How COVID-19 Changed Sales Organizations Forever

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In this edition of BIA Advisory Services’ Vantage Points series, Robert Hawthorne, president of Hawthorne Search is our guest and he shares his perspective on how the pandemic will have a lasting impact on the sales process as we shift from live meetings and events to virtual selling.

Our new virtual world impacts everything we’ve known about sales including, how we evaluate the ROI of sales positions and new hires, how we do more and better virtual selling (aka “inside sales”), how we sell to the mid-market in need of new solutions, and how we do training to bring it all together.

The Vantage Point series taps the perspectives of various lookout points from around the local media and tech sectors. Email us to discuss a topic for consideration.

The trend line started even before COVID-19 hit.  Companies were looking to hire more aggressive “mid-market” sellers who could build their own pipeline from an in-house environment.  Sure, we still saw clients looking to attract high level sellers who owned rolodexes in specific vertical categories at the VP/C suite level, but the flow was slowing.

Many of our clients failed to see the ROI of hiring multiple executive level sales people who carried base salaries of $150,000 a year or higher and who closed many of their deals by traveling to trade shows and conferences that required large investments and often sponsorships of the events.  The common complaints we heard were that these individuals had great relationships and could shepherd a deal from start to finish, but ultimately they couldn’t tee-up new business or generate new opportunities unless they were at an event.

When COVID-19 hit, the paradigm shift became even more pronounced.  When will the next truly “live event” occur?  Companies realized that the days of executive sellers getting on a plane 2-3 times a week and meeting prospects over dinner were not coming back any time soon.

I had dozens of conversations with vice presidents of sales and chief revenue officers who were scrambling to figure out how to hit their revenue goals in this new environment.  Once the shell shock abated, many of them struck a common course with some shared practices that included:

  1. Let them stay home now, and maybe forever. Work from home has always been a hot button issue.  Some companies already embraced it, allowing their employees to work part or full time from a home office. In our most recent survey of sales people over 74% prefer working from a home office with a corporate office option.  Due to COVID-19, most companies were forced to have their sales people work from home and what did the majority of my clients tell me?  They said surprisingly that productivity was above previous levels and that many of their sales people seemed happier and more connected than before.  One chief revenue officer of a 200 million dollar company recently told me “we are never going back in to the office.  My people are happy, we can cut real estate and operating costs and I think it will reduce employee attrition.”  We see work from home being a long term paradigm shift among SaaS/Software/Service sales teams nationally.
  2. Mid-Market exploding. Over the past decade, we have seen a shift away from SMB (small and medium business) sales to franchise and enterprise as margins on SMBs have become narrow for many companies.  Our clients were looking for many years to find a few good “whale hunters” who could bring in large organizations as opposed to building out “feet on the street” teams.  COVID-19 has caused a dramatic repositioning of this as many organizations are finding they can go upmarket and sell mid to large scale organizations from a pure inside sales perspective utilizing Zoom and other tools.  Sellers that can partner with BDRs (business development reps) and build their own pipelines through their own lead generation efforts and then close that business from home are in extremely high demand.  Our organization has talked to a number of CROs who echo what one CRO said when she offered, “we are closing what we can close from a virtual environment and mid-market is our best opportunity.” We see more and more companies playing “small ball” hiring BDRs and affordable mid-market sellers versus high salaried enterprise sellers.
  3. Scrambling to Improve Training. Many of our clients have admitted that their distance learning or virtual training they provided sales people was lacking. They relied on in house trainers who offered a classroom curriculum that was offered in a corporate office in front of a large group of new hires. While many companies had some distance training tools, 90% of our clients admit that they were unprepared to absorb new hires in a purely virtual environment. Companies that offer these services are in high demand.

What does this mean on the recruiting front?  We see mid market sellers and business development representatives getting calls non-stop.  SaaS/software/Services sales people with a base salary of $60K-$80K are on and off the market in record time.

With companies embracing virtual, geography becomes less relevant.  Are you a San Jose based company and tired of paying over market salaries due to cost of living issues in your backyard? Fine, hire a great SaaS seller in Omaha at 75% of the salary who can be as productive for you virtually as the San Jose based candidate.

We see, based on survey data, that this is a long term shift regardless of when COVID-19 restrictions are lifted and business life returns to some semblance of normal.  Millennials and Gen Z employees overwhelmingly want to work from home a majority of time and don’t want to sit in a cube environment every day.  Now that they have had close to a year of work from home companies that try to put them back “on campus” are going to have an extremely difficult time getting them on board.

Note: Hawthorne Search is a boutique firm with national and international experience in Saas/Software/Data, Local Search, Consumer Internet, martech, adtech, fintech, telecommunicatons.

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