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Interesting Graph: Average Deal Size in B2B Sales on the Decline

 

B2B sales, as a whole, represents a moving target. Do I have to remind you that the field of B2B sales is ever-dynamic? It’s far different from other professions where the work is the same routine day in and day out.

MarketingSherpa reports in this blog that the average deal size for B2B organizations is on the decline. Take a look:

b2b sales

Noteworthy:

  • The percentage of organizations reporting deal size of $1K-$10K went from 19% to nearly a third of respondents.
  • The percentage of organizations reporting deal sizes under $1K doubled.
  • Significant decline in organizations reporting a deal size greater than $10K

As a numbers guy, my first thought goes to statistics.

  1. Surely, the respondents can’t be exactly the same in 2010 & 2011. So if we have two different sample sets from companies of varying sizes and industries, how can we accurately compare?
  2. Is a sample of 745 enough to imply statistical significance?

With that said, it wouldn’t surprise me if there is indeed a decline in average deal size, market-wide. It makes sense – competition is tougher, and organizations may increasingly feel that they might better compete on price instead of value.

The bottom line is this:

If you have a relatively longer sales cycle and/or a larger deal size, you may have a greater need to establish vetted processes for lead generation, qualification, and nurturing. A full pipeline gives you a better chance to compete on VALUE rather than PRICE.

 

b2b sales

Comments

agree, this statistic is meaningless without applying it to vertical or solution set.
Posted @ Friday, January 20, 2012 11:46 AM by Gavin
Another factor that would drive down average B2B transaction size is the shift from perpetual licensing to SaaS pricing models for software. This results in much smaller initial transactions (though the long term annuity is usually higher).
Posted @ Friday, January 20, 2012 12:36 PM by Scott Armour
Does this reflect the move from Enterprise software solutions to SaaS solutions?
Posted @ Friday, January 20, 2012 12:50 PM by Fred Bement
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