Selling to Employers: Average Sales Cycle Length (Part 6)

Understanding components of annual decision making processes for employers and all of the stakeholders at the table can help manage sales cycle variability

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This article is part of a six part series written by Ryan Russell at HTN sharing his learnings on employer sales. Click the links to jump to any of the other articles in the series:

Overview | Employer Primer | Qualified Opportunities | Average Deal Size | Win Rate | Sales Cycle

Introduction

The employer sales cycle is long and the majority of that time is spent on stakeholder management, getting different parties bought in. And when the decisions involve employee health benefits, all stakeholders have both professional and personal opinions as, they too, are employees who will potentially be using the benefit. This dynamic makes it hard to stay in control and can create lots of idle waiting if you aren’t keenly aware of where you are in the sales cycle. 


Variability in Sales Cycles

Depending on what you are selling, employer sales cycles typically range from 3 to 24 months. The variability exists because where you fall in that range depends both on what you are selling and employer size, as we discussed in the Employer Primer article. Offering a product with little immediate budgetary impact, minimal implementation effort required and/or to a smaller employer with fewer decision making processes? Shorter end of the range. Putting in a new health plan at a large employer? You’re likely looking at 9-24 months. Why? 

Let’s look again at the employer decision making process but this time layer on the vendor sales cycle activities. As a reminder, this view is based on an Employer Purchase Cycle centered around Open Enrollment (OE) dates. If you sell off the OE cycle, then you are applying the majority of these boxes to the overall budget planning cycle. It is important to ask early on what the decision making process would be for your solution.


You can pretty quickly see how a sales cycle can turn into 18 months or more. The stars need to align to go from first meeting in October to socialization in March/April to a “Go” decision in July to begin implementation for that coming Jan 1 effective date. If you miss the red star or the year end meetings for an individual employer, there is very little time to get through their entire decision making process.

The sales cycle for smaller companies is a bit more truncated and follows a bit more delayed schedule that is led by the brokers – see below:

The important part here is making sure your partnership activities with the brokers are completed in time to have them get you in front of their clients and prospects. While the decision making process may be shorter, the lead time until next year’s sales cycle remains the same if you miss it this year.


Leaning in to Stakeholder Management

As for stakeholder management, it again depends on the product and size of the company. For large employers that get fairly involved in employee care delivery (vendors of health plans, PCP or specialty clinics, digital therapy, etc..) it’s a pretty extensive web that typically starts with the benefits leader and that person’s team. 


Each party plays a different role that you need to be able to service. There are also circumstances in which the consultant will play gatekeeper to the benefits team.  This can make it hard to really know what the employer needs are but it highlights the importance of 1) developing a strong trusted relationship with that consultant and 2) using the time really well when you do get the benefits team live.

The smaller / mid-market companies typically have fewer stakeholders just by the nature of their size and the broker likely sits at the center, at least to start.


So what does this all mean in terms of shrinking the sales cycles? 

You will want to make sure your organization’s planning cycles align with the benefits sales cycle at the employer you are selling to. Here are some of the things you should be thinking about:

Marketing strategies / campaigns: Your organization’s ability to generate inbound leads will greatly dictate the sales speed and momentum you generate. You definitely need the content and channel strategy to reach your target audience, but the timing in which those strategies are planned and activated is crucial. 

Key questions:

  • Which employers and brokers/consultants are you targeting?
  • Does the development and release of your marketing campaigns jive with when benefits folks will actually be coming up from air from steering committee decision-making or open enrollment? 
  • Are you getting in front of prospects after they’ve already made decisions for the year? 
  • What conferences or benefits forums will you take part in? And how much budget are you going to allocate for sponsorship vs. just attending? 

Broker/Consultant incentives & partnerships: Your selling partners also operate by getting ahead of the employer benefits cycle so you need to ensure your partnership planning is aligned with their timing to get back in front of employers.

Key questions:

  • Have you aligned on the types of brokers/consultants you want to work with (back to segmentation)? 
  • Do you know what you are trying to incentivize in arrangements with them (broad education/awareness vs. exclusive sales)? 
  • Have you executed the agreement before the core selling season begins? 
  • Are you educating the consultants & brokers before the selling season? 
  • Have you developed a real relationship with your selling partners in time? Once you are engaged with a consultant or broker – try really hard to work with them as a true partner. Their job is to make things easy for their clients – so if you help make their job easier with strong two-way communication, seeking advice, providing a heads up on good news and bad news, they can help make the sales process go much smoother as well as advocate for you with other clients.

The point here is that any planning you are doing needs to be in reference to getting ahead of the benefits sales cycle, which for better or worse, exists. If you can do that effectively and coordinate the activities above, it can help shorten the sales cycle for your organization.


Conclusion

That concludes our section on average sales cycle length. By thoughtfully planning your internal activities against the decision processes of the employer and really leaning into making stakeholder management as easy as possible for your benefits contact (or broker/consultant partner), you can work to decrease the denominator in the velocity equation. 

So, if you’ve now read each article, it was a lot. And even if you don’t agree with everything (or anything) in here, the point is to give you a framework based on a metric to help trigger new thoughts on how to track, test and improve your organization's sales efforts with employers. Happy selling!


If you want to go back and check out other articles in the series, here are the links:

Overview | Employer Primer | Qualified Opportunities | Average Deal Size | Win Rate | Sales Cycle