Average Sales Cycle (ASC) measures the average time from deal creation to deal close for won deals. Lower values of this metric typically reflect more sales efficiency and pipeline effectiveness.
Tracking this metric allows sales teams to identify bottlenecks and areas for improvement in their sales process. By identifying stages where deals take longer to progress, teams can work to shorten their sales cycle. ASC is useful for forecasting sales and revenue.
Sum of Individual Sales Cycle Lengths / Total # Deals Closed
To calculate the Average Sales Cycle (ASC), add up the lengths of the individual sales cycles for each deal closed in a given period, then divide this total by the number of deals closed. For example, if you closed three deals with sales cycles of 30, 45, and 60 days, your ASC would be (30+45+60) / 3 = 45 days.
To reduce ASC, focus on effectively scoring leads. Prioritising leads that fit your ICP and are more likely to convert can reduce time wasted on unsuitable leads. Try to simplify and streamline the sales process by removing unnecessary steps, automating manual tasks, and making full use of a CRM.
While a shorter sales cycle is generally favourable, it's not always the best indicator of sales health, especially if it leads to rushed sales or poor customer fit. Note that sales cycles vary greatly across different industries and products; what's normal in one area may be unusual in another.