must be responded to within an hour. The length of time leads took to closed reduced by 40%. If you are concerned that such a dramatic requirement will be met with some resistance rather than enthusiasm take an incremental approach. Start with response within one business day and improve to 4 hours after a week. Measure and continue to improve as your team make progress.
Another valuable activity in this tactic is to have your sales team members block time daily to make those follow-up calls. As James Clear points out in his excellent book Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones, “You do not rise to the level of your goals. You fall to the level of your systems.” So be unfailingly systematic. As a best practice, put this time in your calendar as a set appointment to ensure no one else books a meeting for you to attend. Lastly, ensure you include buffer times between meetings to squeeze in one or two calls, take a break or handle email. That way, they never fall behind.
Ask for the sale.
You’d think this final point ought to be obvious. It’s not. In all the years I have been coaching salespeople, the biggest and most consistent mistake I see is that they don’t ask the customer for the sale. You must integrate the following question into every conversation you have with a customer who is considering your proposal: Are you ready to go forward now? Each time your team isn’t asking that question, they are missing an opportunity to close more business in less time.
Just as important, be sure your sales team is posing that question to someone who has decision-making authority. Getting to yes means nothing unless you’re dealing with someone who understands fully the sense of urgency and value of your product or service, and who can also do something about what needs to happen next.
Throughout this series, I have shown you that sales velocity is about the study of how things are currently in your organization and maps out a matrix of possible futures. Each one involves selling more in less time and generating greater revenue. It means gaining a deeper understanding of the relationship between the four activities that define your sale velocity. Adjustments you make to any of those four factors can produce dramatic, positive outcomes in how your organization performs. Through this kind of understanding, change becomes possible.