Are SaaS Deals Easier or Harder to Close Today vs. The Start Of The Year? - SaaStr Asked

August 25, 2022
OSF Exclusive

And I am curious about the answer myself.

I came across a poll on Linkedin by SaaStr, and it made me wonder…

I guess I should present the poll before talking about what I wonder.

Here it is:

Here is the original post

This post made me wonder, “I don’t think it’s possible to answer this question in the middle of the year… How long does it take to close SaaS deals anyway?”

Because I thought that investing in a SaaS tool means commitment, and while deciding on which competitor to trust, prospects can spend more than a few months, making it difficult to close a deal in a short period of time.

So I did further research. I found out that I was right and wrong at the same time.

Or, more precisely, my theory lacked an important detail: the size of the deal.

How long does it take to close a SaaS deal?

Thanks to Jason Lemkin, founder of SaaStr, I could learn how long it usually takes to close a deal:

$5K-$10K per year deals usually close in under a month, since they aren’t a huge burden to mid-large size companies and don’t require budgeting.

$20K-$50K per year deals take more than a month since both the cost and the internal structuring needs are higher at this stake. Depending on your product, customers could also ask for a paid Pilot period for such an investment, which will take a lot of time and effort.

$100K-$500K per year deals could require budgeting, and if you are trying to close the deal in the first or second quarter, you could have to wait for next year's budgeting. With that being said, this kind of deal can require more than six months, long demos, pilots, and discussions with all the stakeholders.

$500K-$1M per year deals are HUUGE deals, and it is not easy to close one of those - as well as catching such a big fish. Closing such deals can take up to a year, if not more.

With that being said, let’s get back to our main question:

Closing Deals Could Get More Difficult In Time

This is if you are going after the big fish I’ve mentioned.

You can see in the poll that not every company is having difficulties closing deals mid-year.

All in all, the second and third quarters of a year have the potential to have the lowest closed-deal count if you are closing bigger deals.

So what should you do? Change your pricing seasonally?


Change your sales reps?

Umm, definitely no.

What is it?

You should have separate representatives for quick deals and longer deals!

Your Sales Reps Have Different Strengths

Let me put it simply:

Some sales reps are better at quickly convincing people and closing deals immediately.

Some others are more durable and can better handle the stress of long-lasting, expensive deals.

Instead of treating them all the same and defining their success based on one specific metric, you should give them different responsibilities.

You should keep the same behavior while hiring them as well.

Here is another great source by SaaStr that explains why and how you should specialize your sales team.

So, why not start right now rather than deal with a big mess after a few years?