The Sales Enablement Technology Market Landscape: Predictions and Buyer Guidance
In our first post on sales enablement, we explained the optimal sales enablement stack and the trends influencing its evolution. In part two of the series, we focus on the market landscape, along with TOPO’s predictions and buyer guidance.
TOPO believes that the sales enablement segments listed below will converge into a single sales enablement platform. In fact, this consolidation is underway.
A VIEW INTO THE EVOLVING MARKET LANDSCAPE
Through sales momentum and acquisitions, sales content management providers Seismic (which acquired KnowledgeTree and SAVO Group) and Showpad (which acquired Learncore for continuous learning and Voicefox for conversation intelligence) are the market leaders in Annual Recurring Revenue (ARR).
The vendors whose primary focus is the continuous learning market, such as MindTickle and SalesHood, have signed on strong customers and developed positive use cases. That said, they face stiff competition from others, with many organizations choosing between sales content and learning, and to a lesser extent, from incumbent learning management system (LMS) vendors. The market is moving quickly towards end-to-end, multi-segment platforms and as such, we expect standalone continuous learning vendors to be acquired or acquire functionality in the other sales enablement segments.
Sales content management has been one of the more successful segments in the space (again, think Seismic and Showpad), positioning vendors to be the acquirers in the space. Founded in 1999, Brainshark has a long history in the space. Highspot’s recent traction was validated with a significant $60M Series D raise.
The real-time knowledge space occupies a unique niche, making these vendors more likely than those in other segments to drive exceptional growth as standalones. One of the key breakthroughs has been ease of use and integrating into the preferred UX for sales. For example, Guru’s Slack integration has led to growth validated by the company’s recent Series B ($25.5 mm). This category will also see new competition from the CRM market. For example, Microsoft’s AI bot will be able to fetch recommendations in real time.
One of the most discussed segments in the sales engagement platform space is conversation intelligence. Today we see standalone vendors well funded by well-known venture firms (Chorus $55.3 mm, RingDNA $35.6 mm, and Gong $40 mm). In addition, companies in the sales engagement and dialing automation segments have made acquisitions in this space to bolster their own offerings (e.g., SalesLoft’s acquisition of NoteNinja, Showpad’s acquisition of Voicefox, and Dialpad’s acquisition of TalkIQ). We believe the successful standalone vendors (Chorus and Gong) will be acquired within two years.
TOPO’S MARKET PREDICTIONS
The sales enablement market is well established but burgeoning. We predict a number of developments in the market over the next two years:
- Segments will consolidate. We are already seeing market consolidation across segments. An example is Showpad’s acquisition of LearnCore and Seismic’s acquisition of KnowledgeTree and SAVO Group. We expect more vendors to move closer to a sales enablement platform featuring all four segments via acquisition or tight integrations through APIs.
- Expect significant category growth. The confluence of innovation in the space, capital investments, and resourcing within organizations is creating an active market. TOPO has found that of organizations on the higher end of the sales tech spending spectrum ($8-12K per rep/year), most have invested in one sales enablement vendor. We anticipate their investment to grow at least 2x as they expand their sales enablement tech platform. In addition, as organizations continue investing in internal sales enablement, they will invest in a platform to support these efforts. To that end, TOPO anticipates that the market will continue to grow exponentially, at least doubling in the next 18-24 months.
- AI-guided sales processes will be the big game changer. Sales organizations can now deliver enablement content to reps in real time. Guiding them through the sales process is based on who the buyer is and what activities they have executed. Through an intuitive process enabled by real-time intelligence, sales teams can better move buyers through the buying journey. For example, seeing that a buyer is in a certain segment and has consumed certain content, AI could recommend that the next best sales step would be to arrange a face-to-face meeting instead of scheduling a demo. This is the ultimate breakthrough in enablement.
- Digital adoption solutions will be the next segment added to the sales enablement stack. These solutions guide sales reps through the business processes in their technology tools. For example, a digital adoption solution might guide a rep through completing an opportunity. Sales organizations are, and will continue to be, fueled by technology (according to 2019 TOPO research, world-class sales organizations spend $8K-12K on technology per year per rep). Technology enablement is a growing requirement in sales enablement and these solutions will be on the forefront.
- Conversation intelligence will be used to guide calls in real time. We think of conversation intelligence as logging and analyzing calls to enable coaching. Going forward, real-time knowledge vendors will use conversation intelligence to listen to calls so they can recommend the next best action during the call, such as recommending what the rep should say and deliver. This will make it possible to satisfy each buyer during each call while also guiding them from their current state to the desired future state.
- Conversation intelligence will be built into approximately 20% of sales products by the end of 2021. By that time, over half of all sales calls will likely be analyzed by software because conversation intelligence is going to increase rapidly. Conversation intelligence is already present in at least one sales engagement platform (Salesloft) and one sales enablement vendor (Showpad). It will likely find its way into other engagement technologies (especially voice). An even bigger impact is on the horizon as conversation intelligence becomes an offering in the CRM platform suite. Microsoft is investing heavily in the space and Salesforce just acquired Bonobo.
KEY CONSIDERATIONS WHEN EVALUATING SALES ENABLEMENT TECHNOLOGY
With that mind, consider the following best practices TOPO has uncovered as we analyze the most successful implementations of sales enablement technology.
- Strategy comes before technology. This is a common adage, but true for a reason. In successful implementations, organizations build their enablement strategy before deploying technology.
- Clear ownership is crucial. There is a movement underway to build teams wholly responsible for sales enablement. These teams are unequivocally more successful with sales enablement technology. Without internal ownership, initial adoption will be slow. Even if adoption is successful, maintenance will be lacking and usage will fall off.
- Marketing involvement signals effectiveness. When looking across successful sales enablement implementations, marketing is almost always involved in content development. The sales enablement lead can be in sales, but marketing is part of the enablement process.
- A commitment to content is required for continuous learning and sales content management. Both technology segments can be extremely effective but only with a steady flow of content and materials.
The timing for when to buy sales enablement solutions typically comes down to the following key factors:
- Sales team growth (30+ sales reps) – When sales teams reach this size, the organization is likely already facing the challenge of ensuring proper enablement.
- Multi-locations or remote sales reps – Once hiring extends beyond headquarters, reps become isolated and have less access to the tribal learning that benefits those at headquarters.
- Multiple SKUs or products – Many B2B organizations are launching new products or functionality at a rapid clip, while more mature companies manage large product lists. These are classic use cases for digital, always-on learning.
These factors create significant challenges in delivering enablement and trigger careful consideration of enablement solutions. TOPO recommends that organizations evaluate solutions when faced with at least one of the three buying triggers listed above. The various segments of the stack should be adopted gradually (versus all at once); the order of the purchases depends on the organization’s current challenges.
IMPROVE SALES ENGAGEMENT WITH THE RIGHT STACK AND TOOLS
The most valuable sales enablement tools allow sales reps to improve the quality of their sales engagement as close to the buyer as possible in a non-disruptive, real-time, and contextual way. The closer to the buyer—and the more contextual and less disruptive—the greater the impact of the sales enablement tool. The more effort a rep must undergo to execute a task or exercise that does not immediately impact the buyer, the lower the value of that sales enablement investment or software.
All the technology we’ve covered in this post and the previous one help sales reps deliver knowledge-driven experiences for buyers and can help improve sales performance without much effort. By making investments in these types of technologies, sales enablement leaders position their reps to impact, in real time, what happens during calls with prospects and help guide buyers efficiently and effectively to the desired future state.