Sales Cycle Length
Date created: Apr 29, 2021 • Last updated: Jul 5, 2021
What is Sales Cycle Length?
Sales Cycle Length is the count of the number of days or months it takes on average to close a deal. This metric can be helpful when creating sales forecasts, measuring sales efficiency, and speaking with investors.Alternate names: Average Sales Cycle Length
Sales Cycle Length Formula
How to calculate Sales Cycle Length
A B2B company estimates that it has closed 10 deals over a total period of 1,240 days. This means that the average sales cycle length for this company is 124 days, or 4 months.
Sales Cycle Length
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What is a good Sales Cycle Length benchmark?
75% of B2B companies take an average of at least 4 months to win a new customer. Additionally, the average SaaS B2B sales cycle length is 83 days, according to a 2020 study by Hubspot.
More about Sales Cycle Length
Sales Cycle Length measures the average amount of time it takes to convert prospective customers to won customers.
Sales cycles are generally longer for complex, enterprise solutions with a higher selling price, when selling to new customers versus to existing customers, and when selling into new markets.
Given where your business sits on this spectrum, a shorter sales cycle is not necessarily better. Instead, you want to understand the various factors at play in your specific sales cycles to determine the standard range for your context. From there you can take steps to optimize each stage.
Tracking this metric is important for setting sales targets and forecasting revenue. Other benefits include having a robust picture of the time, effort, and resources required on average to win each customer.
If your Sales Cycle Length is longer than average, you may need to look into improving your sales processes. Reasons for abnormally long Sales Cycle Length include poorly qualified leads, insufficient sales training, inappropriate sales channels, insufficient sales enablement assets, or a free trial period that is too long.