SaaS and The 7-10 Year Sales Cycle

Screen Shot 2012-12-17 at 8.25.13 AMEchoSign is about to finish its 7th year out of ‘beta’ on January 1, 2013.  And last week, Adobe announced EchoSign and Document Web Services hit $50,000,000 in ARR at year-end.  That gives me an opportunity to reflect on some of the longer-term elements of SaaS.

One key learning I think is you need to take a very, very long-term view of the sales cycle.  Like, a 7 year view.

The tweet at the right is from Tivo, about their success using EchoSign and the potential to expand to other departments there.  That’s not the interesting part.

The interesting part is I remember first meeting with Tivo on site in March of 2006.  From first touch, that’s almost a 7 year sales cycle.

My point is SaaS is a long play.  As hard as it is to get leads going, get the engine going … many of the folks that kick the tires in the early days just won’t be ready.  For a variety of reasons.  Your product may be too immature.  It may involve too much business process change at the time.  You may seem too risky in the beginning, as a vendor, to bet on.  It may require changes on the prospect’s side.

But that doesn’t mean you won’t eventually get them on-board.

So in the early days, don’t forget to also measure your progress by the leads that don’t close — not just the ones that do.  Measure that velocity, as a positive metric, irrespective of if they close or not.  That may be frustrating, the ones that come and go, when you’re just trying to get revenues going, get points on the board.  But the fact that you attracted interest, even if you didn’t close it — that’s really a great sign.  It means you are at least in the zone of having something real.

And who knows, 7-10 years later, you may get them as a customer ;)

There are 3 comments

  1. Quora

    What techniques can be used to improve conversion rates?…

    Let me add a few learnings. However, before we get there, let me state the obvious, that there are limits here. Many obsess about improving conversion rates — which is important — when the real issue is the denominator, i.e. insufficient growth in th…

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