Why a sales cycle matter for B2B SaaS companies

A shorter sales cycle not only translates to revenue growth, but also provides greater customer satisfaction (it’s a 2-way street - prospects want a quick walk around, on their terms). To make things even more complex, according to Gartner, sales professionals typically have access to only 5% of a customer's time throughout the B2B buying process. The remaining 95% of the journey occurs behind closed doors, in what is often referred to as the ‘dark funnel’. Therefore, shortening the sales cycle becomes extremely challenging for most organisations. 

However, companies that do focus on reducing the buying journey can better predict the future and react accordingly. By streamlining the sales process and minimising unnecessary delays, businesses can accelerate the time it takes to close deals.

To get a better understanding of the time frame for closing B2B deals, here are some interesting statistics:

• HubSpot research shows that the average SaaS sales cycle is 84 days, regardless of annual contract value (ACV). 
• A significant majority of B2B sales to new customers, 74.6%, take at least four months to close. In fact, nearly half of these sales (46.4%) take seven months or longer. This highlights the importance of patience and persistence in B2B sales.
• 60% of deals with existing customers close within three months, and a quarter close in less than a month (e.g. renewals) 
• A study conducted by Forrester Research found that partner-generated leads can close up to 30% faster than leads generated through other channels. This is due in part to the fact that partners are often more motivated to close deals as they can earn commissions.

While these strategies sound promising, you might be wondering how to implement them and transform your sales processes. Come along and keep reading as we explore specific tactics for shortening the sales cycle, focusing on areas such as lead generation, qualification, and sales enablement. Additionally, we will discuss how PRM software can help you streamline operations and minimise the time spent on closing deals.

‍

What is the typical sales cycle for B2B SaaS companies?

The sales cycle can vary significantly based on several factors. Annual Contract Value (ACV) plays a significant role, with deals under $5,000 typically closing more quickly (around 40 days) compared to larger deals exceeding $100,000, which can take up to 170 days or more (source: HubSpot).

Additionally, product complexity can influence the sales cycle, as more intricate products require in-depth demonstrations and evaluations. Potential buyers must understand the product's intricacies, assess its suitability, and often secure approval from multiple stakeholders. To address this, businesses should implement effective strategies like comprehensive product demos, tailored solutions, and strong relationships with key decision-makers.

‍

Key strategies to simplify the buying process and shorten lead sales cycle

‍

#1. Invest in clear and easy to understand product information

• Avoid technical jargon and focus on the benefits and value proposition (if possible, try to showcase the business benefits of the product used by other customers).
• Develop informative product videos or demos (e.g. visual aids can help potential buyers grasp complex concepts more easily).
• Provide comprehensive FAQs - this one often lands on the website, however it could be helpful if shared with prospects during the buying process. It’s a great way to address common questions and concerns upfront.

‍

#2. Offer custom demonstrations

• Provide custom demonstrations (e.g. product demos in a video format) to show how the product can solve specific customer problems focusing each demo on specific workflows or use cases.
• Create customised pricing packages - offer flexible options to meet different budgets and requirements (e.g. a free plan might solve a lot of objections at the start and increase the adoption rate of your product).

‍

#3. Improve decision-making process

• Ensure all relevant decision-makers are engaged from the beginning (e.g. make sure decision makers are present during the first few prospect meetings)
• Set expectations and keep customers informed about the progress by providing key milestones and timelines for project implementation.
• Allow customers to test the product before making a final decision (e.g. offer a free plan, a trial period or a pilot program for bigger deals; this increases prospects confidence in your offering and reduces associated risks).

‍

#4. Focus on strong customer support

• Provide dedicated account managers and customer success teams. Make sure to assign a point of contact for each customer.
• Help customers learn how to use the product effectively with appropriate training and onboarding.
• Address questions and concerns promptly.

‍

#5. Leverage technology

• Implement a customer relationship management (CRM) system: Track customer interactions and preferences.
• Use online portals or self-service options to empower customers to access information and resources independently in their own time.
• Offer virtual demos or consultations.

By implementing these proven strategies, you can simplify the buying process for complex products and reduce customer friction.

‍

How to navigate through a complex enterprise sales cycle?

Enterprise sales cycles tend to be longer than those for SMBs due to increased decision-makers and approval processes. When selling to larger organisations, sales teams often need to navigate complex hierarchies, secure buy-in from multiple stakeholders, and adhere to rigorous procurement procedures. These factors can significantly extend the sales cycle, making it essential for businesses to develop effective strategies to expedite the process.

Working in enterprise global sales, I noticed two major factors impacting the sales cycle - the strength of the relationship with the prospects and tailored, or even personalised approach to your buyers. Most of the time, enterprise deals (i.e. $10,000+ per annum) will always take longer to close. 

But there are proven ways to navigate through the complex buying journey:

‍

Focus on relationships with key stakeholders

• Understand the organisational structure and identify key individuals involved in the purchasing process (i.e. in large companies, it’s certain you’ll be dealing with a few decision makers from various departments). 
• Establish rapport with these stakeholders through regular communication and value-driven interactions. What’s important is that your mindset shouldn’t be focused on a single transaction. Make sure you embrace a consultative approach and guide prospects through the process of being attentive to their requests for more information.
• Align with their goals and demonstrate how your product or service can help them achieve their objectives and address their pain points.
• Identify potential objections and prepare counterarguments to address them proactively.
• Offer comprehensive documentation, including ROI analysis, case studies, and testimonials, to support your proposal.

