Average Length of Time To Close Business
In our 2024 Agency New Business Report, 83% of agencies told us the average length of time to close business is 1-6 months, up from 75% in 2023.
And “more than 6 months” has dropped slightly from 18% last year (to 13%), which was the highest percentage since we started asking the question in 2020.
How does this impact your business development strategy?
What does this mean in practice for your firm, from a business development standpoint?
Initially, taking both these stats into consideration, it means the typical sales cycle has shortened slightly compared to the elongated time frames seen in 2023.
That’s good news, right?
But then we get some cold water dumped on us from this Ad Age story: 5 challenges facing agency leaders as 2025 looms
As M.T. Fletcher wrote an Ad Age piece this year, new business pitches are broken—they’ve only continued to get more expensive and dragged out. This continues to be a challenge for agencies heading into 2025.
Winterton said the pitch process has become so “prolonged.” Adam&eveDDB is in a pitch that was supposed to be done in six months—which have now elapsed—and there is not even feedback on what the outcome might be, she said.
Cold water indeed, but these are predominantly larger firms.
For a sizeable portion of you reading, you’re not typically in ongoing pitches, they aren’t the norm for small and mid-sized firms.
You’re typically in the prospect’s door with an initial project.
So that’s good news as well, but it means you’ll have to do what small and mid-sized firms don’t like doing, aren’t good at doing, or don’t have time to do (sometimes all three): nurture those leads to close.
Average Length of Time To Close Business is 1-6 months – now what?
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Establish realistic expectations
Adjust expectations and plan for a lead nurturing process of at least 6 months.
If the close happens sooner, fantastic.
As we point out in our report,
It’s understandably one of the hardest aspects of business development. Most agencies are not built with the business development mindset and flame out on an internal effort 3 or 4 months in, which we can tell you from our almost 19 years of experience in the industry, is not enough time to see the process play out.
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Tighten Up Your Lead Qualification Process
With more time spent on deals, you must focus on the right prospects out of the gate.
Create a snapshot of your ideal client, with all key parameters, which are, broadly: geography, title, vertical (or verticals) and company revenue. This is a form of pre-qualification that will help you avoid wasted effort on prospects that may never close.
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Build Trust Over Time
Longer deal cycles mean more opportunities to build relationships, especially for small and mid-sized firms.
Prioritize providing value at each touchpoint, through content and a personalized outreach.
Show your prospects what it’s like to work with you before they ever do.
And long-form content, a podcast, or video series are excellent ways to provide that value, but even a few sentences against a trend, article, or new tech will help you accomplish this.
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Improve Your Follow-Up Cadence
As the sales cycle extends, it’s easy to lose momentum.
Develop a clear follow-up strategy based on established timeframes ahead of time that keeps communication active without overwhelming your prospects.
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Also, Establish those timeframes
I mentioned timeframes above.
Do your utmost in that first meeting to set the second meeting, or at least a timeline for follow up.
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Preparing for and expecting deals to take time to close will keep you motivated and most importantly, keep frustration at bay.
(And you will still get frustrated at some point, but at least you’ll be more prepared.)
