Taking a closer look at the peculiarities of B2B
Ever hear of the saying ‘The sales cycle is half the length it takes for the company to go under’? Me neither, but when I was testing an AI copywriting tool the other day that’s what it told me — and it got me thinking.
Sales cycles are a big deal: they make or break your success as a company, and particularly growing companies trying to break into a new market or sell an innovative product have to manage their relatively short runway while figuring out how to shorten their sales cycle. And while understanding the sales cycle is critical for any company, it can be particularly challenging for startups because each sale needs to count. You don’t have the luxury of blowing a deal or closing smaller customers that might not scale well; how can you prove that this new line of business is viable while avoiding succumbing to the endlessly postponed purchasing decision?
In this article, we’re going to dive into the ins and outs of B2B sales cycles. Sales cycles can be defined as the process of each step of the working relationship with your client as you go from prospecting to closing business. A common issue that B2B companies face is having excessively long sales cycles. This is especially visible in the bottom of the funnel, where interest has been shown but the purchase decision is delayed time and again.
In B2B sales, the sale isn’t the end of the journey. The goal is to deliver value as quickly as possible and your customer onboarding process is your first opportunity to let a new client experience a win. Read our article on optimising post-sales processes to learn all about how to turn your customer onboarding into a success moment.
What is the B2B sales cycle
The sales cycle is the process you go through to close a deal. It’s made up of multiple stages, from the initial contact with a potential client to the sale. Depending on the industry and product or service, there can be various steps in between, such as a demo, proof of concept, and developing tailor-made proposals. Each step in your sales cycle has its own benchmarks, such as understanding the decision-making process and drivers in a company, or something as practical as getting that initial meeting or a quote request.
While this is fairly straightforward for some industries, it can be more complex for others. The length of your sales cycle is largely dependent on two factors: the price point of your product or service and the size of your typical account. The more expensive your product is and/or the larger your accounts are, the longer it will usually take to navigate the decision-making process and for your prospects to make a decision. When you sell a high-priced solution that requires approval from multiple key stakeholders at large companies, you should expect a long sales cycle by default.
For the purpose of completeness, the B2B cycle in short:
- The beginning of the cycle begins with contacting people from the company you want to sell your product to and getting them interested in your offering. Although it is appealing to mainly talk about yourself here, in the end it is all about your understanding of their situation and educating them about the solution you offer.
- The next stage is finding out what exactly the customer needs, what their pain points are and what their budget is for a new product or service. In this phase it is also important to invest in understanding your prospect’s organisation; what is the short- and long-term strategy, who is thinking about this decision, and what ultimately drives this decision for each of them?
- Then comes assessing whether your solution will meet their needs, how it will help them solve their problems and what their current solution and alternatives are. This is where finally you approach the end of the cycle where you present and negotiate the offer and, hopefully, close that deal.
When you sell a high-priced solution that requires approval from multiple key stakeholders at large companies, you should expect a long sales cycle by default.
Why B2B sales cycles are so long
The average B2C buying cycle can be a matter of seconds, simply put: a consumer walks down the street, sees something that catches their eye, and decides to make a purchase. Businesses are different. A business will almost never make an impulse buy. When you’re selling to another company, you need to provide a lot more information about your product or service and moreover, you’ll need to educate them on your solution and make clear why it’s better than any alternative they might already have. So, what causes B2B sales cycles to be long?
Firstly, it’s unlikely that you will be selling to just one person or department. It’s not just an individual making the decision to buy or not to buy, but there are multiple people with different roles and motivations that must be considered to move forward in the process — the decision-making unit. This is a key characteristic of the B2B sales cycle and causes the many complexities it has. To be honest, it’s exactly what makes it interesting. But it’s also the reason why B2B sales cycles tend to be messy and long, especially when you’re dealing with complex products and/or large enterprises. After all, as a seller, you’re navigating a complicated sales process with multiple influencers and decision-makers who have different agendas that sometimes even conflict.
