Sales math is easy, and it provides a big picture view needed to make business decisions regarding selling efforts. No accounting degree, debit, or credits required.
As we approach mid-year, the Sales Math for your organization’s average sales cycle length is worth paying attention to.
Understanding your organization’s sales cycle is essential to sales and marketing success. Every product or service sold goes through a process by which a lead or initial customer interaction becomes a sale. This process is the sales cycle, and it’s how businesses both acquire and keep customers.
For some organizations, the sales cycle takes days, for some, weeks, for others months, or even a year or more. It depends on the industry, how many people are involved in the buying process, the complexity of the sale, market conditions, and the efficiency of your sales process.
Pay attention B2B marketing and sales leader friends:
- If your typical sales cycle is six to nine months, statistically, ninety percent of the sales you book in 2021 will either
- A) be won by the end of June or
B) in the sales pipeline by the end of June.
The other ten percent of your 2021 sales will likely be made up of small, non-strategic deals typically from current customers. If your organization does not have a calendar year-end, substitute June for the last month of your second quarter.
The sales cycle sales math is straightforward:
If you are a salesperson that creates an opportunity in July with a ~6–9 month sales cycle, the earliest you could expect to close it would be December or January of the following year (~6 months). Still, more than likely, it would be Q1 of the next year.
If you are a marketer that is investing in lead generation in the second half of the year, most of your Q3 and Q4 marketing efforts probably won’t deliver results until late Q4 and early Q1 2022.
If you are a sales leader attempting to maximize 2021 results, identifying and shepherding the top deals in the June pipeline with a reasonable 2021 close date will deliver the highest return. Everything added to the Pipeline from July onward will impact Q1 and Q2 2022 but will have a limited impact for 2021.
You can apply my example if your sales cycle is longer or shorter than 6–9 months. If you have a one-month sales cycle, substitute my June example for November 2021. If you have a twelve-month sales cycle, replace my June example for January 2021.
Here’s The Bottom Line…
With June fast approaching (can you believe it?), now is the time to look at the sales pipeline and marketing initiatives calendar to prioritize time, effort, and investments that will maximize 2021 results.