So What’s the Typical B2B Sales Cycle Length?

January 28, 2019

This article is included in these additional categories:

B2B | Business of Marketing | Customer-Centric | Featured | Industries | Internal Collaboration | Lead Generation & Management

It’s commonly assumed that generating B2B leads is primarily a marketing responsibility. However, data stretching back to 2014 and published in a new report [download page] from CSO Insights, a division of Miller Heiman Group, illustrates that salespeople feel they’re consistently generating the largest share of leads.

On average, sales respondents in 2018 claimed that just over a half (52.6%) of leads were sourced by the sales team, with one-fifth (20.2%) coming from marketing. By contrast, 2014 saw that marketing contributed one quarter (25.9%) of the total. It’s worth noting that the almost 900 respondents to the survey came from the sales function, and previous research shows how opinions can differ between marketing and sales teams on demand generation quality.

How Long Do B2B Deals Take to Close?

An interesting question asked respondents how long the typical sales cycle is for new and existing customers. The results indicate that three-quarters (74.6%) of B2B sales to new customers take at least 4 months to close, with almost half (46.4%) taking 7 months or more. (See the above chart.)

In further evidence that organizations should be supporting retention efforts, sales cycles for existing customers are considerably shorter, with 60% of all deals closing in 3 months or less – and more than 1 in 5 (22.0%) taking less than a month to be signed off.

And while the most oft-cited priority for salespeople was listed as capturing new accounts, the average share of revenue coming from new customers came in at less than one-third (29.9%).

The focus on acquisition appears to be persistent, with previous research highlighting that such an approach is prevalent for “average” performers, despite it being cheaper to retain a customer than to acquire a new one.

That being said, this behavior may come down to the challenges associated with growing accounts. Only a third of the total respondents said their ability to penetrate other business units with existing customers met (29.8%) or exceeded (4.8%) expectations – a fact not surprising when 4 in 10 claimed that their ability to regularly and effectively communicate with their customers either was in need of improvement (35.9%), or required a major redesign (4.2%).

Are Marketing and Sales Becoming Less Aligned?

Returning to the oft-cited priority of lead generation, alignment appears to be an ongoing issue between marketing and sales teams.

More than 4 in 10 (43.0%) claimed that there was no agreed definition between sales and marketing on what constituted a lead, with just over one-quarter (27.3%) relying on an informal lead definition.

The situation for lead nurturing was much the same, with 35.3% stating that there was no agreed process, and 30.8% of the total having informal arrangements in place.

Previous data has shown that a broken process is the second most common challenge in achieving marketing and sales alignment.

But perhaps a more critical form of alignment comes between the buying process of the customer and the organization trying to close a deal. More than half (54.3%) of those who had a dynamic alignment to the customer’s path reported that closing new accounts was a strength, compared to just 8.2% of those with no process at all.

A summary of the results is available to download here.

About the Data: The CSO Insights 2019 report was based on a survey of 886 sales leaders around the world, fielded in Summer 2018. Respondent roles were made up of executive management (27.6%), senior sales management (33.2%), front-line sales managers (18.2%) with the remainder working in sales operations (7.7%), sales enablement (9.9%) and other functions (3.4%).

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