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