Outsell Q3/Q4 Sales Benchmark
Once again, we ran our quarterly sales benchmark and industry performance remains sluggish. On one hand we heard at the Outsell Signature Event, the economy remains strong, particularly in the U.S. Inflation is being wrestled to the ground, and the general climate is OK. Yet once again, this quarter, the halo of a good economy isn’t showing up in sales performance.
Only 3% of respondents are above plan with 56% being below plan. You could argue 41% at plan is OK but I’d say meh is more like it. Customer energy remains a concern and slow decision-making seems to be some sort of new normal. Talent shifts have stabilized.
We are seeing more focus on cross-sell/up-sell, as well as outbound efforts ramping. Sadly, 33% of respondents, (compared to 4% last quarter) are trying targeted discounting.
Ugh — the D word.
That one sends shudders up my spine. Our industry’s pricing is perennially too complicated, our channel management writ large is an abomination, and now a rise in discounting. This is not good.
Outsell corporate partner, Christine Rogers and her firm M3 Learning, expert in sales along the value-chain — data, information, analytics, workflow, content-enabled SaaS, pure SaaS, is seeing this across the board too. Our findings mirror her findings. Why? Reorganizations, consolidation, budget loss or redeployment, new decision-makers without any history of doing business with us all are playing a part. Did I say re-orgs??? You get the picture.
We are also hearing about budget pockets that used to be at a rank/file level now resting two or three layers up. ‘Lower level’ folks are not the decision-maker anymore and this too is wreaking havoc on our sales cycles and adding to their lengthening. Throw in more people involved in the sale and de-risking decisions by adding more people to the mix and it’s a perfect storm.
Riffing with some colleagues yesterday we discussed ‘root cause’. What’s different? Sure, there are sector changes — open access in scholarly communications putting pressure on revenue, or B2B media companies, a sector that has a lot of PE ownership, unable to exit, and so cost mitigation becomes the norm. But it feels more universal. There are high growth sectors — financial, legal, risk, pharma/bio, but they too have pressure as buyers there show the behaviors. What’s different?
This is the first time they are operating in inflationary times, with high interest rates, with the threat of AI changing investment strategies, amidst a torrent of geopolitical uncertainty — and that’s putting it mildly. Add elections in many major economies this past year and it’s a perfect storm amounting to the behavior called watch costs and sit tight.
It’ll change — the pendulum always swings. But for now, Christine says monitor sales deals for three things or there is “no deal!” 1) Causality, 2) Decision-Making Process, 3) Outcomes (those wanted; those to be avoided) every person in the conversation seeks.
If a sales rep can’t answer those three questions “there is no deal.” Teach the team to go deeper. We also had a good chuckle over the role of the sales engineer and ensuring they are in line. We are back to basics in our sales functions and the market is showing us that in spades. Focus on assessing and fully understanding the size and scope of the client’s problem. Address their pain points directly in your proposition, optimize the early stages of the sales cycle, and consider the perspectives of all decision-makers involved. Preserve the product’s value by minimizing or avoiding discounts. Once the deal closes, continue delivering value throughout the year, as renewals begin from day one.
To participate in the next quarterly update which will have some year-end and year ahead updates too — email Michael at mdziekan@outsellinc.com to join the program.