How to Cope With Long Sales Cycles
Few things will frustrate you more in the early days than long sales cycles on bigger deals. A great logo will come in … but they’ll talk about maybe deploying at the end of the year. Maybe. You’ll feel like you just don’t have the time for a 6, 9 or even 12 month sales cycle when you’re struggling just to put the first few points on the board. You’ll feel like any customer you can’t close this month, or at least this quarter, is tantamount to a forever.
My #1 bit of advice? Get past it — fast. You have to think about Going Long even in the very earliest days. Even when if you’re honest, you’re not even sure you’ll make it another quarter. Because longer sales cycles are just part-and-parcel of larger checks. And for most of us, larger checks are one of the easiest ways to grow faster and hit our goals.
To help out, 4 thoughts / strategies:
One, you have to get Zen. You cannot force 9 month sales cycles into 9 days. You cannot force Fortune 500 companies to buy six and seven figure deals in the same way SMBs buy a $10/month product. In the first 2 years, this will create a lot of stress. But later, you won’t care as much. You’ll have enough deals in the pipeline, that they “hatch” in various orders, and you’ll get predictability around it. This is why “pipeline” doesn’t make any sense to start-ups, not really, but makes total sense for BigCo sales executives.
Two, get help that has closed similar sized deals. Great enterprise sales executives and VPs know how to shorten sales cycles to as short as practical.
But you probably can shorten it to 6 months, or even 4 months. A great VP of Sales knows that one of the best ways to hit her number is to shorten sales cycles to the maximum practical. Any more than that, and you take a revenue hit. Crazy discounting and high pressure sales tactics don’t work on long sales cycle deals. They just lead to a smaller deal, no faster.
Junior and inexperienced sales reps can often do OK with small deals, with good guidance and training. But they can’t bring a $750k deal with Aetna in faster.
But a great, experienced VP of Sales can. This is another reason to make sure you hire your VP and Directors of sales with experience at your core price point. They’ll know how to deal with sales cycles at that price point well. And less well with other sales cycles.
Three, once you scale, a bunch of predictable longer sales cycle deals aren’t all bad. Later, as you get into Year 3 and beyond, you’ll need lots of irons in the fire. You’ll get better at predicting when and how bigger deals close. These longer sales cycles, so long as they are shortened by a great VP of Sales as much as possible, will help you start each quarter with some good stuff already ready to close.
Four, and importantly — don’t fear the Paid Pilot / Paid Trial / Paid POC (Proof of Concept). Most veteran sales professional in particular hate paid trials and paid short-term proof-of-concept deals. As they should — a 90 day trial forces the sales team to basically sell the deal twice. Once for the pilot, and again in just a few months for the longer term deal. It’s twice the work for the same commission with more risk into the deal.
But don’t let short-term thinking here again add stress. You are a tiny vendor, even at $20m ARR, let alone at $0.2m ARR. It’s entirely fair for a Big Company to ask for a pilot to see if it’s really going to work. More importantly, it’s how they buy from new vendors. If you try and change the way a Big Company buys, then best case, you add risk and time to a deal. And worst case, you simply break it.
So when folks tell you not to do Paid Pilots or similar deals, don’t listen. At least, not in the early days. Do what it takes to get the customer. No one has heard of you. The prospect is taking a huge risk working with you. Take a tiny bit of risk back. Best on yourself, and deliver the service the way that makes the customer comfortable.
So get zen about pilots. Just do them when you are asked. At least until you’ve got 20+ amazing logos up on the website.