Dear SaaStr: What’s a Good Benchmark for B2B Sales Cycles?
To overgeneralize, but to give you a pretty rough sense:
Sales cycles are very much impacted by the intent of the prospect. Intent varies from High Probability / Intent Opportunities (“I Need to Buy Now” — this exploded during the pandemic) to Very Low Intent and Probability, and this is important to factor in, especially during the earlier days when you’re not as strong as lead scoring and lead management.
It may take one call to close a High Probability Opp. It may take you 2 years in some cases in the early days. \
Once you have a bit of an engine going though:
- Deals < $2,000 in ACV should close on average within 14 days.
- Deals < $5,000 in ACV should close on average within 30 days.
- Deals < $25,000 in ACV should close on average within 90 days.
- Deals < $100,000 in ACV should close on average within 90-180 days depending on # of stakeholders and gates.
- Deals > $100,000 in ACV will take on average 3–9 months to close. They can take the better part of a year, as importantly, these purchases are often on budgets on Annual cycles. Some deals will be faster, some shorter. But on average.
- Deals > $500,000 in ACV are almost always budgeted annually. This means then can take from 6-18+ months to close (once in a while shorter if the timing works out). Short if you hit the annual budgeting process just right. A whole additional year if you don’t.
My experience. It will vary. If the business process change is HUGE (e.g., ERP) it will be far longer. If no business process change is involved, it can be shorter.
But I think this will give you a general sense.