Why It Takes More Than a Year to Close a Big Customer

It took me about 18 months to close Google, for example. And that was just for the initial group of users:

• Need identification and discussions with project manager over several months
• About 6 on-site meetings to review need identification and discussion with a broader group
• RFP
• Prototype of workflow
• Ensure integrations could be connected to custom apps
• Wait for new feature to ship
• A 90-day unpaid pilot (sometimes, you gotta do one)
• Get through security audit
• Procurement cut deal size by 90%
• Throw up hands
• Sales saves the day, closes deal

That’s 18 months to first revenue. Then, another 18–24 months to scale up the number of seats, grow core deal size, etc.

You’ll get better at this over time, as your brand grows (=trust) and your sales team gets better at enterprise deals.

But there are limits to how much you can shrink sales cycles in six and seven-figure deals.  Especially in bigger deals that are budgeted. 

Welcome to the latest installment of our “What’s New” series where SaaStr founder and CEO Jason Lemkin sits down with some of the top leaders and founders in SaaS and Cloud to discuss What’s New and what should be top of mind for fellow founders.

In the new episode, Jason sits down with Drata CMO Sydney Sloan to talk about what’s new at Drata, the role of CMO at Drata vs. Salesloft, partner marketing, customer marketing, and more. 

This edition of the SaaStr Daily is sponsored in part by Adyen

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One of the most powerful things in SaaS is having a visionary founder-CEO.  Nothing against an outside CEO. Sometimes, the time comes to hand the baton to someone else.

But, but — only a founder CEO can execute a vision over 20+ years. Only a founder CEO knows the why. Only a founder CEO is always, forever, a founder.  Jobs come and go.  But whatever company you found, you are its founder forever.

So an interesting case study is Blackline. After an incredible run as a solo female founder, Therese Tucker moved to the board a few years back.  But when they needed that founder DNA, Therese came back last year.  As CEO again.

Blackline is one of the leaders in accounting software and invoicing-to-cash. But the ACV as we’ll see is small, and the competition is real.  Growth got tougher. They needed Therese back.

Gusto is a high-velocity, high-scale acquisition and expansion engine, and one we can all learn from. In a recent Workshop Wednesday, Tolithia Kornweibel, CRO, and Jamie Edwards, Head of Go-to-Market Operations and Tools, share how Gusto maximizes revenue so that you can do the same. 

Together they share the high-velocity techniques they use to maximize sales, including:

• Sell to SMBs
• Use round-robin to assign accounts, but you’re not sure if it’s optimal
• Are stuck in a world of geographic territories
• Spend a lot of time manually building territories

Gusto thinks of the rev ops capability as the brain center and engine builder. Their hope in sharing this model is to help fellow revenue professionals grow their businesses similarly. 

So lately I’ve listened to a few calls from churned customers from portfolio companies. It’s been a while since I listened to or talked to struggling customers.

On the one hand, arguably, their feedback is not fully representative of your customer base if you’re growing. If you’re growing, generally, you’re focused on a market or market segment that’s also growing. Not shrinking.

But these are strange times, where the overall U.S. economy remains strong, the stock market is at all-time highs, AI is fueling Cloud growth, and yet … many folks are cutting their tech budgets, and especially, those that sell to startups are struggling.

Last quarter, ZoomInfo grew 9% at $1B+ ARR, but its non-tech customers grew 20%+. That tells you their tech customers didn’t really grow at all.

So what have I learned listening to customer calls of struggling customers?

The hardest rejection I’ve had in sales was around renewals. Especially ones I thought we really had earned. But still lost.

In particular, in the early days of EchoSign / Adobe Sign, we had a particular manager at a strategic partner where I did everything I could to help him. We made nothing off this partner — zilch — but I did everything I could to help him succeed.

I built an integration when no one else would. I even flew to an event to help him, again for $0. He also had been to our home personally. A coincidence, but someone who I’d broken bread with on several levels and in several states.

He then joined one of our top logo customers as a manager. The next week, he called to tell us he was canceling the contract. We’d just done an NPS survey and found the team he had just inherited loved us. 100% support. Zero complaints. It was a game-changer for them. And no one there was asking for change management to learn a new vendor.

But … our competition was smart. They’d essentially bribed him. They’d already wined and dined him before he even started. They’d offered to do case studies with him and invited him already to their VIP Customer Conference. They’d also already invited him to a retreat in Napa. They’d offered to make him a hero. And he really didn’t care about the costs to switch vendors, or which one was better for his new team.

We lost this top logo customer, despite making everyone there insanely happy.

It hurt.

Champion change is tough. It’s risky. And when it comes, you gotta jump on it. If you don’t — the competition will.

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