The Daily Briefing - April 27, 2020 - How Productivity Is Impacted By COVID-19 & Turning It Around
On today’s Daily Briefing, Jim Benton was joined by Spencer Wixom, SVP of Marketing at Challenger. They discussed how sales leadership is supporting more deals, and what levers they consider indicative of a deal’s health. Here are the numbers: + Meeting volume up 3% week over week after being down the first two weeks of Q2. + Leadership involvement in sales calls went up even further last week, 7% week over week. Executive involvement is up +50% since before COVID-19. + We also saw 3% more leaders on the buying side, also with a trend towards more executives at 56% higher than before COVID-19. + First time in 7 weeks we’ve seen an uptick in 30-day payment terms. Still well below March levels, but an improvement + Reduction in pipeline, conversion rate, and deal value persists while sales cycle increases (Challenger data) *Meeting volume up 3% week over week after being down the first two weeks of Q2.* “This is exactly what we’re seeing,” said Spencer. After the markets reeled in early April, there was an uptick in meeting volume as sales teams adjusted. “We’re asking the Cotton Eyed Joe question: Where does it come from and where does it go,” said Spencer. The key to these meetings is to understand how much energy and effort is being expended to get them. “It’s about the engine,” explained Spencer. “We’re seeing that show rates are really low. We have to schedule more meetings to get the same amount of opportunities,” he said. “And inbound rates are a lot lower.” *Leadership involvement in sales calls went up even further last week, 7% week over week. Executive involvement is up +50% since before COVID-19. Jim and Spencer were excited and grateful for the role leadership is increasingly playing in deals.* “We really have to hand it to our leaders for really stepping up,” said Spencer. “My hope is that we recognize we have to really support our account managers right now. We are going in and creating the opportunities and buying groups from the ground up. Managers and senior leaders are managing and coaching around that gap. *First time in 7 weeks we’ve seen an uptick in 30-day payment terms. Still well below March levels, but an improvement* Spencer and the team at Challenger have been asking sales leaders about their involvement in payment conversations. “A few weeks ago, it was less than 20%. Now it’s 50%,” he said. “People are waking up to the fact that they have to be actively managing this element with their customers.” It’s more important than ever before that sellers articulate and identify themselves as essential. Not just for maintaining, but also for growth. “It’s not just about conserving cash,” said Spencer, “you need to generate cash.” If your solution helps a company generate capital, and you can articulate that clearly, you’re in a good position. Now that leaders are so common on calls, where does the relationship fall? Spencer and Jim both shared that they believe there’s a delicate balance between being on a call to support it and taking over. “We have pre-call conversations to identify the role of account manager and sales leader in that relationship. We’re not just handing that relationship over to the executive,” said Spencer. Every deal is a top to top deal. But take care that the account managers are able to handle the deal moving forward. “If you diminish that role,” said Spencer, “productivity will be pulled down.” *Reduction in pipeline, conversion rate, and deal value persists while sales cycle increases (Challenger data)* Spencer and the team at Challenger have been running a poll over the past few weeks, gathering insights from sales leaders. They have seen a significant amount of change since they began surveying. “We wanted to dive deeper into the sales velocity question,” said Spencer. “What’s changing around the conversation and the various levers. If they all change at once, they can create a big hole preventing you from hitting your targets.” The data tells us a few interesting things: A vast majority of leaders, across industries, see a 5% or greater reduction in pipeline opportunities. This supports the theory that fewer buying groups are forming on their own, giving less established demand for sellers to respond to. A majority of leaders see deal value holding steady, but a large minority see a decrease. Some companies have the ability to discount and others do not. Some need to discount, some do not. All in, not as concerning as the number of opportunities. Changes in conversion rates are like changes in # of opportunities. Most see this falling by 5% or more. It goes without saying, experiencing both a volume reduction and a conversion rate reduction simultaneously can wreak havoc on your revenue forecast. The length of sales cycle is a mixed bag. If your solution is deemed essential, yours will likely go down. If not, it will likely increase, but the vast majority feel it will change in some way.