How to Benchmark Your SaaS Sales Cycle - Just Digital - Digital Recruitment for Technology Companies

How to Benchmark Your SaaS Sales Cycle

How to Benchmark Your SaaS Sales Cycle

7th March 2018

How to Benchmark Your SaaS Sales Cycle

Whether you’re a SaaS sales rep, or in charge of managing one, it’s good to get a benchmark of success, right?


Depending on which studies you read, nearly 50% of sales reps don’t last past a few months. Is this to do with the SaaS sales cycle? Possibly.


To begin with, all sales reps need to know what they’re aiming for. Quotas can be flexible and adjusted at any time, sure, but ensuring your sales team can hit one is a marker of long-term success.


Here are some of the general benchmarks we’ve found by researching a bunch of different sales companies and articles. But remember – this is just a guideline. Each sales team and SaaS company will have different metrics and expectations.


Average length of sales cycle: 70-120 days


If your standard trial period in SaaS is 30 days, anything from 40 days to 120 days could be a reasonable SaaS sales cycle period. You need to get the customer onboarded, give them time to trial the product and then get them through sign-up, which could rely on their internal processes. Ideally, you’ll be closing sales as soon as the trial period is over, but realistically, this can take much longer.


Average customer lifetime


According to a study by InsightSquared, the average customer lifetime is 48 months, although this can differ depending on product cost from 35 months (product costs less than $1,000) to 64 months ($1,000 – $5,000).


Average SaaS sales conversion rate


According to Capterra, the average rate of a qualified opportunity turning into a closed sale is 27%. However, your SaaS company will usually have its own average conversion rate benchmark based on previous success.


Many SaaS companies also cite a conversion rate of less than 25% on any product that has a free trial as pretty low.


SaaS sales conversion rates by channel


An interesting study by Implisit in 2014 analyzed the pipelines of hundreds of companies to discover the channels that delivered the highest conversion rate. The findings were:

  • The highest conversion rate came from employee and customer referral – with 3.6% of leads converting to sales.
  • Lowest converting channels were lead lists, events and email campaigns – with less than a 0.1% lead-to-deal conversion rate.
  • Webinars tended to get a 2.5% opportunity-to-deal conversion rate.
  • 5% of leads acquired through the website converted to sales.


Things that affect the SaaS sales cycle:


  • Enterprise sales: The bigger the company you’re selling to, the longer the sales cycle. These contracts can become thousands of pounds (or even hundreds of thousands!), so they’ll be a scale of approval processes you’ll need to go through.
  • Higher price: Most SaaS tools are between the $9 and $200 mark. If yours is outside of this, your selling period could take longer.
  • Product scope: Having various products, or a customisable solution, can make for a longer cycle as it’s more difficult for customers to make an instant decision on what they need.
  • Disruptor tech: If you’re the “Uber of X”, then it may take you longer to close a sale, as people don’t know that they need you yet!
  • Annual sales: If you don’t offer a monthly pricing package, or you’re attempting to sell in annual packages, expect the sale to take longer.


Things that help reduce the SaaS sales cycle


  • Faster onboarding: The quicker your sales team can learn how to close, the lower the conversion rates become.
  • Upselling: It’s 4x cheaper to upsell to existing customers than acquire new customers, so this type of sale could reduce the sales cycle.
  • Product development: If you can break down the features or bugs that are stopping conversion, your conversion rates will naturally improve.
  • Synergy between teams: How well your sales team can communicate with your product and marketing teams will be a key factor in conversions.
  • The right hires: Reducing mistakes you make during the sales rep hiring process will help you get to a better conversion rate and faster sales cycle process more quickly.


If you’re ready to begin hiring your ideal SaaS Sales Manager, get in touch today!

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