Glossary
Sales cycle length
Sales cycle length is the median number of days between a defined starting point, usually qualification, and a deal closing either way. Use the median rather than the average, because one nine-month deal drags an average past anything useful. Write down where the clock starts, since that choice moves the figure more than the sales team does.
01
Why the clock's starting point decides the number
A monthly or quarterly row rather than a weekly one, because the median needs enough closed deals to settle down. The weekly version worth having is a count of deals that have passed their expected cycle length and are still open. That is a short list somebody can work through on a Monday instead of a statistic to admire.
Cycle length sets how far ahead the pipeline has to be filled, so getting it wrong pushes the whole plan out by the same amount. It is also the number that explains a bad quarter caused two quarters earlier. The common distortion is counting only the deals that were won, which hides the ones that took eleven months to say no.
Worked example: A signage manufacturer believed its cycle ran about six weeks. Measured from the first qualified conversation and including losses, the median was ninety-four days. The quarterly plan had been built on the six-week figure, so every quarter started slowly and the team spent March explaining what had happened in January.
Sources: klipfolio.com/kpis/sales; kpi.org/kpi-basics/dashboarding-and-analysis
Pipeline coverage
Pipeline coverage divides open opportunity value by the sales target, so three times coverage means three dollars in play for every dollar needed.
02Win rate
Win rate is deals won divided by deals decided in the same period, counting the wins and the losses and leaving out everything still open.
03Lagging indicator
A lagging indicator reports a result after the period that produced it has closed: revenue, gross margin, employee turnover, satisfaction scores.
04KPI examples by department: sales, ops, finance, HR
Concrete KPI examples for each department in a small company, tagged leading or lagging and weekly or monthly, to help you build a Scorecard that works.
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