Is the Technology Sales Cycle Getting Longer?

Many channel partners have seen the technology sales cycle lengthen in 2023 due to a confluence of macroeconomic concerns, “bloated” vendor stacks and questions about hybrid work.

Building a technology advisor (agent) practice has always been a patience game. Partners spend years building up their base of recurring revenue from residual commissions. They receive those commissions after the suppliers they sourced have installed the technology and billed the customer. In the meantime, partners engage in ongoing, often multi-month engagements with customers to determine their needs and find the right technology solutions for them.

And for many of those partners, those engagements have been taking more time in 2023.

ATC chief technology officer Nick Enger oversees the technology advisor’s consultant and support teams. For the Ohio-based company, sales has always functioned cyclically, with December usually generating the most deals and and implementations of those projects taking place in the first half of the next year.

Technology Sales Cycle: Reasons for Lengthening

ATC’s Nick Enger

But Enger said the technology sales cycle has taken longer in 2023 compared to previous years in terms of new customers. While existing customers have proven a steady source of ongoing deals, Enger said new logo sales are 10-15% lower year-over-year in 2023. And that’s not for lack of interest. The pipeline is as wide as it has ever been, ATC managing partner David Goodwin told Channel Futures. But it has been stretching out.

Enger, who participates in a peer group with other established technology advisor leaders, said his peers are reporting a similar slowness in customers for the first half of 2023. And an obvious culprit was the concern IT purchasers felt about the macroeconomy.

“The first half of the year was plagued with uncertainty surrounding interest rates and inflation that seemed to leave clients paralyzed from making decisions,” Enger told Channel Futures.

However, partners tell Channel Futures that they see the technology sales cycle moving faster. ATC has recently closed multiple large deals in quick succession, and Enger said the company expects to hit its target for 2023 monthly recurring commission sales.

“We have since seen those budgets loosen, and decisions are starting to get made,” he said.

Avant’s Alex Danyluk

Alex Danyluk, chief strategy officer at tech services distributor Avant, sees aggregate sales data from the technology advisors that work with Avant. His assessment lines up with Enger’s — while economic uncertainty did cause a slowdown, the sales cycle is speeding up.

“We’re seeing the pipeline clearing. Now, that means the sales cycles were longer because they kicked the tires back at the end of last year. But I’m bullish on the future based on what we’re seeing on the trendline,” Danyluk told Channel Futures.

CXponent CEO Joe Rice engages with businesses about contact center projects, among other technologies. He’s also seen a lengthened technology sales cycle this year. And budgets didn’t play into that delay.

“We haven’t anyone say, ‘We have no money to spend here.’ I think there are external pressures to be more efficient. But I’m pretty optimistic,” Rice told Channel Futures.

CXponent’s Joe Rice

Rice and other channel partners shared what they’re seeing in their pipelines. Not all of the partners we interviewed agreed about the state of the sales cycle. Some say it has remained the same year-over-year. Others noted that they define and measure the technology sales cycle differently.

To read everyone’s observations and learn some best practices on attacking enterprise sales, scroll through the 13 images above.