In sales, the sales cycle is a step-by-step process most salespeople use to guide prospects toward making a purchase.
The cycle you use can vary, but most sales cycles for coaching services include steps like lead generation, pitching an offer to your leads, and closing the deal.
With this in mind, the average cycle length is the estimated time it takes to go through that entire cycle, from the first step (making contact with a sale) to the last step (closing the deal).
How do you figure out your average cycle length? Why should you do it at all?
We’ll answer these questions and explore them in more detail.
Here’s what you need to know for better sales.
Cycle Length: How to Calculate It and Why It Matters
It’s simple to figure out how long your sales take on average. Use the formula below, or use a cycle length calculator.
How to Calculate Cycle Length
What is a cycle length calculation that will help you figure out your average? Use the following equation.
Step one: First, figure out the total time it took to make all your sales, meaning to take a prospect from the first visit to purchasing your coaching service:
- For all of your sales, add up the number of days each one took.
- Start with the first time you made contact with a prospective client, then count how many days went by before you closed the deal.
- Take the length of each sale and add all the days together.
Step two: Next, figure out how long it takes you to make a sale, on average:
- Take the number from step one and divide it by the total number of sales you made.
- This final figure is your average cycle length.
For example, say you made 30 new clients, and each one took 7 days from the first contact to closing. Added up, the total amount of time all your sales took equals 210 days.
Since you made 30 total sales, take 210 divided by 30. The average amount of time it takes you to make a sale is 7 days.
Why Does the Average Length of a Sales Cycle Matter?
Keeping track of your average sale length can help you in many ways. Not only will it help you improve your sales game, it will also give you defined metrics you can use to predict future sales.
Predict When Sales Will Close
First of all, this metric helps you predict your sales figures for the future. You can look at the number of leads you have and figure out exactly when they will turn into deals.
Weed Out Non-Opportunities
More importantly, knowing your average sales cycle duration helps you weed out prospects who are going nowhere.
If a stage of the sales cycle is taking much longer than average, this gives you a good idea that the prospect is dragging their feet and probably won’t close. You can thus cut ties without any remorse and redirect your attention to the prospects who will be worth your while.
Track Your Efficiency and Performance Over Time
Finally, keeping track of your average sales length can help you figure out how efficient you are.
You can compare your client acquisition cycle lengths to averages in your industry or within your company, then work on your performance to try to improve your average.
Tracking how long each stage of the sales cycle takes on average will give you good benchmark numbers to help improve your performance, too. For instance, if it’s taking you longer to qualify leads than it should, you’ll know to focus your energies on sharpening the skills you need for this particular step.
If you keep track of your average and calculate it regularly, you can even compare your performance to previous years and analyze why you’re more efficient (or less efficient).
Map Your Sales Cycle and Get Better Results
Many salespeople boast about using their gut instinct to drive their success. They know when to back away from a prospect and when to keep at it. They win sales because they have an intuition about their potential customers.
For the rest of us that see themselves still as coaches and not as salespeople, we can depend on hard data to track our sales processes, measure them, and quantify our performance.
Hard data like this can show you how efficient you are in a concrete way. This is hugely important in sales because your income relies on your effectiveness at closing the deal.
You will get better at closing over time. Measure and track your progress and skills so you don’t have to leave your success rate up to chance. You’ll become a better, more efficient, and successful coach.