Longer Sales Cycles and Their Bottom-Line Consequences
While many metrics matter to B2B sales leaders, average sales cycle length tops the list because it can directly impact a company’s financial health. Accelerate the sales cycle, and leaders do more than drive revenue faster – they improve revenue forecasting, reduce customer acquisition costs (CAC) and, in the process, likely root out pipeline bottlenecks.
Unfortunately, enterprise sales leaders are experiencing lengthening cycles, per a 2023 survey of RevOps professionals:
- 49% of businesses saw an increase in their sales cycle length in 2023.
- Out of those businesses, 52% saw their sales cycles increase by 10% or more, with 6.3% seeing an increase of 30% or more.
Sales teams are missing their numbers as a result. One survey of finance, RevOps, and sales leaders in the US and UK found that 91% failed to hit sales quota expectations in 2023.
Decoding the Sales Cycle Slowdown
Per the 2023 TrustRadius B2B Buying Disconnect Report, a multitude of factors – including number of decision makers, information needed to justify spend, and budget – is causing buyers to slow or even rethink their purchases.
Changes in Buying Process Due to Economic Impact
TrustRadius 2023 B2B Buying Disconnect survey data was collected in March 2023 from 1,604 technology buyers across TrustRadius’ global network and 248 members of go-to-market teams.
More complex buyer groups solving more complex problems
Most B2B purchases are a team effort, made by a group of six to 10 stakeholders on average. It’s no wonder in light of the fact that Gartner found 99% of B2B purchases are driven by organizational changes. As analysts explain, “This means buyers are most often motivated to solve longer-term, internal challenges that span multiple parts of the buyer organization.” 5
Difficulty driving buyer consensus
With decision-making units the norm, B2B sales cycles are extended until each member of the buying group gets on board with a purchase decision. Yet Forrester’s latest survey of more than 18,000 business buyers found that today’s younger buyers – the majority of the survey respondents – struggle to drive consensus for purchases. It’s easy to see why when 95% of B2B buying groups need to revisit decisions at least once during the buying process as new information emerges. 7
Declining budgets and rising layoffs
In addition to consensus-building challenges, today’s B2B buyers are at the mercy of economic realities. In the same Forrester survey referenced above, 89% of B2B buyers saw a purchase stalled, often due to budget limitations. Buyers must now justify the ROI of every single purchase decision in a way they haven’t had to do in the past decade.
Combine all this with a marketplace saturated by offerings, and it’s more challenging and expensive for B2B sales teams to close deals. This is an about-face from the heady days of booming economic times when purchases flooded in from buyers flush with generous budgets and mandates to modernize.
The good news is that understanding how this perfect storm is causing drawn-out deal times is the key to unlocking paths to accelerated sales cycles.
Sales Velocity Unleashed: How Winning Leaders Shorten Sales Cycles
As macroeconomic issues lead to sluggish sales, strategic sales leaders are doubling down at a micro level to not only prevent deals from slipping but to drive revenue. And they are smart to do so. According to McKinsey research, “companies tend to fall behind if they focus solely on avoiding the downside.” On the flip side, those that control operating costs while prioritizing revenue growth during uncertain times deliver far more value than their industry peers. 8
With that in mind, the sales leaders that win in this time of uncertainty are those keeping go-to-market (GTM) teams hyper-focused on the following:
- Re-learn and master the fundamentals
- Accelerate purchase intent with compelling ROI
- Prioritize relationships
1. Re-learn and master the fundamentals
Getting back to basics is about putting in place a strong GTM foundation for 2024, augmented by AI tools that make it easier to understand buyer groups, qualify deals, determine engagement levels, and adjust as needed.
Start with average deal length, a subset of deal velocity. The first way to accelerate deal velocity is by more quickly moving a prospect from lead to opportunity.
Marketing plays a huge role by identifying, reaching, and engaging the right persona in the right industry and organization to deliver a qualified lead. To ensure those leads are warm, marketing can run email drip campaigns offering compelling content aligned with the target personas’ pain points and aspirations.
Once marketing hands off a qualified lead, sellers can ensure they are pursuing winnable deals by focusing on opportunities with the highest potential. And because sales teams are getting smaller in many companies, it’s also important to work every deal with a sense of urgency and laser-focus. The key is homing in on purchase-ready buyers.
Qualification hinges on understanding whether a prospect truly intends to make a purchase, has the budget, is operating on a clear timeline around a compelling event or goal…and is ready to buy.
To then convert a promising opportunity to a sale as quickly as possible, sellers can use tools to efficiently conduct research providing key insight into the buyer – their motivations, concerns, and strategic initiatives.
Assuming GTM teams have taken correct steps to reach and engage fitting prospects, a two-step process can help sales leaders surface multiple opportunities on the fast track to close.
- Call upon tools the marketing team has invested in to understand which accounts are digitally engaging by opening marketing emails, visiting the website, downloading content and so forth.
