The industrial sales cycle has evolved. The most important reason is that social media and the slow economy have created significant waves in the business world. Regardless of the causes at play, it stands to reason that understanding how sales cycles are changing might support sales and marketing teams in figuring how to shorten them.
What is of industrial sales cycle?
To begin, let us explain the definition of a sales cycle. According to the B2B sales and marketing authorities, the sales cycle is “the period of time between initiating contact with a customer, identifying the services or products to be acquired, agreeing the purchase, and finalizing the sale.”
As one might assume, shorter industrial sales cycles usually result in higher earnings, as more transactions are completed more quickly. On the other hand, longer sales cycles cause decreased cash flow and less-than-stellar revenue performance.
Typical B2B industrial sales cycle
The average B2B sales process of an industrial company is defined by several distinct features – here are a few of the most defining ones.
Building rapport and cultivating relationships are critical components of the regular industrial sales cycle. The approach is more sophisticated and targeted than in B2C sales, where you may be expected to crank out tens of presentations each week.
With industrial sales, you focus exclusively on a single company and communicate with multiple stakeholders within it – engaging in critical dialogues as the deal proceeds. As a long-term player you need to keep putting yourself in front of the proper individuals to make it work.
The most effective strategy is to establish oneself as a valuable asset for your prospective customers. One of the main determinants of the success of an industrial sales process is developing a business relationship with your prospects through education and communication.
As a matter of fact, the average industrial company is far bigger than a small or medium business. This implies they usually have a lot more balls in the air and other considerations to deal with, thus they are more likely to have many more options to consider and, consequently, more decision-makers making those judgments.
One of the reasons that industrial sales is different from selling to consumers is that you have to work with an organization’s extended management structure instead of simply interacting with more than one decision-maker.
A typical purchasing team for a complicated B2B solution consists of six to ten decision-makers, and when completing an industrial sales cycle, there is a good possibility you will contact the majority of them.
Prolonged sales cycle
The usual B2C sales cycle is significantly shorter than the normal industrial sales cycle. The former can last as little as a week but is more commonly around 60 or so days. However, the latter is frequently much longer. Due to the increased number of parties and red tape involved, the average industrial sales cycle for an industrial transaction is typically six to twelve months.
Significant contract value
Again, stating that enterprises are larger than small to medium-sized businesses is neither new nor smart. This means that companies will leverage your product on a far greater scale than their weaker competitors, resulting in larger, more lucrative contracts — contracts that often exceed six or even seven figures.
Higher-Risk Enterprise transactions are more difficult to come by and even more difficult to close. When combined with the other considerations discussed above, scarcity makes the industrial sales cycle more risky than others.
Factors that affect the industrial sales cycle recently
There are conflicting reports regarding the impact of the Covid pandemic on industrial sales cycles. Financial constraints, fear of making poor decisions, and increased options have all led to customers delaying their plans and lengthening sales cycles in a variety of industries.
Social media and user-generated content have significantly altered the industrial sales cycle. Prospects may now access information, ask questions, and learn more about a brand than ever before – often even before they see it, know where to purchase it, or communicate with the organization that sells it.
By the time many leads contact you, they are already on the verge of making a purchase and require fewer marketing resources to finish the deal.
Lead nurturing is more significant nowadays
However, early-stage lead nurturing is as critical as ever for hesitant prospects. If marketers do not devote sufficient time to potential customers throughout the early stages of the industrial sales cycle, opportunity can get lost. A sales expert who establishes rapport with the customer early on is much more likely to close the sales without having to repeat portions – or even the entire – of the process.
Costs of a longer industrial sales cycle
The majority of businesses have a substantial quantity of sales leads that are of little or no value. According to some, the average salesman spends over 50% of their time on missed deals. Opportunities that fail to materialize after extended periods of time actually cost companies money, as a result of the time and effort wasted on what becomes a dead lead.
The underlying cost of extended “failed” industrial sales cycle is misallocation of resources, incorrect sales forecasting, and missed opportunities for sales to move on more promising leads. Successful lead management can assist in determining the best use of these commodities.
Relation between B2B marketing and the industrial sales cycle
Accurately identifying your target market can be really beneficial. After developing a compelling message, your brand should target the businesses most likely to require the product or service offered. While this may seem self-evident, far too many companies under-sell themselves by attempting to promote to all businesses without any targeting.
Clear and focused marketing messages that clearly communicate what your brand is, how it benefits them, and why they should prefer it over the competition will build demand and increase sales.
Attractive offers motivate the customers
Another strategy for shortening your industrial sales cycle is to provide attractive offers that motivate prospects to take immediate action. Such attractive offers initially capture prospects’ attention and then compel them to purchase your goods or service before the time limit expires. Not only can a special offer shorten the sales cycle; it can also boost a business’s whole revenue production system.
Marketing teams have great responsibilities on the industrial sales cycle. Numerous factors might affect the unpredictability of the B2B sales process. Businesses and marketing teams, on the other hand, can improve the quality of their leads and focus on prospects that are most likely to convert.
Industrial sales cycle management
Sales teams that do not manage their B2B sales process well and adhere to a well-defined industrial sales cycle earn a lower income.
According to a survey conducted by marketing researchers, an effective sales process is directly related to corporate success. For example, B2B companies that have mastered an effective industrial sales cycle experienced a 30% increase in revenue growth.
The structure is obvious: strong sales teams optimize their sales processes through sales cycle management. When you have a procedure in place, managing a B2B sales pipeline becomes easier.
Prospecting and proposing are only a part of closing a deal. To succeed, B2B sales representatives must carefully analyze their prospects’ demands, optimize scheduling, and develop more intelligent and targeted proposals.
Your B2B sales strategy frequently determines effective industrial sales cycle management. So not only can sales strategy help you see your sales flow more clearly, but it can also help you save time that can be spent on selling. You’ll be able to close more sales with additional time on your hands. It’s a win-win situation for your sales team as a whole.
Industrial sales cycle management is a critical competence for B2B sales managers as well as sales representatives. Shortening your sales cycle could make it easier for your team to close more deals, make more money, and streamline your sales process.