Is the Golden Age of sales tech coming to a close?

Is the Golden Age of sales tech coming to a close?

Published: Wed, 07/06/22

July 6, 2022

TOGETHER WITH

Welcome back. It’s the first week of the new quarter, and the Wednesday after a long weekend, so the cumulative number of calls made by salespeople across the globe is in the low four digits. In this week’s edition of The Quota, we’ll take a look at the future of sales tech now that funding has dried up, find out how many salespeople have been judged for their profession, and give some advice to a manager who has a hard time controlling their anger. Let’s go.

NUMBER OF THE WEEK

40

Sales reps can spend up to 40% of their time looking for someone to call.

Source: Inside Sales

SALES ROUNDUP

Here’s what’s happening in the sales world this week:

The United Kingdom has just launched the world’s largest 4-day workweek trial, with more than 3,300 workers participating across 70 businesses in the UK, from small firms to major players. But one sales consultant says that when it comes to salespeople, the 4-day-a-week experiment is likely to fail. You can read about his reasoning here.
According to estimates, U.S. auto sales dropped sharply in the second quarter, as automakers continue to deal with supply chain problems, declining consumer sentiment, and rising interest rates. The one bright spot (for automakers): profit per-vehicle remains high. You can read the report here.

FEATURE

Is the Golden Age of Sales Tech Coming to a Close

Remember when everyone thought that the 2020s would be the roaring 20s all over again? It really did seem like that at first, especially when it came to tech – investors poured a whopping $630 billion into venture capital-backed businesses in 2021 alone, double the investment levels of 2020.

The sales tech industry benefited immensely from this trend, with investment increasing from US$1.8 billion in 2020 to over US$4.3 billion in 2021. Interest rates were low, making it easy to borrow debt, and cash burn was high, driven by companies attempting to scale quickly to pursue market share. Tech valuation soared, leading to more investment – it seemed like the party would never end.

However, the roaring 20s everyone hoped for might be over before they even began. Continuing Covid lockdowns in China, the war in Ukraine, and lingering supply chain issues have driven inflation high and commodity prices higher (see: your local gas station.) And according to a recent article in Forbes by a Forrester analyst, the resulting economic and socio-political climate has resulted in both challenges and opportunities for investors, providers, and buyers of sales tech.

Challenges and Opportunities for Sales Tech Investors

Both venture capital and private equity funding have slowed due to the recent changes in the investment climate. Fund managers, more concerned with risk reduction, profitability, and cash flow, are becoming more discerning with their investments. This means less sky-high valuations, and more difficulty raising money for sales tech startups.

But as the number of deals decreases along with competition between funds, investors have more influence in the companies they support. They’ll still want to invest in sound companies, but investment terms will be more minutely negotiated than before, given the increased risk.

Challenges and Opportunities for Providers In Sales Tech

Not only will sales tech providers face bigger funding challenges in private markets, they will likely see a decrease in demand for their products as their clients experience the same economic squeeze. Growth expectations will need to be reevaluated, as finding and converting customers may take longer. Operating costs may be squeezed as well, as startups attempt to expand their cash runway to 18 to 24 months in the hopes that the funding climate will be more friendly by then.

However: experienced sales tech providers, flush with cash from last year’s late-stage funding rounds, may be able to extend their cash runways while eyeing previously unavailable acquisitions. Both Mediafly and Clari have completed acquisitions (ExecVision and Wingman) this quarter, demonstrating confidence in expansion of certain platforms. It’s expected there will be more M&A (mergers and acquisitions) activity in the coming quarter.

Challenges and Opportunities For Buyers Of Sales Tech

In a climate where B2B companies, both public and private, will face financial challenges, the pressure will be on for owners of sales and marketing tech to demonstrate the value of the products they have purchased to company leadership. This means that those in charge of buying (and managing) tech in these functions will have to demonstrate the value and ROI to their management teams, as companies eye cuts to redundant or unnecessary purchases.

On the flip side, this uncertainty creates an excellent opportunity for tech revenue and stack owners to assess and optimize their tech portfolios. The useless (or overpriced) tools are likely to get cut, while the tools that provide real value will remain – not necessarily a bad thing for overworked sales reps who are tired of being forced to use redundant tools that don’t offer them much help.

Sales Tech Demand Shows No Signs of Slowing

None of this changes the fact that sales tech is still in demand, but there is likely to be a shift to a “do more with less” attitude, especially in B2B organizations.

Providers that can clearly communicate their value proposition, adapt to changing environments, and solve challenges for customers are in a good spot. Meanwhile, the tech companies that have oversold their capabilities or overextended themselves thanks to easily accessible investment funding are likely to struggle to come out safely on the other side.

TOGETHER WITH ROCKETREACH

The benefits of implementing a successful sales development team are powerful.

A sales development team can increase ROI by booking more meetings, increasing the number of opportunities in your pipeline, cutting out the noise of lousy inbound leads in your AE’s names, and much more!

But they can’t do that if you don’t set them up for success.

Before you get in your head or begin posting your sales development jobs, you must understand The 5 Biggest Mistakes Leaders Make with Their Sales Development Program and how to avoid them!

We partnered with Tenbound, a Sales Development powerhouse, to deliver you this guide.

It’s free, and there’s no form to fill out. Seriously, check it out!

MEME OF THE WEEK

Source: Instagram -- Sales Humor

QUIZ

Which actor sold coupons door to door before getting his big break?

