How to Deal With Looong Sales Cycles!
Jason M. Lemkin gives four ways to handle enterprise sales cycles that drag on for months. Hire experienced sales leaders who can map stakeholders and shorten timelines, use paid pilots instead of free ones, and accept that long cycles become an asset once you have multiple deals moving at once.
Chapters
Hey, everybody. I wanted to chat for just a minute about dealing with long sales cycles. If you're selling to tiny businesses or have a freemium service, you're probably not dealing with this. Maybe customers convert to paid in a day, a week, an hour. But if you're selling bigger deals, 50k, 100k later, million dollar deals, you're going to have, you're going to have long sales cycles and it's going to be frustrating at first. You will come in and you'll get an amazing lead from a Fortune 500 company, from a tech leader, and they're going to want to use your product. Even in the early days, you're going to get so excited and you're going to find out once you start talking, it might not be until the end of the year, and it might take a couple of months to evaluate all the vendors and then a pilot and then an internal review and finally a deployment. And you're in the early days, the first months, the first years, the first few years, even that could seem like forever. You've got to put points on the board now. And as exciting as some of these logos are, you know, that long sales cycle can just seem brutal. But let me give you sort of 4 thoughts on how to deal with it. And these are not jaw dropping thoughts. These are not. But I think ultimately if you change your mindset, your approach to long sales cycles, they'll become, instead of a liability, they'll become a superpower for you, something you get very good at dealing with. So the first one is get zen. Get zen about long sales cycles. Here's, here's the thing. You can shorten sales cycles, but you cannot take a big company's nine month process and compress it into nine days. It cannot happen. I was briefly a VP in a Fortune 500 tech company, and you sort of get it when you're a vendor, but you don't really see it till you're on the other side. Bigger things get budgeted. And they get budgeted in one of two ways. Either they get budgeted annually. So it's almost, depending on when you're watching this video, it may almost be too late to get into a budgeting cycle. I'm making this in February. And for bigger investments, bigger software investments, it's too late for this year. Like you got to get into next year. So that's profoundly frustrating as a startup that you have to wait another year to get into a budgeting cycle. Although that's mostly for really big checks. For somewhat smaller checks, there's a discretionary budget. When I was a VP in the Fortune 500, I had about a $500,000 discretionary budget for my team that I could divide up into 10 chips, five chips, a few pieces of software, adding up to a half million that would help team be more efficient. So not all things have to be literally budgeted for a given year, but they do, they do take time and they do compete for that 500k budget. And it takes time. And there's multiple stakeholders. It's not just one person that makes the decision. Like a small business, there may be multiple, multiple functional areas that want to chime in on this decision. And they may want to evaluate two or three vendors. Even if they've already picked you, as you know this, a lot of times they still need to go through evaluation to make sure to make sure they're making the right decision. Especially if you don't have the number one brand right. It's always true in the enterprise that if you're an emerging vendor, someone probably has to prove you're a better. You're better than buying Salesforce or whatever other leader is out there. So you can't, you can't shorten timelines magically, but you can get better at them. And the second point. So first, get zen about it. Realize it's going to take time, and don't overstress the fact that you can't close a big deal in weeks, that it's going to take months to get help. Get help because the CEOs were too busy as founders, we don't have time to do nothing but work on that big deal. I've done that from time to time, dropped everything and worked on a big deal. But what you'll find is when you hire a VP of Sales, a sales leader, and even a few AES that have done deals at bigger deal sizes, they know if they're experienced, they know. They know how to identify all the stakeholders in a deal. They know how to outline a process with them. They know how to talk about when the initial vendor decisions will be made, whether an RFP is involved, who needs to get a demo, when we can get a pilot going, if one's necessary, when we can get into production. And they'll know, they'll outline it all with all the stakeholders. And by doing that and then talking every week about a process, they'll pull your sales cycle in at least 20 to 30% and sometimes cut it in half just by marshaling all the correct troops to an end goal together as a team because their goal is to go live too. No one wastes their time. No customers or prospects waste their time. So when they're investing the time with your team, with your sales team and the rest, they want to go live too. If. If it meets their needs. If it meets their needs. And a great sales team will not just be about getting the biggest check and getting money. Yes, that's their end goal, but they know if they don't outline a process to meet the customer's needs, the deal won't happen. So they get very good at it. More enterprise heads of sales and AES. And so that means when you hire a good one, it's got to be good. But when you hire a real head of sales and Maybe a few AES that have done this before, you will watch your sales cycles shorten. So get as soon as you've closed a few yourself, go out and get some help. But make sure it's folks that are experienced at your deal size, not folks that know how to do just smaller deals or even much, much larger deals, but folks that have a few years of experience at least closing real deals at your core. Acv. So that's point two. Get the help. Point three is that ultimately, ultimately long sales cycles are not all pad. So what do I mean by that? Of course you want them to shorten. You want to shorten sales cycles for no other reason that the shorter a sales cycle is, all things being, the higher the chance the deal has to close. Time is the enemy of all deals. Um, but ultimately, once you've taken what used to be, say, nine months and shrunken it to six months with your great head of sales, once you have 10 of these deals in flight instead of just one, you'll get a little Zen about it. And in fact, it will give you predictable pipeline and predictable revenue. So one big enterprise deal at a time is super stressful. It's just one and the sales cycle's long. Even two or three is stressful. Once you start getting five, six, seven of these going long cycles. Sales cycles aren't all bad because again, they're predictable. You can get a sense of the odds of them closing. You'll get better and better at that and you'll start having these arrows land each quarter. It won't be all bad as you start to go long and fourth. And this is another potential forced error or unforced error rather that I see so many startups make. If you really want to shorten sales cycles for real and you want to close more deals, Stop being scared of the pilot, of the paid pilot. Enterprises want they're willing to take risk. If they weren't, they wouldn't be talking to you folks writing larger checks. But they don't want to take all the risk up front. So a lot of founders and a lot of first time heads of sales, especially coming from smaller deals that aren't used to it, they don't want to do paid pilots. Why do they not want to do pilots? Because they have to sell the deal twice. First they have to go to all the work and do the discovery and do the zooms and do the webinars and do the demos for say 100k deal, but all they get is a 10k pilot to start. It sounds like a terrible deal for a sales rep and I guess it is a terrible deal viewed in the short term. But you got to get good at it because if you get really good at it, if you're okay with the pilot, if you can okay it in a week, get clear goals for that pilot, close that pilot in 60 days and make everyone a success, you're going to close the bigger deal. And so if your customers are asking a lot for pilots and proof of concepts, I know it'll bum some folks out on the sales team and others, but pick up the team and tell them this is part of what we're going to get good at and set a KPI and say, look, I know they're stressful, but we're going to close 90% of our paid pilots and proof of concepts. We're going to close 90% and when we do that, you're going to get your commission. It's going to happen. This is just part of our cadence, the way we're going to do business and make paid pilots, paid trials, paid proof of concepts, a superpower. Because then you will beat out all your competitors and other folks that don't want to do them, that aren't good at them. And lastly, related to that, do free trials, do free pilots help? I'm not so sure. I have not seen a lot of B2B companies be successful giving away pilots. Free stuff isn't valued. And just as importantly, because it's not valued, a lot of times the bigger company won't put the resources on it. They won't really do find a business group to try it. They won't toy around with the business process, change often required with the vendor. So I rarely, I frankly never see free, truly free work. A real enterprise can at least get 10 grand for a pilot if it's important to them. So I know they're stressful, Megan, and I know long sales cycles will drive you nuts. But if you embrace them, if you shorten them, if you get help and you get really good at what it takes to close these deals, and then you have a bunch in flight, you're going to get really good at it, and they're going to turn out to be an asset.
