The SalesLoft Funding and What It Means for Sales Technology
SalesLoft announced that it has raised $10M in venture funding this morning. SalesLoft CEO, Kyle Porter, published a post that provides a lot of details on SalesLoft’s fundraising process. It’s a major milestone for a company that is seeing tremendous growth in annual recurring revenue (ARR) – the holy grail of successful SaaS businesses. The SalesLoft funding, however, isn’t the only major sales technology event of the last few months. Over the last quarter, we’ve seen a spike in sales technology investment, both in terms of total capital invested and number of deals. Most importantly, the TOPO Analyst team has noticed a significant uptick in sales technology adoption by end-user sales organizations. This uptick is seen in the data we collect from sales (and marketing) organizations, as well as the number of client inquiries our Analysts are fielding.
We believe the SalesLoft fundraising is yet another indicator that the sales technology market is experiencing rapid and accelerating growth. There are dozens of dynamics that are driving the sales technology boom. To simplify things, we group these drivers into three categories:
- Changing buyer behavior
- Modernizing sales organizations
- SaaS technology vendors
These drivers are converging to create a perfect storm for the sales technology market. In this post, we’ll analyze each of these categories and explore what they mean for the sales technology market.
Changing buyer behavior makes sales’ job harder than ever
If you work in sales and marketing, you know that buyers are changing. More specifically, an abundance of digital information makes it harder than ever for sales to successfully engage buyers. To manage this shift, sales organizations need to account for a handful of dynamics when it comes to targeting and engaging prospects:
- The abundance of digital information means that buyers have less time to spend with sales. Many really smart internet-thinker-types call this “attention scarcity”. It just means that buyers are harder to reach and have less time to spend with sales people.
- Buyers have access to an unprecedented amount of information thanks to the internet. Whether it’s product reviews or comparison pricing, the internet has vested power with the buyers. Furthermore, in most markets, buyers now have access to more product options.
- Finally, buyers are predominantly online and demanding high quality digital experiences from sales organizations. We’ve seen this shift take place in marketing over the last 10 years, but now it’s about sales as well. In fact, a growing body of data shows that buyers don’t want to meet sales in person.
To overcome these challenges, sales organizations must use technology to create high quality, predominantly digital experiences that will attract and engage buyers. It may sound obvious, but what the buyer wants is a key driver of sales technology adoption.
Sales is modernizing and striving for scalable growth
Sales is modernizing. Sales modernization is really about a shift from non-repeatable growth (we call it “hero sales” when a company’s revenues are growing, but can’t repeat the sales patterns and behaviors that drive that growth) to scalable, predictable growth. The modern sales movement is everywhere:
- No where is sales modernization more evident than in the move from field sales to inside sales. By 2017, we predict that of the 14.4 billion hours sales reps will spend selling, 12.4 billion will be spent on inside sales. That’s nearly 2X increase in inside sales time and a 65% reduction in field sales time.
- The data we collected as part of our recent sales benchmarking survey shows a tidal wave of standards being adopted by sales organizations in areas like sales process, plays, metrics, and organizational design. You can learn more about these sales standards in this post, but they are a key driver of the scalable, repeatable growth that modern sales strives for.
- Finally, modern selling is also about using data to measure and optimize the performance of the sales organization. The gut instinct of the sales leader or sales rep is no longer sufficient given the amount of data that’s now available to sales teams.
Technology is a key enabler of modern sales organizations. It allows companies to move to an inside sales model, adopt and enforce sales standards in areas such as sales process/plays, and provides data to make better decisions.
The cloud changes everything about how sales uses technology
Cloud computing has experienced significant growth in recent years. In March, The Bessemer Cloud Index was tracking 42 publicly traded cloud computing companies with approximately $175 billion in aggregate market cap. In the sales technology market, SaaS is changing how sales teams adopt and use technology:
- Sales technology isn’t just about CRM anymore. Vendors are shipping products that automate key plays in the sales process and allow sales to deliver experiences that drive revenue. The market is rapidly moving from using technology to capture data to using technology to accelerate revenue.
- SaaS vendors are building products that sales people actually want to use. Historically, sales rep usage has been the third rail of sales technology adoption. High quality user experiences are becoming the norm with sales technology products and helping to drive day-to-day usage by reps.
- SaaS delivery models and economics are also making it easier for sales organizations to trial and adopt technology. It’s easier and less costly than ever for companies to run small pilots and track results over a multi-week or multi-month period to see if a specific technology delivers a measurable business result.
In a nutshell, technology vendors are building products that sales people actually want to use. That’s in stark contrast to the last 20 years of sales technology adoption, when the vast majority of sales people viewed technology as an encumbrance, rather than an enabler.
At TOPO, we believe the sales technology market is just getting started. We’re on the front end of a wave of sales technology adoption and investment that will transform how companies sell over the next 10 years.
About the author: Scott Albro is the CEO and founder of TOPO. TOPO is a research and advisory firm that helps companies grow revenue faster. We do this by identifying the patterns, plays, and behaviors that drive exceptional revenue growth. It’s this data that helps our clients (the world’s fastest growing companies) enable their sales teams to drive more leads, higher conversion rates, larger average deal sizes, shorter sales cycles, and lower churn rates. The result? Our clients grow 2X faster than the competition.