Once your sales process is in place and your funnel filled with qualified leads, the sales reps needs to finalize the first deals.
This will not happen overnight when it comes to complex solutions involving multiple decision makers. Even if it is shorter than hiring a complete team or even a single Sales reps in the field, it takes time to close the first deal and have a repeatable process in place.
The first quarter is usually spent on prospecting and building the funnel. The second quarter is when we can expect the first reference to come in. As a win-win solution, you may consider reducing the overall pricing of the first deal to have access to a solid referral partner you can use extensively for your future customers in the region. It is always good to include a clause in the contract to prevent from push back. This clause may even include an incentive for the customer.
The third and fourth quarter, the organization can then duplicate the best recognized practices in multiple accounts.
With companies such as Yoorop, you work on a defined timeframe aligned with expected results.
Bear in mind that On demand sales team can reduce the time to market because they are already qualified to sell your technology in your vertical markets.
” European SaaS startups report a CAC payback of 4-12 months which sounds quite optimistic.
In our experience, best-in-class SaaS startups reach a CAC payback of less than 12 months”
SERENA-Report European champion 2021
Deal size matters
Deal size is also an important factor to take into consideration.
A $20k-$50k deal often takes 2–3 months. A few weeks of discovery of a potential vendor or two, a few demos, internal discussion, and planning. Then a month or so to make the decision, negotiate price, and sign. If there’s a pilot, add that to the timeline. But this deal size isn’t usually large enough to be budgeted in mid-sized and larger companies.
A $100k+ deal often takes around 3 to 5 months, because of the budget process. That means it’s on an annual planning cycle and will generally have multiple stakeholders. These often take a few months of discovery and some formal vendor discussions. And importantly, the “deal driver” and project owner often no longer own the actual budget itself. It’s their boss’ budget. So, there is further negotiation and discussion with the VP/SVP above them that owns the budget. This adds additional time.
A $500k-$1m+ deal often gets into the next year. This doesn’t mean it always takes 12+ months to close. But the decision, the RFP process, the budgeting, all takes more than 1 year. A decision to buy a $500k-$1m+ piece of software this year has usually already been made the prior year, and often discussed the year before. Even if you succeed to close it before, bear in mind that behind the scenes, there usually was a year or more of work on the customer side getting to that point.
Ask a Yoorop Sales expert if you plan to increase or optimise your sales process.