Dear SaaStr: How Long Should a Sales Funnel Take from Start to Close?
It depends on your deal size, target customer, buyer, and sales process. There’s no one-size-fits-all answer … but I can give you some benchmarks based on SaaS deal sizes and sales cycles:
1. Small Deals (<$5,000 ACV)
- Timeline: 14-30 days
- These deals are often transactional and can close in 1-2 calls. If you’re selling to SMBs or individuals, the decision-making process is quick, and there are fewer stakeholders involved.
2. Mid-Market Deals ($20,000-$50,000 ACV)
- Timeline: 2-3 months
- These deals require more discovery, demos, and internal discussions on the buyer’s side. You’ll likely deal with a few stakeholders, but they’re not usually tied to annual budget cycles, so they can close faster than enterprise deals.
3. Enterprise Deals ($100,000+ ACV)
- Timeline: 6-12 months (sometimes longer)
- Enterprise sales cycles are long because they involve multiple stakeholders, RFPs, pilots, and often require alignment with annual budget planning. For example, when we closed Google at Adobe Sign / EchoSign, it took 18 months just to get the first deal signed, and another 18-24 months to scale it up. The next similar one closed faster, however.
4. Very Large Deals ($500,000+ ACV)
- Timeline: 12-24 months
- These deals are almost always tied to annual budget cycles and require significant relationship-building. They often start with pilots or proof-of-concept projects before scaling into larger contracts.
Key Factors That Impact Funnel Length:
- Intent of the Prospect: High-intent leads (e.g., inbound requests) close faster than low-intent ones (e.g., cold outreach).
- Number of Stakeholders: The more people involved in the decision, the longer it takes.
- Budgeting Cycles: Larger deals are often tied to annual budgets, which can delay the process.
- Your Brand and Trust: If you’re the clear leader in your space, deals close faster because buyers trust you more.
The bottom line: Small deals should close in weeks, mid-market deals in months, and enterprise deals in quarters (or years). If your sales funnel is taking longer than these benchmarks, it’s worth digging into where deals are getting stuck.
A related post here:
