Understanding your B2B sales cycle is a very important part of sales planning. The B2B sales cycle can affect far ranging strategy components from sales compensation to cash flow planning. Below are a few things to ask yourself as you work towards understanding your B2B sales cycle.
How will they pay?
A big part of B2B sales is not just selling the benefits of your solution, but also understanding how prospects buy. Probing sales questions are key to understanding how they will pay for the solution. Do they need large capital like funding or can they fit it in as an operating expense? They may have funds available or they may need to build a case to get the funds some time in the future. This will have a big affect on your B2B sales cycle.
How do they evaluate solutions?
All organizations and industries evaluate decisions differently: even organizations in the same industry may evaluate solutions differently. It is important to understand how they make decisions. In some cases they will have a very time consuming and formalized RFP while in other cases the key decision maker can decide to move forward quickly. This can also impact the types of organizations your company targets.
Who is involved in the decision?
According to a recent study, 6.8 people are involved in a B2B purchasing decision. Your initial contact or the business unit leader will likely need to have many other people involved with the decision. The more people involved the longer it will take to make the sale. Fleshing this out as soon as possible will help understand the B2B sales cycle.
Is there a window for decisions or funding?
For some industries there are times for making decisions and times for buying. As an example the Government of Canada has a year end on March 31st. When I worked in sales for Lexmark in Ottawa this meant that 50% to 60% of our yearly quota had to be made in Q1 or we would not make the year. In other industries like K-12 they have more time in the spring and summer for evaluating solutions as the students are not in school.
Understanding these windows for certain verticals is key as if they are missed that can significantly increase the B2B sales cycle.
How does it differ for an inbound lead and outbound sales?
Typically an inbound marketing lead will close faster as they are researching solutions and looking for information. Not all businesses can rely on inbound leads alone: many also use an outbound sales effort. Those inbound leads will close at a higher and faster rate than outbound generated leads.
Make sure you record the information
Every B2B sales organization should use a CRM. You will have many situations where the prospect is not ready to buy. Recording information on timing and how they make decisions is key for future success. New deals or opportunities can be scheduled out in the future months and years. The CRM will not only help you keep track of what you learned, but also help with the planning for future activities.
If you would like to talk about how we can help better understand and shorten your B2B sales cycle please contact me.
