This October edition of Challenger’s Pulse Survey finds a large improvement in sales leader sentiment regarding the overall business environment. The dog days of summer are over. That’s the good news. And now the bad news, which should not come as a surprise. Sales leaders tell us they expect the upcoming US election to have a significant impact economically. What they most fear, which speaks to human nature and the state of things today, is a prolonged period of uncertainty.
We also take a look in this survey at sales force time spend. Most concerning is how many sales leaders report their sellers are spending less time with customers, and instead spending even more time on administrivia.
Download the infographic with the full survey results here.
The US economy and large portions of the global economy took a turn for the better in Q3 and this is reflected in more positive sales leader attitudes. Sentiment with regards to the overall business environment has gone up by 15% since we last asked the question in September. You’ll remember that this number was stubbornly stuck at under 50% for a few consecutive months. What’s unclear is the 6% drop in optimism regarding individual professional futures. Uncertainty and growing anxiety about the election may play a role here.
Looking at revenue performance compared to expectations in July, Q3 seems to have been a pleasant surprise for a lot of companies; a first for 2020:
A full 33% of sales leaders report exceeding revenue expectations in Q3. 35% more or less met expectations and 30% missed. That outcome is much better than a majority of leaders projected back in April. And, it seems, optimism is carrying into Q4. The majority of sales leaders, 53%, are now gearing up for a Q4 where they expect to grow revenue more than they did in Q4 of 2019. This group hopes to enter 2021 in full recovery mode. With that said, a significant minority, 39%, tell us that they expect Q4 2020 revenue to come in at less than 2019. Not everyone is quite out of the woods.
We were curious to see if the upcoming US election is expected to have a material impact on the business environment. What we find is that sales leaders definitely believe it will, but it is the uncertainty of waiting for the outcome that they fear most. This may make for tough sledding in Q4. Many customers may look for a degree of stability before they make longer-term investments, putting downward pressure on bookings these sales leaders hope to capture.
Continuing our efforts to understand how things have changed in this new environment, we asked sales leaders about sales force time spend. First, we learn that reps are able to spend an average of just under 20 hours per week with customers. According to Challenger’s benchmark data collected prior to the pandemic, this represents 8.1 fewer hours per week; a decline of approximately an entire working day. Imagine the combined productivity loss when you scale that across a year and a 100-person sales force. That’s the equivalent of 17 fewer customer facing bodies.
And we haven’t heard the worst of it. Sales leaders also tell us that only about half of this time is productive, or time that can be directly attributable to revenue. Interestingly, the most senior sales leaders were marginally less critical, believing that reps spend 51% of customer facing time productively, while individual reps themselves believe it is only 46%. Either way, there is a lot of customer facing time not being used effectively.
This begs a key question: What are reps doing with this extra time?
Time spent with customers
49% report spending less time with customers (we see this in the data)
Time spent prospecting
Even as 52% spend more time than ever on prospecting to fill up pipelines, a top organizational priority and an activity a majority tell us is more difficult to do
Time spent on activities such as planning, and researching
A more challenging sales environment also means spending more time on planning and researching activities (70% spend more time on this than before)
Time spent creating and managing contracts
Deal closing also takes longer than it did before (with 40% reporting more time spent on contracting)
Time spent on collateral and creating presentations
55% now spend more time on customizing collateral and creating visual presentations (we have to look good on Zoom)
Time spent fulfilling administrative requests
And to add insult to injury, 52% report spending more time on administrivia, suggesting that the early pandemic reaction to double-down on internal communications might have run its course. Sales leaders now need to take a new look at how work gets done virtually.
To summarize, September, and Q3, gave many sales leaders some much needed hope that business might be finally entering a new stage of stability. Riding that optimism, many companies are hoping for more of the same in Q4.
But, as they say of US Presidential Elections, October is full of surprises. Uncertainty about said election may slow customer spending. And a surprise outcome could hurt the fortunes of a lot of people. We hope for the best. One conclusion that appears certain is that many sellers need to find more time with customers and make it time well spent. Tightening up administrative burdens can help, so can having better research tools, content management tools and better marketing/sales collaboration. But a 2020 Buyers Study we recently published told us something no one should soon forget. Today’s buyer has set a very high bar for the time they offer to sellers. We have to earn that time with the quality of our prospecting and then deliver an experience that was well worth it in hindsight.
For sales leaders, getting the sales experience right to build pipeline and firm up existing customer relationships is the best use of time today. Challenger can help.
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