‍

Determine your sales strategy 

Companies focusing on self-service models often have shorter sales cycles compared to those with a more sales-led approach. This is because self-service models empower customers to make purchasing decisions independently, eliminating the need for lengthy sales presentations and negotiations. Before transitioning to a self-service sales model, it's crucial to assess whether your software is a good fit. 

Here are a few factors to consider:

Product complexity

If your software is easy to understand and use, a self-service model might be a good option. If your product is more complex and requires extensive training or customisation, a more sales-led approach might be necessary.

Target market

If your target market is familiar with technology and comfortable making purchases online, a self-service model could be effective. If your customers are less tech-savvy, a more traditional sales-led approach might be better suited.

Pricing model

A self-service model often works well with subscription-based pricing models. If your product is sold as a one-time purchase, a sales-led approach might be more effective.

Customer support

If you can provide comprehensive online documentation, FAQs, and tutorials, a self-service model might be feasible. If your customers require significant support, a sales-led approach might be necessary.

Competition

Analyse your competitors' sales models to see if self-service is a common approach in your industry. Consider whether your competitors' customers are satisfied with their self-service experiences.

‍

How can PRM software shorten the sales cycle

A well-implemented Partner Relationship Management (PRM) software can significantly enhance your lead-to-customer journey. PRM software is primarily designed for managing partner relationships. However, its influence extends significantly to the improvement of the sales cycle. By centralising partner information and automating processes, PRM indirectly accelerates sales. Enhanced partner collaboration becomes a reality through a shared platform for communication, document sharing, and deal registration. This eliminates paperwork delays and allows partners to quickly register opportunities or access necessary sales materials.

While CRM systems are essential for managing customer relationships, they often fall short when it comes to coordinating and managing partner relationships. PRM software, on the other hand, is specifically designed to streamline partner interactions, bringing in several benefits:

‍

#1. Improves lead quality

PRM can enhance partner lead generation, scoring, and routing. By providing partners with the tools, content, and training they need, PRM can help them generate high-quality leads. Additionally, integrating lead scoring mechanisms allows businesses to prioritise leads based on their potential, ensuring sales teams focus on the most promising prospects. 

Finally, efficient lead routing ensures that qualified leads are assigned to the appropriate sales representatives based on factors such as territory, product expertise, or other relevant criteria.

PRM can enable seamless communication between partners and the parent company, ensuring that leads are shared and followed up on promptly.

By providing insights into lead sources and attribute them correctly through the entire lead journey, businesses can optimise their lead generation strategies.

‍

#2. Improves sales enablement

PRM can streamline sales collateral management, deal registration, and training. By providing sales teams with access to up-to-date sales collateral, product information, and competitive intelligence, PRM ensures they are well-equipped to engage with customers. 

Additionally, implementing a deal registration process helps prevent channel conflict and ensures proper credit allocation. Furthermore, PRM can be used to deliver product training and sales enablement content to both partners and internal sales teams, enhancing their skills and knowledge.

‍

#3. Accelerates deal closure

PRM can enhance sales efficiency by providing real-time information, collaboration tools, and streamlined contract management. Sales teams can access up-to-date deal status, partner performance, and customer information, enabling them to make informed decisions. Additionally, PRM facilitates collaboration between sales and partners through shared documents, messaging, and project management features. 

By streamlining the contract approval and management process, PRM can also reduce deal closure time.

‍

Top 10 ways to convert more leads with PRM software

1. Use PRM data to create partner marketing campaigns for partner communication.
2. Enable partners through active collaboration on joint partner leads and opportunities.
3. Motivate partners and sales teams to exceed quotas through gamification features and incentive programs.
4. Use PRM to track lead interactions, visits to your Unified Partner Portal, and other behaviours to identify potential deal blockers.
5. Ensure a smooth handoff of leads from partners to sales teams by providing clear guidelines and tools.
6. Regularly track and analyse your lead conversion rates to identify areas for improvement and make data-driven adjustments to your sales and marketing strategies.
7. Monitor lead capture ensuring you know what the original lead source is and focus on lead attribution to reward the best performing partner, sales and marketing teams contributing to the overall success of your partnerships.
8. To shorten sales cycles and convert more leads, ensure the new partner onboarding process is easy to follow and without friction, so you can hit the ground running engaging with your new partners.
9. Provide timely commissions and frictionless payments for your partners.
10. Last, but not least, focus on providing exceptional partner experience through automated tasks and workflows, without the reliance on old school methods (e.g. excel spreadsheets - here we go again!)

Pro tip:

By integrating key communication apps with your PRM, such as Slack, Teams or Google Chat) you can better understand where your leads are coming from. Make sure that your PRM software is designed for the entire GTM team, not just partner managers to ensure the real business value.

‍

Key Metrics to Track

To measure the impact of PRM on lead conversion, you need to have a full understanding of your partner program’s overall ROI by tracking KPI’s, including:

• Lead conversion rate
• Sales cycle length
• Partner-generated revenue
• Customer satisfaction
• Partner satisfaction

By effectively leveraging PRM software, you can streamline your sales process and ultimately increase conversions.