I’m predicting sales in 2024 will look very different for many people.
Many people will (be forced to) leave their sales roles in 2024 + 2025.
2024 will likely see a further tightening of the economy.
Looking at a few data points this week makes for deeper contemplation.
1: ZoomInfo, arguably the world’s largest contact data supplier, has had to rejig its financial forecast in the face of declining revenue. Businesses are reducing and cancelling subscriptions like never before.
Why would B2B sales companies be cancelling their data subscriptions?
Fewer salespeople to feed data to? Lower growth expectations? Probably both.
2: Apple’s handset sales have slowed considerably. The first time in a long time. It seems like people are happy with their iPhone 11/12/13 and not upgrading to the 15.
3: Interest rate rises are still coming. A Melb Cup day rate rise is most likely, according to those who spend a lot of time thinking about it. It takes 6months for the effect of a rise to wash through the economy. If we have another rise in late 2023, that won’t be felt until mid-2024.
4: Global events. The war in Gaza will keep lots of businesses and people cautious, and the Ukrainian invasion defence doesn’t seem to be making any meaningful progress.
These scenarios are already making companies start to analyse where they can save money and where they can spend less.
One of the first places they will look will be their sales dept.
Over the last few years, sales roles have seen a massive increase in remuneration and, at the same time, a decrease in results.
James Michael outlined it well in a recent LinkedIn post. Some salespeople have been incentivised to move jobs and have successfully increased their earnings without increasing their skills or proving/ improving their results.
This means there are a lot of salespeople being paid a lot of money.
Yet, we continue to see stories of quota attainment typically running at about 40%.
Either the salespeople aren’t any good, or the quotas are too high.
I suspect the quotas have increased to try and offset the increased wages the salespeople were asking for at the time of recruitment. (Businesses have made the increased salary request a problem for the very salespeople asking for it by increasing their sales target).
In most instances, the standalone, appointment setter, SDR/ BDR-type role in businesses can not last in this environment of tighter cost scrutiny.
Because when we do even a basic calculation of the cost of running that function in most businesses, the vast majority don’t generate enough new business to pay their wages.
They certainly don’t generate enough to pay their wages and that of those who support them, such as sales leadership and or sales ops. All that coaching and support has a genuine cost to the business, and it also has a significant opportunity cost.
While the leaders are busy supporting the SDR/ BDR’s, they can’t be doing something else.
As more and more companies peel back the layers and determine that standalone SDR teams are not viable (and certainly, all SDR teams with less than 5 SDRs are unviable), it makes sense to think that the SDRs will be laid off as the roles are made redundant.
The SDR roles will be rolled back, but I believe it’s the AEs (the more senior sellers) that are in real trouble.
Ask yourself, what will be the most valuable part of the sales function in 2024/ 25?
New business creation.
If you’re leading a business, you have two options in relation to reducing sales headcount.
1: Sack the SDRs and train the AEs to do new business and account management. OR
2: Sack the AEs and get the SDRs to do new business and account management.
Re-training AEs who think they have outgrown new business and believe they’re above prospecting is a logistical, training and cultural nightmare.
I suspect the AEs will want more money and will complain a lot.
And there is no indication that they will be any good at new business if they haven’t done it in their current roles or in that business.
With most salespeople churning roles every couple of years, most won’t have new business experience in their current role.
Yet, your top-flight SDRs skilled in new business can be taught how to be AEs, and they’ll likely do so eagerly.
They’ll also likely do it on a payscale less than the AEs are on now.
So, commercially, if you’re ratifying your sales function in 2024, it makes more sense to take your existing SDRs and turn them into new business-focused AEs and make your AEs redundant.
This secures your new business pipeline and reduces your cost of sales labour.
Is there a place for SDRs at all – yes, I think the future lies in evolving into something closer to MDRs (Market Development Reps), But that’s for another article, The Future of Sales, part 2 (coming soon).
All those AEs who have become reliant on having leads given to them and refuse to take on a new business quota will be forced out of the sales industry.
Based on my experience with software sellers, especially those with big brand names, this is a good thing.
Sales need to rebuild itself.
What say you?