Sales Cycle Length – What Does Competitive Intelligence Tell You?

In a recent study we conducted for a regional medical plan provider, Primary Intelligence evaluated a large number of recent won and lost sales opportunities. These opportunities represented accounts in which the regional provider had competed directly against a competitor for new business.

The opportunities broke out as 50% wins and 50% losses for our client. However, this is not necessarily representative of the actual win rate for this client. This ratio was created in order to populate predictive analytics algorithms used by Primary Intelligence to help companies increase their win rates.

Outside of the predictive analytics, Primary Intelligence also attempts to glean additional information about the sales cycle. In today’s post, we’ll look at the sales cycle length and determine if anything can be learned.

Primary Intelligence interviewed the decision-makers within the prospects’ companies. The people that talked to Primary Intelligence were those that played a prominent role in the evaluation and decision to purchase from our client or competitor. In every one of these cases, the prospect purchased health care solutions, whether from our client or the competition.

The respondents were asked about the amount of time required to make a decision, from initial needs requirements to contract. In this case, The decision time for respondents selecting Regional Medical’s* plans is very short, with 87.5 percent making their decision to purchase Regional Medical within two months (see chart 6). If the prospect chooses a competitor’s solution, that decision is made within the same time frame 75 percent of the time.

(*Company name changed to provide anonymity)

A couple of lessons can be learned:

1- For this client, get out of most every opportunity that lasts longer than 3 months. Very few opportunities are won after 3 months.
2- Sales management should watch the sales rep’s pipelines. If the sales rep is holding on to opportunities too long, they are not working the most productive leads.
3- On average, the longer the opportunity lasts, the higher the likelihood that the competition will win.

The chart presented above shows a very short sales cycle. Many of our clients in various industries are more likely to see data over a 6 month or 12 month sales cycle (or even longer in some cases).

The actual sales cycle length is irrelevant. The fact is that you need to know the sweet spots of your sales cycle timeline. There is no guarantee that all prospects will behave like the peaks and valleys in the chart above, but it is important to note when decisions are made and where you should push harder and when you should pull back.

If sales is a numbers game (and it is), learning to maximize the odds in your favor is one of the most efficient ways of making your sales efforts more effective.

If you need a view into this kind of data, let me know. I can help. (cdalley@primary-intel.com, 801-838-9600 x5050)