The United States has the most advanced software and information technology (IT) services industry in the world. More than 40 percent of the $5 trillion global IT market is in North America, primarily the United States. The sector accounts for $1.8 trillion of U.S. value-added GDP. (SelectUSA)
The question remains, how will the software and IT services industry come through the current COVID-19 crisis? How can SaaS companies minimize the impact of business disruption?
COVID-19 Impact on the Global Economy
We know that COVID-19 has had a significant impact on the global economy. Harvard Business Review reports that forecasts “call for a 13-32% decline in merchandise trade, a 30-40% reduction in foreign direct investment, and a 44-80% drop in international airline passengers in 2020.” And the impact will be long-lasting. Financial Times recently wrote that the global economy could anticipate a state of “hysteresis” following the coronavirus crisis. The economy will not automatically return to the status quo.
SaaS Industry Growth
A few months before the outbreak of COVID-19, I was at a presentation delivered by Linkedin Marketing Solutions. They shared a fascinating insight: In 2020, with trade wars happening between global superpowers, various industries will experience reduced growth figures. The exception to this is the software industry, which is expected to remain buoyant given the low barriers to global mobility. Given that you can run a SaaS company remotely from just about anywhere in the world, you can expect to achieve superior growth in this industry.
In the current crisis, SaaS companies have the advantage of employing primarily knowledge workers who can work virtually, given they have the technology and processes in place to work from a remote location. Post-COVID, many software companies will continue to support remote work arrangements since their teams have proven to be productive while working from home.
A May 2020 Gartner survey of CFOs found that once offices are re-opened, 26% of staff not working from their normal location will continue working remotely beyond the end of 2020. Now that the systems have been put in place to manage and train remote employees effectively, the reduction in office space expense is welcome news for CFOs. Another Gartner survey revealed that 74% of companies plan to permanently shift to more remote work after COVID-19.
SaaS Industry Sales Performance During COVID-19
In light of current economic conditions, at DealHub, we were compelled to look at our aggregate customer data across the software industry to understand how companies were performing during March-May 2020.
We pride ourselves on our expertise in the area of Configured Price Quote, and we wanted to understand the performance patterns of all the closed-won deals. We measured the sales cycle duration from quote to close each month, and compared traditional CPQ delivered by either a PDF or Word output, against our innovative DealRoom.
What is a DealRoom?
DealRoom sales proposal software technology enables the sales team to quickly compile and generate customized business proposals into one convenient and easy-to-send digital room. The advantage for buyers is an intuitive experience, personalized content, and all the information they need in every stage of the buying journey.
Average Sales Cycle Duration Results (March-May 2020)
Our DealRoom delivers a compelling impact as it reduces the sales cycle duration by an average of 3.5X in days compared to PDF/Word documents. This can be attributed to the fact that it condenses all the deal stages into one tailored micro-website. Everything is in one location – from sales collateral and configured price quote, to contract negotiation, SoW, forms, and eSignature.
Average time spent creating a quote in the Sales Playbook (March-May 2020)
On average, we also determined that it takes significantly less time per person to create, manage, and execute a DealRoom compared to quoting with a PDF/Word document.
Keep in mind that your salespeople are not the only ones working remotely. Your customers are, too. They have increasing demands on their time as they balance working from home (learning new tech, adjusting to new processes, having virtual meetings, etc.) with home life. Your customers expect vendors to be able to produce quotes, supporting content, and proposals quickly so they can move purchases forward on their end.
As discussed in a recent post on sales responsiveness, the need to be the most responsive vendor remains true from one end of the sales cycle to the other.
What is a Sales Cycle? And How do you Speed up the Sales Cycle?
A sales cycle refers to the steps sales teams go through from prospecting to closing the sale. To speed up the sales cycle, all stages need to be horizontally connected. This eliminates administrative work, decreases errors, and automates proposal generation.
Essentially DealHub consolidates the whole sales cycle from opportunity to close. Instead of logging into disparate software solutions, DealHub delivers complete horizontal connectivity – with all the solutions you need in one platform.
Accelerating Your B2B Sales Cycle Benefits Revenue Operations
The benefit of reducing the sales cycle is that Revenue Operations can access the new revenue within the same fiscal quarter, rather than the next quarter. Maintaining this positive cash flow is essential to the financial health of companies that are dealing with economic disruption.
As companies prepare for the next phase of coronavirus response and a return to business, essential tasks include space-planning for social distancing, adapting common areas and entrances, and configuring alternate work schedules. All of those are necessary but are occurring behind the scenes. Sales teams carry out their daily work on the front line of business and must continue serving customers and driving revenue.
While there are global market and customer trends worth analyzing during the pandemic, excellent digital experience and responsiveness during the sales process are timeless customer expectations. At DealHub, we built DealRoom to help our customers withstand market turbulence and enable them to serve their customers quickly from any location and to leverage a reduced sales cycle for greater revenue growth.
Free Guide: The Ultimate Guide to Revenue Operations
The Ultimate Guide to Revenue Operations will help you find opportunities within your sales process to create an end-to-end approach to revenue operations.