Our company, like many others right now (hopefully post-Covid 2023), is shifting to a virtual discovery and delivery model. Although I understand the social, financial and coverage benefits I’m not so sure it will help our pipeline and closure rates based on experiences over the past 3 years. Do you have any data about the relative success rates of old-style physical versus virtual sales calls?
Common sense says that physical always beats virtual, yet we cannot find any data to support that.
Michel , Central US
Thanks for the question.
Challenging times indeed. I do have some qualitative data to share with you. However, the warning is that there was always a face-to-face alternative to a virtual call when this data was collected. That’s not necessarily the case for 2020-21, and that may skew the data in some way that I’m not statistically smart enough to understand!
These are two sets of data collected by:
A smaller (less than $350m USD) software company with one primary product and a set of add-on modules. The timeframe was 2017-18 after a first comparison set of data from several years prior gave them the idea to measure impact.
A larger (less than $1bn USD) company with a more diverse portfolio collected data during the first half of 2019.
They both measured success rates in progressing deals through the sales cycle to a WIN according to several factors – one of which was physical vs. virtual interaction. In order to make this a true comparison, they removed those deals that were either too small (obviously virtual) or too large (obviously physical) and focused on deals in the middle and within 2 standard deviations of Average Transaction Size. Both utilized MRR – Monthly Recurring Revenue as their metric, averaged over a 3-month period, excluding any initial Month-1 effects.
Here is a summary of the results (as measured and tracked by the SE team as opposed to sales)
|Stage of Sales Cycle
|Virtual Win Rate
|Physical Win Rate
|Unqualified First Call
|Qualified First Call
They noted several things about this data:
- The physical win rate ALWAYS exceeded virtual.
- The deeper in the sales cycle you progress, the larger the difference.
- Physical advantage maxed out around 9%
- The delta at the smaller company was assigned to one particular competitor who was relentlessly face to face later in the sales cycle and to Do Nothing when early in the sales cycle.
- There was no such obvious modifier with the larger company
- The additional revenue generated more than offset the travel costs of the physical calls.
There is obviously a lot more to the subject than this – but it’s a good starting point for you.
The obvious conclusion is that win rates and revenue decrease by up to 9%. Yet if everyone is in the same boat, now competing for the share of the wallet – is that the case for now?
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