Depending on the size of the company, the decision-making unit consists of one or more decision makers, which can be either champions or blockers of the final decision, and multiple influencers. These influencers are in many cases the end users of the solution, the ones who will eventually have to work with a tool, for example. And where the department head will be mainly concerned with costs and terms and conditions, the end user will be focused on how it will affect the daily performance of their tasks.
Second, many B2B companies sell complex products that require a high level of training and familiarity before a prospect is able to truly appreciate its value and make the purchase decision. Your prospects won’t buy until they know enough about your product to understand its benefits and decide whether it’s worth buying. Therefore, it’s common for B2B sales reps to spend weeks or months educating prospects through technical demonstrations and training sessions disguised as sales meetings.
Information and education are the main priorities in this respect. There must be sufficient information available that specifically addresses the drivers and considerations for each of the different stakeholders in the decision-making unit. Between the one who signs off on the purchase, the budget holder, and the end user, each individual within the B2B sales process provides a unique perspective. They all have a different set of needs and expectations, and they may require different types of sales interactions to cater to those needs.
Finally, B2B deals may involve large costs but, almost more importantly, a B2B purchase decision always means organisational change. In this case, cost is thus not only defined in a financial sense, but should also include both the mental and time investment in changing operations, workflows, training of employees, and not least dealing with people’s resistance to change. As a result, it takes more time for B2B customers to consider and weigh their options, and to get approval from all relevant people in their company. If the wrong choice is made here, the company is stuck with a solution that does not work for them, with which they have to get on with for the time being, or go through the process of research, consideration, and purchase again in order to replace the newly acquired solution straight away. The fear of making the wrong decision kicks in.
This is where the points mentioned above come together: the high cost associated with these buying decisions involve a significant amount of risk and the decision-making process involves multiple people, who all have to make their own assessment of risk, cost and return.
Why doing nothing is your worst enemy
And because of the complexity of the decision, and the risk assessment that the different people in the decision-making unit have to make, the biggest competitor you have is often plainly doing nothing. Getting stuck in differing opinions, priorities and office politics can endlessly complicate decisions to purchase new products or services, and often results in the decision simply not being made, because the easiest consensus is to change nothing.
The main reason that the average sales cycle takes so long is that buyers need to substantiate their buying decisions internally: they have to justify pulling their business away from the established order, and they expect you as a provider to demonstrate how your solution is better than what they’re doing right now. And you have to help them build this consensus among their colleagues and prove that your solution will deliver the expected results for their organisation — results that may have a different definition for each of the people involved.
This is where it often gets stuck however: after an initial introduction and education, there is reasonable interest from one or various individuals. But they cannot make the decision themselves and, from their position in the decision-making unit, cannot manage to challenge the status quo. The interaction between all the individuals in the decision-making unit creates a dynamic that is difficult to influence: most of the time spent on B2B buying decisions isn’t spent analysing them; it’s spent justifying them.
The interaction between all the individuals in the decision-making unit creates a dynamic that is difficult to influence: most of the time spent on B2B buying decisions isn’t spent analysing them; it’s spent justifying them.
What you can do to shorten the sales cycle
In B2B marketing and sales, understanding the needs of your target audience is critical for your success. When you understand what your prospects want and what drives their decision, you’re able to communicate with them more effectively, giving them the information they need in order to make an educated decision about your product or service which they can justify to their peers.
The average B2B sales cycle can be quite complex, with multiple decision makers and influencers from various departments involved in the process. The more you know about the interests and challenges of your prospects, the better able you are to tailor your strategy to their needs. To get to this level of comprehension, you need to develop a strong awareness of your prospect’s needs, pain points and goals. The more you know about your prospect, the better you can craft messaging that resonates with them, and the easier it will be to navigate the complex sales cycles that are typical in B2B industries.
The interplay between the business model, the product or solution, and the way it is communicated – by people, content, or automated – is what we call sales streamlining. In simple terms, it’s about removing friction that can slow down the sales cycle through streamlining all sales activities from lead generation to managing post-sales customer success. This approach to marketing and sales operations reduces inefficiencies in your sales organisation and greatly optimises the use of available resources, whether it’s people or technology. Learn more about sales streamlining to start applying these principles into your organisation directly.