Two companies close the same revenue. One gets paid 60 days sooner. That gap is worth measuring.
Company A has a 30-day sales cycle. Company B has a 90-day cycle. Both close $1M a year, and Company A has the money 60 days earlier.
On $1M that is roughly $167K of working capital sitting in Company A's account rather than a customer's. It can be reinvested, or it can pay for a hire. Company B is waiting.
What deal velocity is
How fast a deal moves through your pipeline, from first contact to close, measured in days. An average cycle of 60 days means a velocity of 60.
Speed pays in several places at once.
- Cash arrives sooner
- Growth needs less working capital behind it
- Buyers notice a company that moves
- Quick wins keep a team's morale up
- Shorter cycles make a forecast more accurate
Measuring it by stage
Track the average days a deal sits in each stage. A typical picture looks like this.
- Prospecting to qualified: 5 days
- Qualified to demo: 7 days
- Demo to proposal: 10 days
- Proposal to negotiation: 14 days
- Negotiation to close: 7 days
- Total: 43 days
The bottleneck is obvious once it is written down. Proposal to negotiation at 14 days is where the time goes.
Then split closed deals by how long they took. You often see something like this: 40 deals closed in under 30 days at an average of $50K; 30 deals closed in 30 to 60 days at $60K; 20 deals took 60+ days and averaged $40K.
The slow deals are worth less and close less often. Speed tends to travel with quality.
Making deals move faster
Qualify quickly. Spending 2 weeks deciding whether someone is a fit is 2 weeks of your cycle. Set a rule: a qualification call within 48 hours of the lead arriving, held within 2 to 3 days, or you do not pursue it.
Run a 30-minute demo rather than a 1-hour one, from a standard template, scheduled within 5 days of qualifying. Improvising costs time you never get back.
Send the proposal the day after they ask. If a prospect asks on day X, it goes out on day X+1. Wait a week and the momentum is gone. Templates and a pricing calculator are what make that possible.
Put a date on the negotiation. Telling a buyer you need a decision by Friday, after which the pricing changes, creates urgency without pressure. If they will not decide, move on.
Then remove the friction, which is almost always scheduling, approvals and paperwork.
- Scheduling: a booking link rather than email back and forth
- Approvals: one approver rather than a chain
- Contracts: pre-approved standard terms rather than custom every time
- Signature: e-sign rather than paper
Ask about timing during qualification. Someone thinking about it sometime next year is not worth 3 months of pursuit. Someone deciding by quarter end tells you exactly when to push.
The warning signs
Your cycle is lengthening. Month 1 averaged 45 days and month 3 averaged 65. That may mean smaller, less urgent deals, or a team that is struggling. Either way, find out.
One rep closes in 30 days and another takes 70. The slow one may need coaching, or may be carrying the complex deals. Context decides which.
Deals stall in one stage. Proposals normally reach negotiation in 10 days and are now taking 20. That points at pricing, at fit, or at a customer who has gone quiet.
You sit well off your industry benchmark. If the norm is 60 days and you are at 120, that is the number you will be asked to explain.
Fast deals and good customers
Faster deals often bring better customers. Someone who buys quickly was already convinced of the problem, has the budget and the authority, and is more likely to use what they bought.
A slow deal often means the reverse: they are exploring rather than buying, they are price-sensitive, they cannot get internal agreement, or they were a poor fit from the start.
Some genuinely complex deals take time, and that is fine. A deal at 120 days still deserves an honest look at whether it is worth the next month.
Written by the team at Ambivo, a business platform that keeps CRM, accounting and ERP on one customer record. This article is general guidance on the topic rather than a description of Ambivo features.