Breaking Down “Lag Time” In The Sales Process

One of the more common myths in the world of enterprise sales is that when sales leadership makes a change or implements a new initiative, results in the form of better close rates, higher win percentages, or improved velocity will immediately follow. Unfortunately, most sales leaders neglect the rule of “lag time.”

Changes passed down from leadership can range from complex technology overhauls to new process improvements like adding a new discovery criteria for early stage prospects to new rules of engagement or re-defined geographies. From huge, enterprise-wide initiatives that impact sales to regular quarterly updates, change is certainly inevitable. However, the biggest fault of sales leaders when it comes to change is being ignorant of how “lag time” will effect when results will actually be realized. We believe sales leaders can adopt several best practices from their marketing counterparts who plan quarters in advance—and benefit from a systems thinking mindset. How can sales leaders adopt such a mindset and positively impact sales at the same time? Let’s take a look.

But First: What Is Sales “Lag Time”?

Think about lag time as the period between when sales leadership makes a change—regardless of how large or small—and when they should expect to start seeing results from the implemented change or initiative.

Many sales leaders have adopted a somewhat reactive mindset when it comes to optimizing the sales process. If a CRM data entry isn’t working, if reps aren’t attaining quota, or if the discovery process isn’t cumulative enough, VPs of Sales tend to make quick, rapid-fire decisions that are by all means critical to the sales organization’s long term success. The expectation, however, is that once change is adopted, the results (whether quantitative or qualitative) will be recognized as early as that quarter.

The Problem With Short Term Planning

Consider the average enterprise deal takes 102 days to move from the warm lead stage to closed won. Also take into account that, according to HBR, the number of people involved in the purchase process has climbed from an average of 5.4 just two years ago to 6.8 today. It’s important to keep in mind that these stakeholders come from a lengthening roster of roles, functions, and geographies, making enterprise sales more complex than ever before. Why do those factors play a role in lag time? Because new initiatives or changes that are rolled out today won’t positively affect business or the sales process for at least a quarter—and in many cases, two.

To put it simply, most sales teams are working hard NOW to move deals to close in Q1 or even Q2 of 2018 (or 3-6 months out, depending on the typical sales cycle length). Many VPs of Sales expect that the scoreboard resets at the beginning of each quarter while in reality, the following quarter is already underway for most sales professionals. The only true way to get ahead of the cycle is to expect laggard results and plan at least one to two quarters in advance.

How to Adopt Systems Thinking

Marketers have systems thinking down to a science—in fact, most demand generation or content marketers geek out about quarterly and even yearly plans. Not only do marketers plan budgets, but they’ve considered the impact of content, how they will activate campaigns and programs, and how each activity will be measured. And, because marketing has become a literal science, most marketing executives will have not one, but two contingency plans in place for when something goes wrong. If the marketing team doesn’t generate as many leads as anticipated? No problem, they simply make a few activation tweaks and double down to impact the following quarter, always working several weeks or months in advance.

This type of systems thinking is extremely valuable in the B2B world where the landscape is constantly changing. Sales professionals know better than anyone else that just because a particular sales tactic or discovery process works well today, doesn’t mean it will continue to perform well into the future. Sales executives can take a clue from their marketing counterparts and adopt a systems thinking mindset. Rather than make changes today to try and impact the sales cycle or sales outcomes tomorrow, it’s critical that they think well in advance.

What are some tactical ways that sales leaders can adopt a systems thinking mindset? Here are just a few to help shift the mindset from reactive to proactive:

• Plan out a conservative timeframe for new sales professionals’ ramp up period
• Calculate the specific level of activity and sales velocity needed by each team member
• Gain access to real-time deal flow data to coach proactively
• Set actual and best case metrics by week, month, and quarter

Sales professionals already possess the most important skills needed in enterprise selling: building relationships and matching the right solution to the problem at hand. As enterprise selling only gets more complex, though, sales professionals need tools that help them not only be more efficient with their time, but more effective. B2B sales organizations can’t afford to waste time by failing to plan accordingly. With thousands of solutions competing for buyers’ time and attention, time is certainly the most valuable asset.

If VPs of Sales adopt a systems thinking mindset and plan accordingly for lag time, they will enjoy a much more productive selling atmosphere—and future revenue growth will be sure to follow.