Why Short Sales Cycles are Overrated

Why Short Sales Cycles are Overrated:from Wide Angle by Shelley West
If you type “shorten the sales cycle” into Google you get over 200,000 hits with tips and tricks to get customers to close faster.  The advice ranges from making your value proposition more compelling to better targeting potential buyers to using the latest technology to cyber-stalk your prospects.  Each of these things is generally a good idea and I won’t argue against any of them (but be careful on the stalking, no matter what the context, people don’t like to feel like companies are spying on them).  But I will argue that a shorter sales cycle actually shouldn’t be your goal.  I realize this may cause your sales metric dashboard to implode, so let me explain.
There is nothing inherently wrong with a quick close.  But the way customers buy has changed so drastically in the last few years that a short sales cycle can be one of the signs that you are capturing the wrong kind of demand.  More on the different kinds of demand in a bit – first let’s examine how the purchase process has changed.
We know that customers are doing a ton of research on their own, and that most of what they are looking at doesn’t come from you.  In fact, a new study of over 500 B2B customers conducted by the MLC earlier this year found that only 47% of the information a customer consumes during his or her purchase research actually comes from suppliers (and to really bring the doom and gloom, that 47% accounts for all suppliers, not just you – so if the average customer is researching three or four suppliers for a given purchase, that means your individual mindshare is more like 10-15%).  And we know from last year’s study that customers are, on average, 57% of the way through the purchase process before seriously engaging Sales.  That means they are making a whole lot of decisions with only minimal influence from your commercial team – they are scoping their problem, setting their purchase criteria, determining performance thresholds, and comparing suppliers.
At this point there is very little left for the supplier to influence.  Customers show up with their orders in hand.  They know what they want to buy, how much they need, and what they are willing to pay for it.  To the average sales rep, this might actually seem great (“Awesome! Sold another 10 units and all I had to do was take a few phone calls and offer a little discount.  From contact to close in 2 weeks!”).  But in this scenario, Sales has become the fulfillment department.  While the sales cycle feels short, which seems like a win, the rep has done nothing but filled established demand – and almost always at a discount.
Instead, what the best commercial teams know (and I say “commercial teams” instead of “reps” because to do this right it takes both Marketing and Sales), is that they should be working to develop emerging demand.  That is, customers who haven’t yet fully baked their needs, specs, and price expectations.  These are the customers who are more open to change and more willing to consider alternatives including your suggestions for why the problem they think are trying to solve might not be the whole story.  And they are not as hung up on price because you are able to teach them why what you are offering is a necessary and unique solution to their challenges.  The kicker is, one of the keys to developing emerging demand is getting in early and doing the work to shape and change customers’ understanding of the challenges they are facing and the solutions to those challenges.  Not surprisingly, this usually leads to a longer sales cycle.
So while shorter sales cycles sound good in theory (and often get your core-performing reps a nice bonus), they might be a sign that you are settling for sub-optimal, discount-driven deals.