Monday, 7 July 2014

Understanding how long it takes to make a sale

Salespeople often find it difficult to work out how long it is going to take to convert a prospect into a customer. It can be very worthwhile creating a Prospect to Customer Formula (PCF) to help gain a better visibility to the likely time frame.

Start by analysing your sales over a period that provides you with a reasonable statistical sample. (Obviously if you are selling relatively low value product and generating a number of orders on a daily or weekly basis, then your time scale can be relatively short. On the other hand if you are selling high value products, over a long sales cycle, you may need to look back over a number of years).Your objective should be to construct a road map of the key activities that took place in order to win the business. Then map these over the time period it took, from first engagement to receipt of the order. Hopefully you will be able to determine a pattern and in turn probably identify the few activities that took the longest time.

Such an exercise will help you have a far better view of how long a sale is likely to take and thereby help improve your forecasting. At the same time you might be able to flex your selling process to address those activities which always seem to have a built in delay or lag.

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