Sales tools have evolved beyond just traditional CRM. Top performing sales teams are leveraging cutting edge technology to focus their sales efforts on the best prospects, arm themselves with the most up to date and relevant sales material, and reduce manual or repetitive tasks. Sales Technology enables sales teams to accelerate the sales cycle by doing things smarter, better and faster, and, ultimately, close more and higher quality deals.
2. Introduction to Sales Technology
The sales process for B2B companies is changing as customer
buying habits change. Readily available online information enables
customers to research and learn the details of specific products and
services without interacting with a salesperson. The connected and
empowered buyer is driven not only by the proliferation of information
but also by a behavioral change in which they prefer to find
information and identify alternatives on their own. According to
Forrester Research ”today’s buyers might be anywhere from two-
thirds to 90% through their journey before they reach out to the
vendor”.
To be successful in today’s customer-empowered environment, sales
teams need to arm themselves with the best tools to convert clients
once they do become interested in the product. In response, Sales
Technology has evolved beyond just traditional CRM. Top performing
sales teams are leveraging cutting edge technology to focus their
sales efforts on the best prospects, arm themselves with the most up
to date and relevant sales material, and reduce manual or repetitive
tasks. Sales Technology enables sales teams to accelerate the sales
cycle by doing things smarter, better and faster, and, ultimately, close
more and higher quality deals. It also takes some of the uncertainty
out of the sales function by enabling clear, repeatable processes,
optimized by actionable data insights.
A company’s success literally depends on the performance of their
sales people and it is no surprise that executives are keen to have
their sales teams humming at peak performance. This is driving
significant growth in the $16.6B Sales Technology market and fueling
hundreds of start-ups and strong strategic interest from buyers.
2
Sales Technology Empowers Sales
Teams to be More Efficient and Effective
Massive $16.6 Billion U.S. Market
(excluding CRM)
3. Where Sales Technology Fits in the Conversion Funnel
“The first rule of any technology…is that automation applied to an efficient operation will magnify the efficiency. The
second is that automation applied to an inefficient operation will magnify the inefficiency.” – Bill Gates
Sales Technology promises to do for the sales function what Marketing Technology has done for the marketing function – drive
greater efficiency, effectiveness, and intelligence. Whether finding the best prospects, optimizing communications, or
streamlining sales collateral, Sales Technology is becoming an invaluable tool for maximizing sales team performance.
3
Awareness
Interest
Consideration
Intent
Evaluation
Decision
Purchase
Leads
Prospects
Customers
MARKETING
TECHNOLOGY
SALES
TECHNOLOGY
Classification
Near-Term
Prospects
Marketing / Sales Functions
Advertising, Search, Social,
Outbound Prospecting, Content
Marketing, Event Marketing
Website Tracking, Optimization,
Email Marketing, Lead Scoring, CRM
Quotes, Documentation
Inside Sales, Outside Sales,
Presentations
Purchase Funnel
4. Sales Technology is a Massive Opportunity
4
Source: U.S. Census, Gartner, InsideSales
$14.6
$16.6
CRM Sales Acceleration
Total U.S. Market Size ($B) in 2015
“When you improve your product so it does the customer’s job better, then you gain market share.” – Clayton
Christensen
We think of Sales Technology as comprised of both traditional CRM and Sales Acceleration (essentially, everything else)
technologies. While the distinction is somewhat fuzzy as CRM suites incorporate additional functionality, Sales Acceleration
as a standalone opportunity is already larger than the traditional CRM market and has the potential to grow even faster.
Key Assumptions:
5.8M sales reps in the U.S. (non-retail) in 2015
̶ 1.8% increase from U.S. census 2014 estimate of 5.7M
$2,850 sales acceleration spend per sales rep in 2015
̶ 25% increase from InsideSales’ 2013 estimate
U.S. accounts for 55.7% of the global CRM market
5. 5
Defining the Sales Technology Market
Sales Force
Management
Sales Data / Analytics
Customer Intelligence
Sales Enablement
Sales Engagement
Key Capabilities: CRM, email tools, call tools, automated engagement, sales activity logging
Tools to help sales professionals reach out to more prospects more efficiently.
Improves how sales professionals communicate with customers and ensures that messaging is on point.
Allows sales professionals to keep track of historical interaction so that communications are coherent and
consistent.
Key Capabilities: content enablement, content sharing, automated quotes / documentation
Increases the effectiveness of sales professionals by arming them with the latest sales collateral and allowing them
to easily customize for each client.
Intelligent content recommendations tactically sequenced to increase the chance of connecting with a customer at
each stage of the buying cycle.
Key Capabilities: database / list services, company intelligence, buyer insights, social prospecting
Leverages internal and external data sets to gain insight into potential prospects to streamline the qualification,
communication, and conversion process.
Provides access to pre-qualified leads or helps identify leads using social networking and other channels.
