The SAAS Sales Cycle is Lengthening–what you can do now!

When the Gartner ITxpo starts highlighting a product market topic, it is a good indication that the topic is going mainstream. This means your market is growing and the industry analyst community will get involved in the buying process, which will slow down the sales cycle (and probably already has)!

The SAAS delivery model seems to be reaching this milestone, which is both good and bad for SAAS providers who sell to the enterprise. Good – because your market is growing; bad – because your sales and marketing approaches need adjusting and your sales cycles are getting longer.

Robert DeSisto, a Gartner analyst, has a list of cautions to SAAS buyers at the Garner ITxpo. They include:

  • You don’t save money with SAAS
  • Inflexible contracts
  • SLAs that are “all over the map”
  • Possible lack of disaster recovery
  • Some SAAS providers may be using other XAAS providers, which complicates things
  • Security and governance implications for multi-tenancy
  • Issues with integrating and maintaining integrations with enterprise systems
  • No SAAS policy in the enterprise
  • Ability of business units to “go around IT entirely”

The point is not whether these are good issues or not (they all seem to be issues, btw), but rather it is an indication that the industry analysts and other advisors are entering the buying cycle, and as a result the buying cycle will lengthen for the larger buyers.

If your business growth strategies include selling to larger buyers, you can do some things about it if you are selling to the enterprise. At the least, consider these two major sets of activities:

1. Compile the list of issues and address them in advance, both by

  • ensuring your product management process is tuned in to address the issues AND by
  • ensuring your marketing and sales teams are armed with your specific approaches that address the issues head on and in a way that can be diligenced by the buyers and their advisors.

2. You also can and should take the time to brief/debrief the industry analysts and both get on their radar and ensure you understand and address their issues. They are key influencers in the buying cycle for larger companies and, therefore, are important to you!

In the short-term, this could help you in creating competitive advantage with selling to larger buyers and in the long-term you will face a competitive disadvantage if you don’t address these issues head on.

The more you are prepared to address the issues quickly and efficiently, the less your sales cycle will suffer an impact. Your sales cycle will continue to lengthen, but you can mitigate some of it.

Scott Maxwell
Scott Maxwell
Founder & Partner

As the founder of OpenView, Scott focuses on distinctive business models and products that uniquely address a meaningful market pain point. This includes a broad interest in application and infrastructure companies, and businesses that are addressing the next generation of technology, including SaaS, cloud computing, mobile platforms, storage, networking, IT tools, and development tools.
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