Thursday, 28 May 2020

After Recent Improvement, Deal Pipelines Shaky Last Week

For the last few months, businesses around the world have had to rapidly adapt to the impact of COVID-19.

In a time where it seems like things change every day, it can be difficult to gauge whether the challenges your business is facing are widespread.

That's why we're publishing week-over-week benchmark data for core business metrics like website traffic, email send and open rates, sales engagements, close rates, and more. These core metrics are split by region, company size, and industry cuts, so you can explore data for companies most similar to yours. You can find the data, and more context on the dataset and sources, here.

Because the data is aggregated from our customer base, please keep in mind that individual businesses, including HubSpot's, may differ based on their own markets, customer base, industry, geography, stage, and/or other factors.

These insights are refreshed every Thursday morning ET, and will be accompanied by this short writeup. You can find past writeups using this timeline.

Adapt 2020 HubSpot

We hope to establish useful benchmarks to measure your business against, and serve as an early indicator of when short- or long-term adjustments may be needed in your strategy.

What We're Seeing

Here are three key takeaways from last week's data:

1. After three weeks of improvement, new deals created and closed-won deals declined the week of May 18.

The volume of new deals created has trended positively for four of the last five weeks, but dropped 4% globally the week of May 18, sitting 11% below pre-COVID levels. The momentum in new deal creation appeared to be a promising sign of May and June business results, but last week's data calls this into question.

New Deals Created Closed

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Across industries, this metric continues to vary significantly. Structurally impacted industries like entertainment and travel dropped week-over-week and remain double-digit percentages below pre-COVID averages. However, manufacturing, consumer goods, and computer software — three industries that had seen deal volume return to or exceed pre-COVID levels — saw week-over-week decreases as well.

It's unsurprising that travel and entertainment are trending below other industries, but it's worrisome that three industries that appeared to be less structurally impacted are seeing declines. It's not yet clear whether the downturn in manufacturing and consumer goods is a sign of broader economic weakness, changes in buyer behavior, longer-tail slowdowns due to production environments impacted by the pandemic, or something else. We'll be watching these industries over the next few weeks to get a clearer picture of performance.

On the other hand, construction's new deal creation increased for the fourth week in a row and is 38% above pre-COVID levels; human resources also grew. Currently, all industries with the exception of construction are trending below pre-COVID averages.

Closed-won deals saw a significant drop week-over-week, declining by 17% and sitting at 27% below pre-COVID averages globally. This trend held in all regions and industries. Various holidays (Memorial Day, the end of Ramadan, and bank/public holidays) may have contributed to this decline, but the next few weeks of data will reveal whether this turndown is a trend or anomaly. Typically the volume of closed-won deals accelerates as we approach the end of the month, so we're curious what next week's data will reveal — will we see an end-of-month increase in sales activity, or is there a broader slowdown occurring?

2. Sales process metrics reveal misalignment in outreach and qualification.

Call prospecting volume decreased by 4% the week of May 18, consistent across all company sizes and regions. In the same time period, the number of meetings booked saw a small dip of 1.7%. Combined with the decline in new deal creation last week, another indication of future revenue, these declines are worrisome for sales leaders.

Sales email response rates remained flat week-over-week. All company sizes are trending below their pre-COVID response rates, but companies with 26-200 employees saw a 9% week-over-week increase in response rates. Across regions, APAC and NORTHAM saw slight week-over-week increases in response rates, while EMEA and LATAM saw declines.

Immediately following the shift to remote work after the pandemic declaration, we saw a sharp decline in call prospecting and pivot to email as sales teams adapted to their new working environment and businesses grappled with immediate instability. Email prospecting has averaged 50-60% above pre-COVID levels for the last two months, while call prospecting is down 17% compared to pre-COVID averages.

Sales teams are booking more meetings overall — total volume is 18% above pre-COVID benchmarks. However, those meetings have not converted to business at a corresponding level, suggesting that beyond the cashflow issues impacting deal volume, there's still significant misalignment at multiple steps of the outreach and qualification process. Over time, sales teams will need to return their pre-COVID outreach strategy — calling more and emailing less — to ensure outreach is actually effective.

3. Buyer engagement continues to increase, but marketers may be missing an opportunity to engage.

With a 3% week-over-week increase, marketing email send volume has reached a historic high — 34% above pre-COVID benchmarks. All industries with the exception of travel are emailing above pre-COVID levels; even the travel industry sent 36% more email week-over-week.

Buyers continue to seek out and engage with businesses at record levels:

  • Open rates are trending above pre-COVID levels for the 11th week in a row, at 17% above pre-COVID levels, but declined 3% last week.
  • Website traffic is trending above pre-COVID levels for the 15th consecutive week (20% above benchmarks), with a 3% week-over-week decrease.
  • The volume of buyer-initiated conversations has been steadily increasing as well, and reached a high of 34% above pre-COVID levels last week.
  • The average number of contacts added to databases increased 15% week-over-week and is currently 7% above pre-COVID levels. Interestingly, travel was one of only two industries last week to exceed pre-COVID benchmarks (the other is construction), suggesting that many travel companies are effectively engaging with their market even as their core business has been stalled.

Ad spend is trending below pre-COVID levels for the 12th consecutive week, and globally declined another 4% week-over-week after increases during the weeks of May 4 and May 11. Consumer goods is the only industry that is spending more on advertising compared to pre-COVID levels, and also the only industry that increased ad spend week-over-week. Leaders in other industries would be wise to assess whether a more affordable online advertising marketplace could benefit their businesses right now.

What This Means for Businesses

Sales teams need to reinvent how they prospect.

While buyer engagement reaches all-time highs, sales results have not come close to seeing a corresponding increase, suggesting that salespeople are reaching out to poor-fit prospects. This month has seen improvements in deal pipeline metrics compared to March and early April, an encouraging sign that more businesses are reentering buying processes — but it's too early to tell how much of this growth will be sustained. For now, it's a safe bet that your sales team should continue prioritizing high-interest, good-fit buyers rather than indiscriminately prospecting.

Resources to Help

Free Software to Get Started

Consider whether online advertising is a fit for your business.

The significant dip in advertising spend tells us that many businesses have paused their ad campaigns either temporarily or indefinitely. There's an opportunity for companies to enter a more affordable market. Whether or not this approach is right for your company entirely depends on your audience and offering, but if online ads work for your business, now may be a good time to un-pause campaigns.

Resources to Help

Invest in employees.

The last few weeks have been a volatile time for both business owners and employees. The HubSpot Research team surveyed over 1,000 consumers on their company's COVID-19 response, and found that 33% were likely or very likely to look for a new job in the next six months. Of that group, 77% rated work-life balance as "important" or "very important" in deciding what job to take. Burnout, already a concern pre-COVID for workers around the globe, will be even more important for employers to guard against as the pandemic progresses.

Resources to Help

Adapt 2020 HubSpot



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