24 May 2012 | Phil Brown

The mystery of the shortening sales cycle


Research recently published by Marketing Sherpa revealed that sales cycles in the ICT sector have shortened in the last year. At the same time average deal sizes have reduced.

This begs the obvious question – why? Why do customers appear to be more decisive? Have budgetary approval processes been universally shortened? Have ICT sales people suddenly got better at closing the deal?

Whatever the reason, surely this has to be good news for vendors? Less resource tied up in sales engagements that drag on; less embarrassment for sales managers caused by those deals that refuse to drop.

Shorter sales cycle doesn’t mean more sales
I’m cautious about these conclusions. While it may be possible that more positive economic sentiment in the US may have contributed to faster decisions; that doesn’t square with the face that average deal sizes have got smaller during the same period.

Based on anecdotal evidence from a variety of vendors and service providers, my hunch is that one reason sales cycles are appearing to shorten is that buyers are engaging suppliers much later in the sales process. The purchasing cycle isn’t shorter; sales organisations are just seeing less of it.

With the easy availability of information online and via social forums, customers are navigating the early stages of their investigation themselves, where as in years gone by they might have invited in a few vendors at an early stage to help understand the options and shape their thinking.

Later engagement equals less influence
This has clear dangers for vendors and solution providers’ sales strategies. If the customer has already narrowed down their options and framed their decision criteria before speaking with you, you have less opportunity to influence those criteria in your favour, and also less opportunity to add value to the client through the consultative selling approach that you’ve been struggling to implement forever.

If you offer a new and radically different solution to an existing set of problems then the risks are even greater. By the time you get to engage with a potential client they might have already framed their decision criteria based on the prevailing paradigm, which will make it even more difficult to get your innovative, disruptive product properly considered.

Cutting through
All of this comes back to a theme I’ve mentioned in previous blogs: if you want to cut through the noise and get the opportunity to engage with decision-making cycle, you need more than a product and a value proposition, you need a distinctive and challenging point of view, and content which demonstrates thought leadership in your chosen market.

If you’re perceived to offer new insight and innovative thinking, then you’re far more likely to find the doors of those hard-to-reach decision-makers open to you. If not, then you’re likely to find yourself stuck responding to RFPs that you’ve had no ability to influence, and confined to dealing with low-level managers and procurement professionals, who’ll judge you based on a feature checklist and the extent to which you’re prepared to drop your drawers to get the deal.

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