- Then use sales engagement data and activity trends in CRM to confirm sellers are actively engaging these accounts.
Leaders can easily spot issues using CRM-native AI sales tools. For instance, if sellers are neglecting accounts demonstrating intent, an AI tool can proactively flag those opportunities. Managers can then course correct while the opportunity is still hot, ensuring outreach happens at the right cadence and the necessary number of times to drive a purchase. If reps are not following through on exit criteria, managers can intervene to reduce sales cycle time and late-stage losses.
By understanding how much time reps are spending on certain opportunities, and the health of each deal, managers can keep sellers focused on deals with the most potential to close.
“Sales reps get excited over early momentum,” explained Livingston. “But you have to determine how realistic an opportunity is. Qualifying deals early equates to spending time on the right types of deals and the right motion.”
2. Accelerate purchase intent with compelling ROI
Once a buyer shows high-purchase intent, sales must convince them that shifting from the status quo is essential and urgent for the prospect’s company and worthwhile for them personally. Nailing the “case-for-change” can dramatically impact the sales cycle and revenues.
However, today’s risk-averse, budget-strapped buyers won’t budge unless the seller can lay out a specific ROI case. Success is a matter of identifying a legitimate pain and desired outcome the prospect agrees with and that the seller quantifies while presenting a measurable outcome their solution can deliver.
A compelling case looks something like this: “Because of this challenge, your churn rate is 20%. Here is how we’re going to drop that to 12%”
And this need to prove compelling ROI doesn’t just apply to new deals. “We’re not just selling to net-new customers,” said Palmer. “We’re in this cycle of re-selling and justifying ROI with every single existing customer.”
Knowing the case for change, or in the case of re-selling, making a case to stay, must win over an entire buying committee. It’s important to understand each stakeholder’s pressing concerns based on their function, seniority, and role within the decision-making process. Select AI sales tools can analyze closed/won deals and complex deal metrics to surface crucial insights about buying groups, such as predicted buying power.
And it’s smart to use such tools. According to McKinsey, "Companies are...turning to analytics to help them predict more accurately who their potential customers are, their pain points and their next moves, and then proactively engage with them as early as possible...Players with strong customer analytics are 1.5 times more likely to grow fast, and can drive increases in earnings upwards of 15–25 percent." 9
Once sellers know what matters most to each member – from the champion, decision makers, and influencers to end users, deal detractors, and gatekeepers – they can help drive consensus. It’s a matter of equipping the champion with information and content speaking to the unique concerns of each stakeholder, while proactively addressing roadblocks and objections.
By engaging and swaying the entire buying group in a concerted, effective manner, sellers significantly increase the likelihood of a faster closed-won deal.
3. Prioritize relationships
Being able to effectively move an entire buying committee to purchase reinforces the one constant in sales: the importance of relationships. In addition to developing and nurturing relationships up-front with prospective buyers – ideally even before a purchase is being considered – it’s a must to create deep, quality connections with all potential stakeholders (i.e., take a multi-threaded approach).
Remember: purchase by consensus is the norm. If nothing else, being multi-threaded reduces risk should a champion leave the organization due to budget cuts or layoffs. The power of multi-threaded engagement is the ability to keep deal momentum going.
Even better, B2B organizations that “unify commercial strategies and leverage multithreaded commercial engagements will realize revenue growth that outperforms their competition by a whopping 50%,” according to Gartner. 10
Fortunately, sales teams can call upon AI-powered tools to help free up their time on some key tasks so they can spend more time in front of customers:
- Visually map a deal’s influencers
- Identify individuals that have informal influence over certain departments or decisions
- Understand lines of influence between all stakeholders in an opportunity
- Detect newly engaged contacts in a deal
That said, sellers should always prioritize lasting relationships over short-term wins. Is it worth straining a relationship to push a deal to close this quarter? Or is it worth more to maintain that relationship by waiting until the prospect feels comfortable making the purchase?
Palmer says that knowing how to build productive relationships with customers is one of the most fundamental and crucial skills of sales reps. It’s also one that has been neglected when the economy was booming, along with other fundamental skills. “For those of us who have been in sales for a long time, it’s about reflexing these muscles that maybe got lazy,” says Palmer. “For those sales professionals who haven’t worked in this economy, it’s possible they haven’t been trained on these skills. As sales leaders, it’s important to re-prioritize enablement and training to set our teams up for success.”
Pave the Way for Faster Revenue
In the face of larger buying committees struggling to arrive at purchase consensus during tough economic times, sales teams are up against longer sales cycles. Rather than accept drawn-out deal times, sales leaders can keep their teams working the best opportunities in the most effective way. With a consistent approach built on the three principles outlined here, they can fuel a powerful sales engine that yields the fastest path to revenue.
Success with AI starts by understanding where your organization is today–and seeing what's possible tomorrow. Take the GTM AI Maturity Assessment.