Average Sales Cycle Length
What is Average Sales Cycle Length?
The sales metric Average Sales Cycle Length is the amount of time from your first touch with a prospect to closing the deal, averaged across all won deals.
How to calculate Average Sales Cycle Length:
Add (#) of days from first contact to customer conversion for all deals = Total (#) of days for all sales combined
Total (#) of days for all sales combined / (#) of deals = (#) of days for Average Sales Cycle
Below are a couple examples of how you might visualize Average Sales Cycle Length on your sales KPI dashboard.
Average Sales Length helps introduce predictability into your sales forecasting. Using this sales metric, if you get a certain number of leads, you’ll know what your sales figures may look like a few days, weeks or months down the line. Also, if you set a KPI to reduce your Average Sales Cycle Length then you can accelerate revenue growth, a tactic often used for high growth companies.
Generally, your sales cycle length will be shorter if you’re selling to SMBs and longer if you’re selling to enterprises. It’s worth noting that a product which requires customization can take longer to sell vs an off-the-shelf package which will tend to be shorter. Similarly, the source of the lead tends to impact the length of the sales cycle length.
For example, outbound methods (e.g. cold calling lead lists and email marketing cold lead lists) tend to have a longer sales cycle length because the customer doesn’t have much purchase intent at the point of engagement compared to inbound leads via a website or referral. With all this in mind, you may want to segment the average sales cycle length by lead source, prospect size and the product you’re selling to ensure you have an accurate picture of what to expect. This will also help you find opportunities to reduce the sales cycle length.
Relevant Sales Metrics and KPIs:
If you’re adding Average Sales Cycle Length to your sales KPI dashboard, you might want to also consider tracking these related sales metrics for context.
Industry Benchmarks and Examples
Implisit analysed the pipelines of hundreds of companies and found the average length from Lead to Opportunity (otherwise known as Marketing Qualified Lead (MQL) to Sales Qualified Lead (SQL))was 84 days and the average length from Opportunity to Close (otherwise known as Sales Qualified Lead (SQL) to Deal) was 18 days. So the average Lead to Close length is 102 days. However, this varies hugely based on what the source of the opportunity was.
|B2B Companies||Benchmark for Sales Cycle Length|
|Average Lead to Opportunity Length||84 days|
|Average Opportunity to Close Length||18 days|
|Average Sales Cycle Length||102 days|
Average Sales Cycle Length is a good sales metric to use in conjunction with Average Handle Time (AHT). AHT is the total amount of time a sales rep spends on a lead throughout the sales cycle. This includes call time, research time, issue resolution, emails, meetings, etc.
When Average Sales Cycle Length is compared to Average Handle Time, you’re able to determine how many sales reps you need based on your current or forecasted number of leads.