Dear SaaStr: Did it Ever Take You a Year Or More to Close a Sale?
Closing enterprise SaaS deals often takes over 18 months due to complex procurement and security processes. This article explores the reality of long sales cycles and how startups can manage them effectively.
Dear SaaStr: Did it Ever Take You a Year Or More to Close a Sale?
Absolutely.
It took us about 18 months to close Google, for example:
- Need identification and discussions with project manager over several months
- About 6 on-site meetings to review need identification and discussion with broader group
- RFP
- Prototype of workflow
- Ensure integrations could be connected to custom apps
- Wait for new feature to ship
- Do 90-day unpaid pilot
- Get through security audit
- Procurement cut deal size by 90%
- Throw up hands
- Sales saves the day, closes deal
That’s 18 months to first revenue. Then, another 18–24 months to scale up the number of seats, grow core deal size, etc.
You’ll get better at this over time, as your brand grows (=trust) and your sales team gets better at enterprise deals.
But there are limits to how much you can shrink sales cycles in six and seven-figure deals.
Most importantly, expect it, especially in Years 1 and 2. You’ll get really frustrated with long sales cycles in the early days, when you are just trying to put points on the board quickly. But later, you’ll see once you have 5, 10, 20+ longer sales cycle deals in the pipeline … they’ll close with regularity, every quarter. Even if any individual deal is a bit … sloooow.
A bit more here
(Note: an updated SaaStr Classic answer)
Source: SaaStr
