This blog post was originally published by Rekener, now a Brainshark company.
Cohort-based sales cycle measures the average amount of time between when an opportunity or deal is created, and when it is closed won, tracked by the created date of the opportunity.
To calculate cohort-based sales cycle, you first isolate all the deals that you won that were created in a particular period. Then, for each one, you track the number of days between when it was created and when it was closed. You sum up all those days from all the opps, and then divide by the number of opps won.
For example, if you had 50 deals that were won, that were created in Q2, and the total number of days from creation to closed won for all of them combined was 1,000, then your sales cycle would be 1,000 / 50 = 20 days.
To measure cohort-based sales cycle with Salesforce data, you need to run a report of opportunities created in the period you want to measure, which are closed won. Count how many opps that is. Then, for each opp, calculate the number of days between Created Date and Close Date. Sum up that total number of days. Then divide the number of days by number of opps you won.
To measure cohort-based sales cycle with HubSpot CRM data, you need to run a report of deals created in the period you want to measure, which are closed won. Count how many deals that is. Then, for each deal, calculate the number of days between Created Date and Close Date. Sum up that total number of days. Then divide the number of days by number of deals you won.
With sales scorecards, you can automate cohort-based sales cycle calculations, and can break conversion rates down by sales rep, opportunity type, industry, product, or any other dimension. Check out our sales scorecards solution to see how you can calculate cohort-based sales cycle by sales rep automatically.
Looking for more sales metrics know-how? Our comprehensive Sales Metrics Glossary will show you how to calculate 30 critical KPIs using CRM data.