A. Chris Pine
B. Chris Evans
C. Chris Hemsworth
D. Chris Pratt

SALES FAILS

Each week, we bring you the most cringe-worthy sales moments from across the web. To submit your sales fail story for consideration, click here. (Don't worry, you'll remain completely anonymous).

“The most embarrassing thing that’s ever happened to me in sales was when I was working in the mortgage industry a while back. At the end of the month, there was always a mad scramble to close loans, and since most people scheduled their closings toward the end of the month, it was always a pretty crazy last few days.

During one of these end of the month scrambles, I was waiting on an emailed verification of employment from one of my customer’s employers. The loan was set to close that evening, and it was the remaining outstanding condition they needed to satisfy in order to get underwriting to sign off and allow the loan to close. To make things worse, their rate lock was about to expire, so if they didn’t close, the whole deal would blow up – it was a mess.

Anyway, I was helping my processor get the verification, and I finally got the person who needed to fill it out on the phone. She was very nice and promised to email it over within an hour. It was almost the end of the day by that point, so I knew that if she didn’t send it before she left to go home for the night, we would be screwed. So I confirmed with her multiple times that she would send it over.

So an hour goes by, and no verification in my email. So I start freaking out and calling her direct line (which she had given me earlier) over and over, but it keeps going to voicemail, and I start leaving increasingly desperate messages. Finally, I am calling over and over and over again, and no one is answering. To make matters worse, I am getting calls and emails from the closing attorneys, the customers, and my sales manager (LOL) asking about this thing that everyone is waiting on.

Finally, I lose my temper, and write a really nasty email to the woman who was supposed to send the VOE. I tell her she’s unprofessional, that she doesn’t care about her employee’s well being, and that I hoped if she were ever in this situation, that her boss would be more professional and less selfish than she was. But still, no response. By that point, I was on the verge of tears.

Then a thought occurred to me. I went back into my email, moved the mouse over, and opened the spam folder. Lo and behold, the VOE was waiting there – it had been sent about ten minutes after she and I had spoken. The deal closed a little while later, and I sent a long, apologetic email to the lady. The next day, she responded with two words: “It’s ok”

Anonymous Connecticut

GRAPH OF THE WEEK

Source: Instagram Poll -- July 2022

WORTH A PEEK

If you’re a fan of sales movies and don’t mind something that’s a bit (actually, it’s more than a bit) weird, then check out Sorry to Bother You, which is available to anyone with a Netflix account. The movie tells the story of a telemarketer who climbs the corporate ladder, until things get, well… uh… really strange. If you have an active imagination, you can check out the movie here.

ASK THE QUOTA

Want to submit a question and be featured in our advice column? Click here. (Don't worry, you'll remain completely anonymous).

Dear Quota Team,

I’m a sales manager who manages a team of about seven reps. We’re an inside sales team, and I close deals myself too, though my pipeline is smaller than what’s expected of my reps. I don’t think I ever really thought much about becoming a manager until I was promoted, but I am happy to have been promoted and want to do the best I can to make my team a success.

There’s something that I’m finding really difficult about the job though: I get really angry when my reps aren’t doing what they’re supposed to be doing, or when we’ve agreed on a specific approach, and they don’t follow through on what we’ve discussed. I know I can’t control them, but I just don’t see what’s so hard about doing things the way you’ve agreed to do them.

This also extends to things like calling out or trying to cut out of work early on days they haven’t put in much effort. I know when they’re being lazy and I try to be fair with them and empathetic, but if one of my reps calls out when I know he went out drinking the night before (or something like that), it makes me so mad because I know they’re not taking themselves, or the job, seriously. Like I said, I am trying my best, but is it normal to get this angry when your reps don’t want to step up?

Angry in Virginia

--

Dear Angry,

Probably one of the most difficult aspects of leadership is influencing people in such a way that they want to do things, rather than feeling forced to do them. It sounds like you recognize this fact, but are still having a hard time accepting their autonomy.

Try to control your emotions. Your anger accomplishes nothing – or at least nothing productive anyway – and only makes your life and time at work more miserable. Rather than letting your emotions get the best of you, try to focus on solutions: things that actually make a difference, like coaching, support, and making sure they have everything they need to succeed.

Give your reps your trust and a little bit of freedom – studies show that this is what employees want most. But if you hold up your end of the bargain, then they need to hold up their end as well. If they’re hitting quota, then there’s really no reason to get upset with them about how they got there (assuming they’re not doing anything illegal, unethical, or anything that could paint you or the company in a bad light). But if they’re not hitting quota, then you need to work with them a bit more closely, not through rigid demands, but through solid, practical leadership.

There’s a right way and a wrong way to check your reps. And if you can’t control your anger, then you’re definitely going to come off the wrong way. It’s okay (and even a requirement of your job) to speak up when things aren’t being done the right way, but you’re better off finding out what motivates each individual rep, and discovering how they prefer to be coached and what types of conversations will elicit a positive response, than by getting angry or not saying anything because you assume you have no say in how people should act.

It’s a tightrope for sure, but make sure you’re not coming from a place of negativity. Not only will it backfire, but it’s a pretty miserable way to go through life. Good luck!

Quiz Answer: D – You can read the source article here

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Today's email was written by Ken Kupchik, Erica Furgiuele, Steve Rado, and Emily Hill.

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