Key Capabilities: pipeline management, data visualization, predictive analytics, interaction analytics
Analyzes leads and historical sales activity in order to provide actionable insights that allow sales professionals to
focus sales efforts on highest value targets.
Identifies, models, and predicts sales trends and outcomes while aiding sales management in understanding where
salespeople can improve.
Key Capabilities: onboarding, coaching, compensation, sales gamification, performance management
Helps sales managers formulate and implement sales strategies and effectively manage sales people.
Provides tools and reward systems to train and encourage sales professionals and drive friendly competition that
creates an incentive based atmosphere.
Clearly outlines sales objectives and ensures that compensation is aligned with company goals.
Source: AGC Partners
6. 6
Representative Sales Technology Companies
Sales Force
Management
Sales Data / Analytics
Customer Intelligence
Sales Enablement
Sales Engagement
DISCLAIMER: This is only a representative list and may not include all relevant companies. If your company is not on the list and would like to be added for future
publications, please kindly shoot us a note at gleung@agcpartners.com and we would be happy to consider adding.
Source: AGC Partners
7. “Every problem is a gift – without problems we would not grow.” – Anthony Robbins
The sales process is unpredictable and inefficient. Sales Technologies take some of the burden off of sales people by
standardizing and automating processes and addressing critical pain points.
Addressing Key Industry Pain Points
7
Sales Problem Sales Technology Value Proposition
Poor insight into the quality of
leads and where they should be
spending time.
Align marketing and sales goals to improve collaboration.
Leverage machine learning to optimize lead generation for highest ROI customers.
Predictive analytics to help prioritize leads.
Non-linear buying process of
potential customers caused by
channel fragmentation.
360-degree view of the customer, including online activity, response to marketing campaigns, past
communication history, etc.
Multi-channel orchestration to ensure coherent messaging across calls, emails and other communications.
Time consuming tasks such as
managing accounts and tracking
and reporting sales activity.
Quote generation tools with visibility into the latest product and pricing information.
Automated logging of sales activity and generation of actionable reports on performance.
Outreach notifications and reminders.
Poor access to updated and
relevant sales collateral.
Cloud-based repository of latest sales collateral accessible from any device.
Automatic syncing of sales collateral with latest marketing campaigns.
Sales collateral organized and optimized based on client type and funnel stage.
Difficult managing sales team
performance and turn-over.
Get greater visibility into pipeline and forecasts making sales more predictable.
Clear, repeatable sales processes, optimized through scientific analysis, to help salespeople take some of
the guesswork out of their jobs.
8. Surprising Inefficiencies in the Sales Process
8
% of Sales Reps That
Think they Spend
Too Much Time on
Data Entry
Source: ToutApp
% of Sales Reps That
Give up After One
Follow-up
Source: Scripted
% of the Buyer's
Journey Completed
Before Talking to a
Sales Rep
Source: CEB
% of Sales Reps Time
Spent Actively
Selling
Source: CSO Insights
% of Missed Deals
Due to Sales Reps
not Finding or
Leveraging Internal
Resources
Source: Qvidian
% Improvement in
Close Rates when
Sales and Marketing
are Aligned
Source: Marketo
% of Prospects that
Feel their Sales Rep
is not Prepared for
the First Meeting
Source: IDC
% of Top Performing
Companies Using
Sales Acceleration
Technology
Source: Forbes
Insights
% of Sales Reps that
Store Customer Data
in Physical Files or
Google docs.
Source: HubSpot
“Statistics are used much like a drunk uses a lamppost: for support, not illumination.” – Vin Scully
Significant inefficiencies exist in the sales process. Considering the cost of top sales talent and the challenging nature of the
role, companies are keenly focused on optimizing their sales organizations.
9. The Empowered Buyer
“How is it we have so much information, but know so little?” – Noam Chomsky
Customers have access to more product information than ever before. Through company websites, white papers, web videos,
infographics, social content, online review sites, etc, customers may be very well informed before they ever talk to a sales
person. The challenge then is for sales reps to be able to react quickly to help customers complete the purchase journey.
9
Awareness
Interest
Consideration
Intent
Evaluation
Decision
Purchase
Traditional Buyer Education
Self Directed by
Customer
Discovery Channels:
- Website
- Trade Shows
- Marketing Content
Awareness
Interest
Consideration
Intent
Evaluation
Decision
Purchase
Today’s Empowered Buyer
Engages Sales Person
Engages Sales Person
Self Directed by
Customer
Discovery Channels:
- Website
- White Papers
- Web Videos
- Infographics
- Social
- Online Review Sites
- Trade Shows
- Marketing Content
10. 10
Aligning Sales and Marketing
“What about the good leads?” – Shelley Levene, Glengarry Glen Ross (1992)
The line between marketing and sales continues to blur. B2B marketing organizations are becoming revenue-generating
centers, while salespeople are behaving like micro-marketers when they share content through social media channels. These
two roles serve a shared purpose: to identify, attract, and close business for the company. Aligning sales and marketing
functions ultimately leads to less finger pointing and better performance for both teams.
