How to Calculate Sales Cycle Length in New Zealand

To calculate your sales cycle length in New Zealand, you need to measure the average time it takes to close a sale from the first contact with a potential customer. This involves tracking the date you first engage a lead and the date the deal is either won or lost, then averaging those durations over a set of deals. Knowing your sales cycle length helps you forecast revenue accurately and plan your sales activities effectively.

Why this comes up / what goes wrong

Many small business owners in New Zealand want to improve their sales efficiency but don’t know how long their sales process actually takes. Without this knowledge, it is difficult to plan timely follow-ups, forecast income, or identify where deals stall. Often, sales are managed through informal methods such as text messages, emails and spreadsheets, which makes tracking exact dates challenging. This can lead to missed opportunities, forgotten leads, and inaccurate sales forecasts.

Step-by-step

1. Gather your sales data: Collect records of recent sales deals, including the date of first contact with each lead and the date the sale was closed (either won or lost). Check your emails, texts, or CRM notes to find these dates.
2. Calculate the sales cycle duration for each deal: For each deal, subtract the first contact date from the closing date to find how many days the sales cycle took.
3. Decide on excluding outliers: Very long or very short sales cycles can distort your average. Review your data and decide if you want to exclude deals with unusually long or short durations.
4. Sum all sales cycle durations: Add together the number of days from all the deals you are including.
5. Calculate the average sales cycle length: Divide the total days by the number of deals to get the average sales cycle length in days.
6. Review and update regularly: Repeat this process monthly or quarterly to monitor changes and improve your sales process.

Ensure your data is accurate and complete before calculating. Using a CRM can help automate this tracking and reduce errors.

Example (fictional figures)

A Queenstown tourism operator wants to calculate their sales cycle length for their last 5 bookings. The operator tracks the dates and values of each deal:

Deal	First Contact Date	Closing Date	Days in Sales Cycle	Deal Value (NZ$)
1	01/04/2024	10/04/2024	9	NZ$5,000
2	05/04/2024	15/04/2024	10	NZ$8,000
3	07/04/2024	14/04/2024	7	NZ$4,500
4	10/04/2024	20/04/2024	10	NZ$6,000
5	12/04/2024	18/04/2024	6	NZ$7,000

Calculate total days: 9 + 10 + 7 + 10 + 6 = 42 days

Number of deals: 5

Average sales cycle length: 42 ÷ 5 = 8.4 days

This means on average, it takes 8.4 days from first contact to closing a booking.

Common mistakes

• Not recording exact dates: Without precise first contact and closing dates, your calculations will be inaccurate. Prevent this by entering dates immediately when contact or closure happens.
• Including deals still in progress: Only include deals that have been closed (won or lost). Including open deals will distort your average.
• Ignoring outliers: Extremely long or short sales cycles can skew your average. Review your data carefully and decide if you need to exclude outliers.
• Using inconsistent definitions: Be clear about what counts as "first contact" (e.g., first phone call, email reply) and "closing" (deal signed, payment received) to ensure consistency.
• Relying on manual tracking only: Spreadsheets and notes can lead to errors and forgotten entries. Consider using a CRM tool for better accuracy.
• Not updating regularly: Sales cycle length can change over time. Calculate it regularly to keep your sales insights current.

Doing this in HelloGrowthCRM

HelloGrowthCRM helps New Zealand small businesses track sales cycle length through its Deals (pipeline) feature. Each opportunity is tracked from first contact through stages like 'quote sent' with follow-up dates, so no deal is forgotten. Field sales reps can log visits and activities on the go with Territories and field operations tools, giving managers real-time insights. For founders without a sales manager, Managed RevOps support ensures follow-up queues are worked weekly, keeping your sales process moving. Learn more about HelloGrowthCRM for New Zealand and its WhatsApp and SMS CRM plus the built-in CRM dialer.

Frequently asked questions

How often should I calculate sales cycle length? Calculate sales cycle length monthly or quarterly. This frequency helps you spot trends, measure improvements, and adjust your sales strategy promptly.

What deals should I include when calculating sales cycle length? Only include deals that have been closed, whether won or lost. Exclude deals still in progress to avoid skewing your average.

Can I calculate sales cycle length without a CRM? Yes, by manually tracking first contact and closing dates in a spreadsheet or notebook. However, using a CRM like HelloGrowthCRM automates this process and reduces errors.

Why does my sales cycle length vary so much? Variations can be caused by factors like deal complexity, customer type, or sales rep performance. Understanding these helps you improve forecasting and sales efficiency.

How does sales cycle length affect forecasting? Knowing your average sales cycle length helps predict when deals will close, improving cash flow management and resource planning.

Key takeaways

• Calculate sales cycle length by averaging days from first contact to deal close.
• Use only closed deals and consistent date definitions.
• Record dates accurately to avoid errors.
• Review and update your calculation regularly.
• Consider using HelloGrowthCRM to automate tracking and improve sales management.

Start improving your sales process today. Start on the Free Forever plan (200 leads, no credit card) to track your sales cycle length with HelloGrowthCRM.