Slow buyers cause tech firms to rethink sales approaches

Cashflow is tight and the sales cycle has become more expensive.

That’s not good news.

For those companies that were already struggling to deal with large enterprise-half-year payment terms, they are now battling on the other side of the sale.

One in four companies go bankrupt due to late receipt of invoice payments. So with payment terms being stretched, the pressure is being piled on smaller firms that can’t cope – increasing the chance of bankruptcy.

Buyers of technology and professional services have slowed their decisions. This is squeezing companies that were already pressured into giving more flexible payment terms.

There comes a point where this is not sustainable. Leaders will currently be asking themselves how they can keep the same number of jobs moving forward as sales have slowed.

Some 72% of CXOs in technology and professional services companies that serve large enterprise firms reported they were not hitting sales targets in Q1 this year.

These are the findings of our latest research – Growth Blockers UK: Q1 2024.

Slow decisions, tough economic conditions and a lack of access to funding were all cited as reasons for slowing performance.

CXOs said they would like to see economic conditions improve. They also said they need to get a better understanding of the customer and drive better marketing and sales performance all around.

But it also seems that trends are changing in what customers are looking for. And the question is whether the companies are keeping pace with that.

The CXOs themselves said they expect their own suppliers to think differently now, and be more creative, collaborative and consultative.

If the CXOs are saying that about their own suppliers, it’s likely their own clients are too.

While 28% of companies are still hitting targets, the study found that 48% of CXOs said that Q1 was even harder than the previous quarter, with only 19% of firms saying it was easier.

So there are some companies doing well right now. I suspect those companies are heavily focused on research, listening and engaging with a customer on their terms.

I suspect the others are finding it tricky to do that because many are looking over their shoulders at their competitors instead of looking at their customers.