Helen Lin and Dawn Poulos analyze CRM data from 30 B2B tech companies to show what's actually happening in sales. Win rates dipped in Q1, sales cycles stretched then stabilized, and late-stage conversion rates have fallen steadily since mid-2022. The data reveals the economic headwinds affecting deal flow right now.
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Sales, marketing, and RevOps. It's sink or swim out there. Yesterday's strategies and tactics won't help you today. This is Revenue Today, and I'm your host, Jared Robin. Join me as we interview revenue leaders in our community to learn what steps we can take right now to help you scale yourself and your company. Revenue Today is sponsored by RevGenius and RevRoom, where on a mission to build trusted spaces for curious revenue professionals who are collaborating on the future of B2B go-to-market.
Hi everyone. I'm Helen Lin, CEO, founder of Discern. I've been analyzing data my entire career, starting at the Boston Consulting Group. Throughout my career as a consultant, then chief of staff at IHS Markit, Goldman Sachs, and working at a PE-owned portfolio company, I've analyzed data from all sorts of systems, of which the most important is the CRM. which led me to start Discern. So I look forward to sharing some of my learnings with you today and have a fun and productive conversation. Over to you, Dawn.
Thanks, Helen. Hi everyone, I am Dawn Poulos. I am one of the co-founders of Covizio, and I have spent over 20 years as an operator, starting out in enterprise sales selling non-SQL databases— what fun— moving on to an SDR leader, and then moved into marketing where for the past decade-plus, I have held CMO roles at various high-growth companies. I've actually spent the last 5 years in consulting, something I never thought I would do, but it turned out to be an amazing experience working with companies just like yours. And I look really forward to sharing a lot of the pattern recognition that I've collected over that time. So like Helen, looking forward to a fun event.
Okay, well, thank you for joining us. Dawn and I actually went to the same business school and were in the same business school class, but we didn't meet until recently at an industry event. So we realized that we were— we have been solving the same go-to-market problems from different angles. So we decided to combine our knowledge base and share with this audience. So we will kick off today's agenda by sharing the latest sales performance benchmarks, followed by reasons for inaccurate sales forecasts. And then share a proven sales forecasting framework, which we call the 4 Ds. So on sales benchmarks, since Q1 just ended, I wanted to share some data with you. When we look at benchmarks, these benchmarks are based on 30 or so B2B tech companies with whom Discern's system is connected. Therefore, this is data directly from the CRM, not self-reported, so you can rely on this data. We did not include companies whose fiscal Q1 have not completed, and all data presented here are median numbers for each metric, but there is a distribution obviously for each metric. So let's take a look at closed deal metrics. Win rates increased in Q4 but declined in Q1, which is probably reflective of seasonality, but that said, Q1 win rate was not as high as last year's Q1 and actually declined quite a bit. Sales cycles started to increase in Q3 of 2022, which is not surprising given the economic environment, but have since stabilized, which is great. The ASP change quarter over quarter is always pretty dramatic, and we are seeing that pattern in Q1 again. So nothing surprising there. Now let's take a look at open deals. When we look at open pipeline performance, we look at conversion rates. Conversion rate is defined as of total open pipeline to close within a quarter, the amount that was won within that quarter. Conversion rates started to decline since Q2 of last year, driven both by early-stage to late-stage conversion, but mostly by late-stage conversion. What this is telling us is that these days deals are not as easily won. as they have been in the past. As a result, the largest decline in quarter-over-quarter ARR bookings, if we can go to the next slide, is in Q1. And though from an efficiency perspective, ARR bookings per ramped rep has stabilized from Q3 of last year, which was the lowest point for sales efficiency. So just like the current economic environment, sales metrics are in flux.
Thank you, friends, for joining me. That was another great episode of Revenue Today, if you're looking to listen to more episodes or for the show notes, go to revgenius.com. For all my friends in the Rev Genius community, it was awesome to spend this time with you. Please DM me any feedback or ideas for future podcasts in our Slack channel or on LinkedIn. If you're not in Rev Genius, join us. It's revgenius.com. It's free and it's fast to join, and really for all levels of revenue professionals. For senior leaders, we just launched. A private community just for you called RevRoom. We know it gets lonely out there, and we've built a tight-knit group of senior leaders collaborating on the future of B2B go-to-market. Looking forward to seeing you all there.
