Market Trends Drive Sales Technology Investments
Sales technology changes constantly and rapidly, which is why TOPO analysts continually gather data, talk to companies, and study the entire sales landscape to pinpoint the latest market trends. Considering how much of their budgets sales organizations spend on technology, it is crucial to have guidance about the areas of tech that are most important and what other sales leaders—especially competitors—are doing about them.
The following trends reflect the point of view of the TOPO analyst team:
The sales tech market has matured into very specific sub-categories. The sales tech market came out of the gate with an onslaught of vendors but limited categorization, making for a very confusing market. The market has settled into a set of well-defined categories, and early adopters in sales tech—who today drive the majority of sales tech spending—are focusing their purchasing efforts on these categories, creating significant growth for category leaders and the categories as a whole. Outside of the early adopters, however, the market still needs a lot of education on these categories. In qualitative buyer interviews, TOPO analysts often identify confusion and overwhelmed reactions from newer sales tech buyers.
Sales tech will see a large boost over the next two years as digital transformation comes to enterprise sales organizations. The concept of digital transformation has been a major force within enterprise IT for years, but its impact on sales has been limited at best. Whereas most sales organizations previously embraced these technical initiatives in fits and starts, many of them are now putting real muscle behind them. In some cases that means the creation of sales-specific IT and DevOps teams dedicated to building sophisticated tech stacks, wrangling complex data, and automating as many processes as possible. Many sales tech vendors are moving from SMB and mid-market into the enterprise space as buying activity picks up. As they do, vendors will have to respond to enterprise-specific buying criteria in areas such as compliance, security, and integration.
Aligned Sales and Marketing Tech Stack
Marketing, sales development, and sales technology are merging into an aligned stack. Many go-to-market leaders now prioritize creating better alignment across marketing, sales, and other functional areas, especially as more of them adopt a unified revenue-operations approach. In many cases, this means that the lines are blurring between different areas of technology, and we believe that a new view of the stack will emerge—one that addresses needs across marketing, sales development, sales, and customer success. This is already seen in critical pieces of the tech stack used by all functions, including the CRM and data platforms that feed it. As this trend grows, we expect it to have important impacts on buying behavior and the messaging required to address different groups within target organizations.
Sales productivity is an operational priority in 2020 and beyond. Data from TOPO’s Sales Sentiment Index 2019 shows that a major impediment that keeps sales reps from meeting quotas is having too many non-sales activities crowding their days. It’s even worse for sales development representatives (SDRs), who list it as their #1 barrier to success. High-growth sales leaders realize this and are doing everything in their power to remove these stumbling blocks, especially by deploying better technology. This is reflected in the ongoing investment flowing into sales enablement, conversation intelligence, and other areas that use automation and new features to streamline workflows so that reps can spend more of their time on activities that directly impact revenue.
As teams seek to leverage the promise of Artificial Intelligence (AI), they need better data. Most sales tech vendors report that they have AI embedded in their technology, but before AI can make a real difference, these tools and applications must have access to lots of high-quality data. While there is often a sufficient quantity of data available, sales organizations rarely produce data that is clean enough to be usable for AI. Sales tech won’t be ready for AI until sales organizations solve their data problems; this is a messy proposition for any part of a business, but even more so in sales given the dirtiness of its data. That said, many of the activity automation features hitting the market today serve the dual purpose of making sales reps’ lives easier and standardizing data by entering data on behalf of the reps (e.g., via activity capture). Conversation intelligence vendors will have a significant impact on data as they help organizations hoping to evolve from standard data capture for conversations to machine-driven updates. AI will come to automate mundane tasks, learn rapidly from sales conversations, and suggest next actions for reps to take. In the long run, as data improves, AI will enable new waves of intelligent applications to make life easier for reps. The challenge is getting there.
Reduced Seed and Series A funding has dramatically reduced the number of vendors entering the sales tech space. The sales and marketing tech stacks were fueled by significant VC investments in the space. Over the last two years, however, the flow of VC money into sales tech has decreased—with a corresponding decline in new ideas and innovation. Previously, a glut of investment in sales technology led to harsh consequences: the market became overcrowded, small players were gobbled up or closed down, investors lost money, and VCs grew gun-shy about making further investments. Today, there is VC investment, but that has been primarily in category leaders, especially in hot areas like sales engagement. In this landscape, less-funded startups have not produced as much innovation; conversely, mature tech categories have seen limited challenges coming from upstarts with bold new ideas.