Marketing
Sales
Keeps marketing content consistent with
sales collateral to deliver coherent
messages to customers that are going
through more of the product journey
themselves.
More cooperation between marketing
teams and sales teams results in faster
conversion from lead to sale.
Analytics and transparency help avoid
finger pointing situations where sales
blames marketing for poor leads and
marketing blaming sales for not being able
to close.
ADVANTAGES OF SALES AND MARKETING ALIGNMENT
Aligns marketing and sales on shared
goals and KPIs, such as lead to close rate,
lead to opportunity rate, deal velocity,
average deal value growth, database
reach, engagement and other metrics.
Marketing gains better insight into which
leads result in the best ROI, allowing them
to optimize their marketing activities.
Sales can gain valuable intel on customer
needs and challenges through access to
marketing analytics, allowing them to tailor
their sales messages.
Source: AGC Partners
11. Private Placement Activity
Highlights
Key Takeaways:
̶ Possible maturing in the Sales Tech sector as deal volume
declines and capital raised increases
̶ Fall-off in both number of deals and capital raised in 2016
likely a result of tougher macro environment for financings
Key Stats:
̶ 312 total transactions (2012 – 2016YTD); declining since
peak in 2014
̶ $3.47B total capital raised (2012 – 2016YTD); 60% CAGR
from 2012 to 2015
̶ $8.9M median amount raised per round in 2016YTD; 28%
increase over 2015
Companies that have raised the most capital:
̶ Domo: $545M
̶ InsideSales.com: $225M
̶ Apttus: $186M
̶ Radius Intelligence: $130M
̶ Birst: $129M
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Source: CapIQ.
Note: Total Capital Raised for deals where disclosed. Calculation for Median Amount Raised excludes transactions <$1M.
49
86 89
65
45
2012 2013 2014 2015 2016 YTD
(Annualized)
Total Number of Transactions
$279
$616
$891
$1,258
$422
2012 2013 2014 2015 2016 YTD
(Annualized)
Total Capital Raised ($M)
13. M&A Activity
13
AcquirorTarget EV ($M)
$26,191
$2,630
$1,350
$937
$450
$392
$154
$125
$134
Highlights
Key Takeaways:
̶ M&A activity accelerating in Sales Tech
̶ Microsoft’s $26B acquisitions of LinkedIn the largest
transaction by far and a strong endorsement of the sector
̶ Large marketing cloud and CRM players are the most active
acquirors of Sales Tech
̶ Strong PE interest in the sector as leading players reach
significant size and profitability
Key Stats:
̶ 111 Total transactions from 2013 to 2016 YTD
̶ Estimated 51 transactions for 2016; 37% CAGR from 2013
and the most active year so far
Most Active Strategic Acquirors # of Deals
̶ Salesforce 4
̶ Microsoft 4
̶ Oracle 2
̶ SAP 2
̶ Callidus Cloud 2
̶ Infor 2
Top 10 Sales Tech M&A Transactions
Source: CapIQ, 451 Group
Note: Top 10 list represents transactions with disclosed values.
Date
06/13/16
06/02/16
06/05/13
05/18/16
10/23/13
07/11/14
11/04/14
01/08/15
06/07/13
$30012/23/15
14. About AGC
Gee is a partner at AGC Partners, focusing on Digital Media and Marketing Technology.
In his 18 years as an investment banker, Gee has completed both M&A and financing transactions for some of the
largest global technology and media companies, as well as growth companies at the leading edge of innovation.
Prior to joining AGC Partners, Gee held senior banking positions with MESA Global and Montgomery & Co. He
started his investment banking career at Salomon Brothers in the late ‘90s and later worked at Friedman Billings
Ramsey in its technology M&A team.
Gee received a B.A. from the Haas School of Business at UC Berkeley.
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Note: This document is intended to serve as an informative article only in order to further discussion, analysis and independent verification. This document is based upon sources believed
to be reliable, however, we do not guaranty the sources’ actuary. Unless otherwise indicated, AGC does not believe that the information contained herein is sufficient to serve as the basis
of an investment decision. There can be no assurance that these statements, estimates or forecasts will be attained and actual results may be materially different. This is not a solicitation
of an offer of any kind. To learn more about the company/companies that is/are the subject of this commentary, contact one of persons named herein who can give you additional
information.
AGC is a leading investment bank with a focus on providing strategic advisory services to technology
companies, helping them achieve their vision. With more than 50 investment banking professionals across
the Americas and in Europe, we provide global coverage across all products and sectors, from software and
digital media to tech-enabled services and mobile communications. Since our inception in 2003, AGC
Partners has completed more than 270 investment banking transactions for emerging growth companies.
Gee M. Leung
Partner