For many leaders in the tech sector, the past year has been a wake-up call. After years of rock-bottom interest rates, sky-high valuations, and a “growth at all costs” mindset, the realities of a downturn have been felt by even the biggest players in the space.
This reckoning has forced companies to drastically re-assess their strategies and recalibrate their operations in an effort to meet the demands of wary investors and a turbulent market.
After an industry-wide hiring spree, doing more with less is now a common theme, and challenge, for tech companies. Leaders are working overtime to identify the levers they can pull to shed costs without missing out on critical revenue streams. Reductions and restructurings have swept the industry, companies have re-evaluated real estate decisions, and tech-led IPO activity has dropped significantly. Even Facebook parent Meta has dubbed 2023 as the ‘Year of Efficiency’.
This shift has put a new level of pressure on sales and revenue leaders who are responsible for driving profitable growth forward. Just like consumers, business customers are tightening their budgets, focusing on the essentials as opposed to the ‘nice to haves’. That means traditional revenue streams are under threat, deals are smaller – or take longer to close – and shifts in the market have an immediate impact on open opportunities.
What should sales and revenue leaders prioritize to help this “rollercoaster” run smoother through the current market’s steep hills, fast drops, and wild turns?
Start by making sure you have the right processes and data sources in place to support your go-to-market strategy. It might sound simple, but you’d be surprised how many sales and revenue leaders – even in the tech industry – leverage an assortment of spreadsheets, static tools, historical data, and best-guess estimates to inform their quarterly plans.
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Static data drives static decision-making
One of the first pain points sales and revenue leaders need to address is their data.
Leveraging real-time data, in addition to historical first-party data and external third-party data, is now imperative to a business’s ability to understand and react to disruptions and stay ahead of excess costs. While consumer companies have leveraged external data to inform their sales plans for quite some time, many B2B organizations have been slower to adopt this strategy.
But with so much change happening at such a rapid clip, tech companies can no longer afford to rely on historical data alone. And without real-time data, businesses run the risk of leveraging outdated or inaccurate insights to guide their forecasts and plans.
Think about the ripple effect this could have on your push for profitable growth.
For one thing, leveraging outdated data to build your strategy will affect your ability to make decisions with confidence as a sales or revenue leader. This lack of confidence can impact the effectiveness of other key decisions across other areas of the business, from budgets and forecasts to investment strategies, hiring trends, and M&A activities.
Static data, trapped in spreadsheets and based on historical trends, will also make it difficult to stay ahead of or be responsive to shifts in customer behavior, which could lead to missed opportunities and challenges with retaining your customers over time.
In addition to an inability to pivot strategically, if you’re filling your pipeline with that same static data, you’re likely missing your revenue targets – or setting targets that are unattainable given current market conditions. Not only does this result in losses for your organization, but your sellers, who are highly motivated by their quotas and targets, will be discouraged and unproductive as well.
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Predictive data drives profitable growth
This is why real-time data and insights from external signals – often secured through predictive analytics and emerging technologies like AI and ML – are so critical to success.
Predictive analytics allow sales leaders to enrich their internal, first-party data with external, third-party data. This can include thousands of insights and buying signals from millions of businesses worldwide. Not only can you analyze accounts based on what you know based on historical data, but you can also analyze accounts based on critical external signals, like firmographics on revenue, employee size, buyer intent and online behavior, trends in HR, or insights on investments for IT. As a sales leader, you can use this data to score and segment accounts, augmenting internal data with predictive attributes and buyer intent data to target and prioritize customers with a higher propensity to want to buy from your organization.
Sales and revenue leaders can also use the power of predictive data to build and maintain sales territories that are relevant and fair and set quotas that consider the realities of the economic landscape. And with a stronger sales plan in place, leaders can help their organizations reduce excess costs by optimizing their resources, retaining top sales talent, and focusing their efforts on attainable revenue targets. Using ML and AI has helped AWS remain agile in the sales planning process, for instance, by giving sales groups the ability to choose an approach and algorithm that meets their specific sales planning needs. The combination of data-driven tools and predictive analytics has also helped Extrahop, a cloud-native network detection and response platform, identify high-propensity mid-market accounts, fill pipeline gaps, and guide more effective sales outreach and marketing activities, resulting in 3.8x larger average deal sizes.
As the tech industry continues to navigate a highly competitive, highly turbulent market, sales leaders need to have the right data on hand to capture revenue opportunities, improve forecasting, and align sales planning with sales execution. Forward-thinking leaders that leverage advanced intelligence and predictive capabilities will be better positioned to pivot quickly and effectively in this environment, helping their businesses overcome obstacles, drive profitable growth, and succeed during an uncertain time.
