Interactive Sales Benchmarks
See how your company stacks up against others in your industry by exploring our filterable Sales Performance Benchmarks.
Sales Cycle Benchmark Vary by Average Contract Size
Most everyone knows that sales cycles for low priced products are shorter than sales cycles for high priced products. Customers make purchase decisions faster for small ticket items than for large purchases.
Companies selling a low priced subscription, usually have a low touch, highly automated sales and marketing model, with a cost structure reflecting an inbound marketing model. Companies selling a high priced subscription, typically to large enterprises – not many SMBs will buy $100k+ subscriptions – usually have a high touch sales and marketing model with different costs than you’d have if you were selling to SMBs.
However, it makes a difference to your revenues and expenses if you can sell a large ticket item in 12 months or in 9 months. If the same sales team took 9 months on average to sell products, they could sell 25% more than doing it in 12 months, all other things being equal.
Let’s look at these this example of a benchmark for 2 groups of private, SaaS companies, with average recognized revenue of approximately $28M. At OPEXEngine, we define Sales Cycle duration as the number of days from the time that a Marketing Qualified Lead (MQL) is registered to the time of deal close.
How long, on average, does your sales team take to close a deal? The first thing you should look at is whether you have good data to calculate your average sales cycle duration. Then, looking at the chart above, you see that comparable companies are currently selling large subscription contracts in 6 months. The next step is to dig into what you can do to improve sales cycles.
- Which salespeople are closing deals faster than the others?
- What sales process do they follow?
- Can they identify the bottlenecks in the system that might be slowing down the others which they’ve figured out how to get around?
- Does everyone need better marketing materials or more qualified leads or better training to shorten the sales cycle?
The benchmark is a spur to action. A shorter sales cycle will increase revenues as you can close more deals in the same period of time without any additional expense.
The benchmark is a spur to action.
In the same way that high performance athletes are constantly benchmarking their performance, both in terms of final result, as well as by breaking down the component parts that go into achieving the final result, high performance companies use benchmarking to accelerate their performance.
At OPEXEngine, we track sales ops benchmarks with clear definitions like:
- Total sales expense and headcount
- Bookings per sales rep
- Quota achievement
- Sales ramp time
- Sales cycle
- Total number of Marketing Qualified Leads and Cost per MQL
- Total marketing expense and headcount
- Customer velocity
- Renewal rates
- Cost of customer acquisition
- Average Customer Lifetime Value
- And much more