Stage Duration In The Sales Process
We recently examined the power of stage conversion rates and how they’re an awesome tool for sales managers. In addition to conversion, there’s another very valuable metric when it comes to understanding opportunities’ behavior. I’m talking about opportunity stage duration. Stage duration paints a vivid portrait of the sales process, both for a team and individual reps. It’s another compelling data point that, when used in concert with conversion rates, yields deep insights about performance. Understanding stage duration also helps sales managers forecast smarter.
What Is Stage Duration And How Can It Help?
You’ll recall that conversion rates detail the percentage of opps that move from one stage to the next. Stage duration measures how long, in days, it takes an opportunity to move from one stage to the next. Knowing stage durations, for teams and individual reps, can empower sales managers in several ways:
Create stage duration benchmarks: Use your average stage durations to create benchmarks, and measure reps against the benchmark. We’re talking about averages, so there will always be variances, but reps whose durations for particular stages are consistently longer than average present a discussion point for managers during their one on ones. Winning deals is awesome, but are those wins taking too long? More on this in a bit.
Drill-down into the sales cycle: Most sales managers know, in general, how long it takes for opportunities to move from creation to a closed/won deal. Let’s say the sales cycle for a team averages 90 days. Knowing the number of days each stage contributes to that 90 days shows managers which stage to stage movements take the longest and should be the impetus for a deeper examination of what’s contributing to that duration. Can process improvements be made to expedite things? Focusing your effort on the parts of the process that take the longest is the best way to reduce your overall sales cycle.
Incentivize sales reps in new ways: Sales managers can offer reps the chance to earn bonuses on deals they book if they either 1) beat the average total sales cycle by a certain amount or 2) beat the average duration time between two stages by a certain amount. Winning a deal is awesome, but winning quickly is even better. Reward the reps who “win fast” and see if it has a ripple effect on the rest of the team.
Giving Stage Duration A Seat At The Table
The data informing opportunity stage durations should be easy to access and easy to update regularly, two qualities that make it more likely sales managers will incorporate sales durations into discussions with both their direct reports and their executive team. Stage durations should be part of a sales team’s lexicon, and a clear understanding of them by all key players can help boost performance and create efficiencies.
Rekener’s Sales Rep Scorecard allows managers to easily quantify stage duration and track its evolution over time. By using Rekener’s Funnel feature, managers gain valuable insight into sales cycles and how each stage contributes. These insights allow them to identify sales process challenges, get them thinking about strategies to combat those challenges and keep their teams moving forward.
Rekener's Sales Rep Scorecard app is the fastest and most powerful way to get all your sales analytics done. Rekener helps world-class businesses understand opportunity stage durations and dozens of other sales performance metrics.
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John is a Senior BizOps Strategist at Rekener. Each day, John collaborates with Rekener customers to leverage the Rekener platform and drive deep business insights. A veteran of the technology startup space, John’s love for data storytelling helps sales, marketing, and ops teams see the big picture in a way that’s easily understood and actionable.
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