What is Sales Cycle?
The sales cycle is the complete process from initial contact with a prospect to closing the deal, measured in time (days, weeks, or months). It includes all stages—prospecting, qualification, discovery, demo, proposal, negotiation, and close. Understanding your sales cycle length is essential for forecasting, resource planning, and identifying process improvements.
Why Sales Cycle Matters
Sales cycle length directly impacts your business economics. Shorter cycles mean faster revenue, lower cost of sale, and more deals per rep. Longer cycles tie up resources, increase deal risk, and delay cash flow. Understanding your sales cycle is the foundation for capacity planning—you can't hire the right number of reps or set realistic quotas without knowing how long deals take. Sales cycle analysis also reveals optimization opportunities. If certain stages take disproportionately long, that's where to focus improvement. If certain rep's cycles are shorter, study what they do differently. If certain deal types close faster, prioritize them. Cycle length also affects forecasting. Deals expected to close this quarter that were created yesterday probably won't—unless your cycle is very short. Accurate cycle data makes forecasts believable.
84
average days for B2B SaaS sales cycle
2-3x
longer cycles for enterprise vs SMB
18%
shorter cycles with proper qualification
How Sales Cycle Works
Define cycle start point
Decide when the cycle starts—first touch, first meeting, or opportunity creation. Consistency matters more than the specific choice.
Define cycle end point
The cycle ends at closed-won (or closed-lost for loss analysis). Make sure CRM capture close dates accurately.
Calculate average cycle
Measure the average time from start to close across won deals. Use median in addition to mean to account for outliers.
Segment by relevant factors
Calculate cycles by deal size, segment, source, product line, and rep. Aggregate cycles hide important variation.
Track stage duration
Measure how long deals spend in each stage. Long stage durations indicate process bottlenecks or stalled deals.
Monitor trends
Track cycle length over time. Lengthening cycles may indicate market changes, competitive pressure, or process decay.
Best Practices
Measure cycle by segment—enterprise and SMB have fundamentally different cycles
Track both average and median—outliers can skew averages significantly
Analyze cycle by stage to find bottlenecks
Set stage-specific benchmarks—know how long each stage should take
Flag deals that exceed stage benchmarks for review
Compare cycle length across reps to identify best practices
Use cycle length in forecasting—don't expect deals to close faster than historical patterns
Investigate cycle changes—both increases and decreases have causes worth understanding
Common Mistakes
- • Using one cycle metric for all deal types—small and large deals are different
- • Only tracking won deals—lost deal cycle analysis reveals different insights
- • Not capturing accurate stage dates in CRM—garbage data means garbage analysis
- • Ignoring cycle trends—gradual changes can indicate important shifts
- • Setting quotas without considering cycle length—new reps need ramp time
- • Trying to artificially shorten cycles by rushing—this often backfires
- • Not connecting cycle length to deal quality—fast closes may have higher churn
Related Terms
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