It’s not your imagination—your sales cycle is getting longer. Let’s look at why.
January 29, 2025
By Rachel Smith
According to a SaaStr survey of 1,000+ B2B SaaS sales professionals, 58% reported that their sales cycles have gotten longer in 2024. This comes on the heels of a 24% increase in sales cycles in 2023 for the typical startup, as reported by Tomasz Tunguz.
For enterprise sales in 2023, Tunguz reported that the increase was even larger, at 36%. And, he says, startups selling to enterprise clients had a sales-cycle increase twice as large as that of mid-market and small-and-midsize-focused companies. A third of enterprise sales cycles took 50% longer in 2023 than they did in 2022.
Outreach reviewed its internal database to assess the average number of days deals remain in the sales cycle before closing. In 2020, their data shows an average length of 97 days. By 2023, this number had risen to 117 days. Even more interesting is how drastically that number was impacted by the deal size. Deals under $10k were open for an average of 85 days. Compare that to deals between $10k and $50k, which had an average sales cycle of 128 days. Purchases between $50k and $100k had an average sales cycle of 182 days, and deals over $100k closed in an average of 198 days.
Industry also has an impact on the length of sales cycles. Outreach found that software, business services, healthcare services, and finance had average sales cycles of 118, 126, 145, and 161 days, respectively. So, while the average B2B sales cycle length is reported by Geckoboard to be 102 days, if you’re selling expensive, finance-related SaaS to enterprise organizations, you can expect your sales cycle to be quite a bit longer.
I just threw a lot of numbers at you, but you can boil all of them down to the same conclusion—your sales cycle doesn’t just feel longer than it used to be. It is longer.
But why?
According to 6sense survey respondents in 2023, the average B2B buying team has just over nine members. Furthermore, 27% of buyers said there were more decision-makers involved in the buying process due to the current economic climate, TrustRadius reported that same year. It stands to reason that more people having to agree on a purchase would take longer than if there were fewer decision-makers, but it’s unclear how much the increased democratization of purchasing is increasing the length of the sales cycle.
Part of the reason for a longer sales cycle is the fact that there are more solutions for SaaS buyers to consider overall. The number of SaaS companies entering the marketplace has grown substantially just in the last year. In 2023, there were 30,000 SaaS companies. By the end of 2024, this number was expected to reach 72,000.
The average buyer considers four different solutions when making a purchase. When the number of solutions being assessed exceeds this average, each additional vendor makes the sales cycle two months longer.
An uncertain economy over the last few years has shifted the focus of B2B buyers. Expenditures require more validation—43% report that more information is needed to justify purchases in 2023 than previously, and 20% report requesting more demos than before.
A growth-oriented mindset has been replaced by a cost-savings focus. The return on investment needed to justify making a purchase is higher than it used to be. Buyers are looking for specific outcomes that can be quantified.
As part of a 2023 TrustRadius report, 39% of respondents disclosed that their software budgets had decreased compared to 2022. That’s part of the reason for the increased justification needed for spending. There is less to spend overall.
In a strong economy, organizations can afford to think about more abstract business concerns, such as whether a solution fits with future industry trends. Such concerns are now seen as a luxury, with price ranking as the number-one consideration. Not only is pricing a more heavily weighted factor—it’s also being questioned earlier in the sales process.
Forrester surveyed 18,000 buyers as part of its The State of Business Buying 2023 report. Of the respondents, 79% were classified as young buyers, defined as millennials and Gen Z. The remaining 29% were old (offense taken), belonging to the Gen X and baby boomer generations.
What does this have to do with the length of your sales cycle? Forrester found that younger B2B buyers were more likely to encounter factors that caused their purchase decisions to be stalled. Younger buyers have less experience participating in buying decisions, and so have less understanding of the buying processes within their organizations. A lack of understanding of each step in the purchase naturally leads to the lengthening of the process itself.
The same research found that major shifts in the market, as well as other external factors, had more of an impact on younger buyers. This implies that they have less decision-making authority overall. Remember, too, that the number of decision-makers is on the rise, so less decision-making authority makes the consensus-building necessary for making a purchase harder to come by.
Given how many factors are currently making the buying cycle longer, it’s not surprising that 89% of purchases stalled out in 2023. Time kills all deals. We know that delays during an already lengthy sales cycle are bad news. In fact, in HubSpot’s 2024 State of Sales Report, they found that 28% of sales professionals cite a drawn-out sales process as the biggest reason prospects back out of deals.
Some of the factors that are causing longer sales cycles are temporary or in flux. The economy will have its ups and downs. The younger buyers who don’t know the next steps of the purchasing process will gain experience. Other factors, however, are likely here to stay. Competition is not likely to drop. Buying teams are not likely to shrink.
Long sales cycles make momentum more important than ever. Like we always say, a deal in motion stays in motion. A deal at rest dies. This remains true no matter the length of your sales cycle.
Are you looking for ways to build momentum in your sales process? That’s our specialty. Contact us at mastery@maestrogroup.co.
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