Are you feeling your company’s sales cycle is slowing down, with deals taking longer and longer to get over the line?
You’re not alone.
That’s because, as a recent report highlights, 55% of buyers are taking longer to make purchases.
But why is this happening? And what can businesses in the B2B space do to regain the control their sales team had over the buyer’s journey?
Let’s dive in.
Why B2B sales cycle are slowing down
If you’re operating within the Software as a Service (SaaS) space, then you will be aware of some high-profile examples of the tech industry slowing down significantly.
Companies such as Meta, Google, Amazon, Microsoft, Zoom, Airbnb, and other tech giants have conducted mass redundancy, creating a ripple of economic uncertainty across the industry as we move through 2023.
But what’s to blame?
It seemed technology firms were on a never-ending high amplified by the national lockdowns, which may have contributed to some over-ambitious business forecasts.
Meta CEO Mark Zuckerberg admitted this, saying, “many people predicted (the SaaS boom) would be a permanent acceleration that would continue even after the pandemic ended. I did too.”
He added: “But the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected.”
Since the pandemic, worldwide conflict has impacted supply chains, a cost of living crisis has caused consumers to tighten their purse strings, and sky-high inflation rates have stopped speculative companies in their tracks.
The rise of interest rates has caused SaaS valuations to crash, and a lack of urgency to buy software from businesses and consumers alike has left sales teams having to adjust tactics to deal with increasing sales cycles.
Research shows 48.5% of new customers will fall under a sales cycle that’s either 1-3 months or 4-6 months long.
Even then the sales tend to lean on the longer side, as 28.2% of sales cycles are 4-6 months long, more than any other length of time, and 18.1% take as long as 12 months to get over the line.
While this economic stagnation has meant longer sales cycles and thousands of tech staff losing their jobs, there are still reasons to be positive.
Why It’s Not all Doom and Gloom
We now know the SaaS industry is not immune to recession, but it would be wrong to assume the future is bleak in the technology sector.
Ambitious software companies can still enjoy continuous expansion, strengthened market share and increased revenue, if they possess a combination of a problem-solving product, aligned messaging to suit their target market, and a great sales strategy to boot.
How are we so certain? You may ask.
Well, in order to predict the future, it’s often important to reflect on history.
During the 2008 recession, while growth rates were in substantial decline, over 80% of SaaS companies continued to grow and achieve profitability without too much difficulty.
In addition to this, software is becoming more and more important for businesses, and products are no longer being viewed as a luxury.
Let’s not forget that large companies are using more SaaS platforms than ever before. A survey by BetterCloud reports that organisations with more than 1,000 employees use 150+ SaaS applications.
A lot of the increased need for technology is because of remote working trends, which show no signs of slowing down.
Prior to the pandemic, 6% of employees worked primarily from home. By the end of 2025, it’s expected 1/4 workers will be based remotely.
Long term, the sector looks healthy too, with a Statista report predicting continuous 10% growth year on year until 2027.
With that in mind, it’s important businesses are cultivating the right environment and implementing the best strategies to be a part of this growth, even in spite of economic hardship.
Here, we will offer our insight as to how tech companies can do more than just survive, but thrive in the face of uncertain times.
Proactive Ways to Deal with a Longer Sales Cycle
With companies and consumers taking longer to commit to buying, it may seem like your control over the buyer process is slipping.
To regain your footing, and strengthen your sales performance, ensure your business is focusing on the following key areas:
User Experience
Step one of thriving during economic uncertainty is retaining the customers you already have. In order to do this, it’s crucial to understand the needs and pain points of your target audience, so you can tailor your services accordingly.
One effective way to improve the user experience is to streamline the onboarding process and provide clear and concise instructions on how to use your software.
Additionally, regularly collecting and analysing feedback from your customers can help you identify areas of improvement and make necessary adjustments to your product.
To back this up, research shows that 70% of businesses with excellent user experience take advantage of customer feedback.
Investing in customer support and offering timely and personalised assistance can also significantly enhance the user experience, and turn customers into loyal advocates.
Ask yourself, ‘how else can we add value to our customers? And how do we present this value to them in a way that will be well received?’
Doing so will help keep your customers happy and reduce your risk of churn.
Content Creation
As your prospects work their way through your sales funnel, it’s important to keep communicating with them at every level.
To do this effectively, you will need to segment the needs, pain points and motivations of your ideal customer profile (ICP) based on which stage of the sales cycle they are in.
During the awareness stage, focus on creating educational content that informs and educates your audience about the industry and the problems your product or service solves.
At the consideration stage, highlight the features and benefits of your service and demonstrate how it solves the specific issues your ICP is facing.
In the decision stage, provide social proof and testimonials from existing customers to build trust and credibility.
Additionally, ensure that your content is optimised for search engines and social channels to increase visibility and attract new leads.
By nurturing this relationship with your ICP at all stages of your sales funnel, you can strengthen your brand, reduce the sales cycle length, and ultimately drive revenue for your business.
Lead Generation
The common theme when it comes to driving revenue for your software company is understanding your ICP. This is no different when it comes to generating new, top-of-funnel pipeline for your business.
Your strategy should involve aligning your messaging with the needs of your ICP, just as you will do for your website, your paid advertisements and your content plan.
This way, you will know who to contact and how to qualify your leads effectively so you are not wasting time and resources on the wrong people.
Then, you will need to provide multiple touchpoints to open communication channels with potential customers, including email, phone calls, and social channels.
Lead generation, as we know all too well, is all about using data-driven insights to ensure maximum effectiveness.
This is why you should regularly analyse and optimise your lead generation efforts to attract and nurture high-quality leads, which will ultimately help to shorten the length of your sales cycle.
If you need help to understand your market potential, or want to utilise a sophisticated tech stack to bring in more leads for your business, get in touch today.
We can help your business thrive during this period of economic uncertainty.