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Sales Acceleration Technology Spending: Special Report


Sales Acceleration Technology Market Size StudySales acceleration technology has transformed the B2B sales world. That much is indisputable. It’s obvious every time you chat with a customer on your website, make a video call, or sign an electronic contract. These innovations make remote selling more convenient for both buyer and seller. But are the companies adopting these technologies actually any better off?

James Phillips, a research analyst at InsideSales.com, definitively answers this question and more in his groundbreaking report, “The 2014 Sales Acceleration Technology Market Size Study.”

Phillips’ research shows that North American companies already spend $12.8 billion per year on sales acceleration technology, which is defined as the growing group of technologies that is quickly emerging between marketing automation and customer relationship management (CRM).

This new category is composed of 15 different types of technology, including innovations in sales communications, gamification, predictive analytics, data visualization, sales intelligence, pricing and quoting tools, and electronic contracts.

The study details how business executives are allocating their technology budgets to drive real business results. It uncovers compelling correlations between technology spending and improved sales performance in four key areas:

  • Bigger deal sizes

  • Faster sales cycles

  • Higher close rates

  • Increased revenue

“Companies that spend more on sales acceleration technology close bigger deals and generate more revenue,” Phillips said. “It’s easy to justify buying this technology because it boosts all of the metrics that matter.”

His report reveals spending patterns by industry and company size, so decision makers can compare their own spending with that of their peers. The study found that 36 percent of sales leaders believe they aren’t spending enough on the technologies they need to remain competitive.

Bigger deal sizes

Phillips concluded that North American companies spend an average of $2,280 per rep each year on sales acceleration technology. Then he looked at the top 50 percent of companies according to deal size. He found that the companies that close the biggest deals spend $4,319 per rep, which is nearly double the average amount.

Deal size

Faster sales cycles

When Phillips dug into the sales cycle data, he saw a clear correlation between companies that close deals faster and their technology spending. Specifically, companies with the shortest sales cycles spend 28 percent more than average on sales communications and intelligence.

Sales cycles

Higher close rates

Companies with the highest close rates spend 17 percent more than the average company on sales communications, intelligence and data visualization technologies, Phillips found.

Communications Spending

Increased revenue

Phillips discovered that sales acceleration technology spending aligns closely with revenue growth. In fact, the top 50 percent of companies in terms of revenue spend almost twice as much as the average company.

Revenue

Spending by industry

Some industries outspend others on sales acceleration technology. The clear leader is the software industry, which has been quick to adopt remote selling techniques. Software vendors spend more than 3 times the average.

Industry

Spending by company size

Not surprisingly, larger companies spend more per rep on sales technology. But the spending gulf between large and small companies is worth noting because it reinforces the finding that technology drives revenue growth.

Company size

Industry outlook

Phillips combined survey responses from 439 North American companies with Census data in this study. He found that companies currently employ 5.62 million non-retail sales reps, and they spend $2,280 per rep each year on sales acceleration technology, which brings the total market size to $12.8 billion.

The data also showed strong signals for future growth. The number of non-retail sales reps is expected to climb to more than 6 million by 2020. The sales leaders who responded to Phillips’ survey are even more optimistic, as they plan to double their sales teams in the next two years.

Some technologies in this category are relatively new and have not yet achieved significant market penetration. When Phillips applied a standard 75 percent adoption rate to the 5.62 million existing reps, he discovered that the total addressable market balloons to $38.2 billion.

“There are lots of reasons for optimism in the sales acceleration space,” Phillips said. “The number of sales reps is on the rise, managers are expressing a need for increased technology spending, and the market is primed for greater usage and adoption. All signs point to a strong future for sales acceleration technology.”

Click here to get the Sales Acceleration Technology Market Size Study.

About James Phillips

James W. Phillips, the lead researcher on the Sales Acceleration Technology Market Size Study, joined InsideSales.com in April 2013 as a business intelligence analyst. He is responsible for conducting research on key questions facing the company and the sales industry. Prior to InsideSales.com, Phillips was a Ph.D. student at Rice University, where he conducted and published his own original research. His high-profile projects include data collection and analysis for the “Portraits of American Life Study.” Phillips has presented more than a dozen academic papers at conferences throughout the United States.

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