Adapting Your Sales Benchmarks & Strategy for Economic Uncertainty in 2023

As we head into 2023, sales organizations are keeping a close eye on their key performance indicators (KPIs) and benchmarks. While 2022 saw many companies regain their footing after pandemic-induced disruptions, growing concerns of a potential recession have sales leaders wondering how their metrics may change in the coming months.

To help you prepare, let‘s take a look at the latest data around crucial sales benchmarks like win rates, close rates, and deal sizes. We‘ll discuss how those numbers could shift if economic conditions worsen, and share five strategies to fortify your sales performance against any potential downturns.

Key Sales Benchmarks from 2022

HubSpot‘s 2022 Sales Strategy Survey gathered responses from over 1,000 sales professionals to gauge the state of key metrics. Here are some of the most noteworthy findings:

Sales Win Rates

• 27% reported win rates between 11-30%
• 23.1% achieved win rates between 31-50%
• 15.2% saw win rates over 61%

Compared to 2021, 38% of respondents said their win rate increased, while only 13% saw a decrease. This suggests that many sales teams hit their stride and improved conversion of pipeline opportunities into customers.

Close Rates

• 24.3% had close rates between 21-40%
• 21.5% reported close rates between 41-60%
• 18.6% achieved close rates over 61%

35% of reps said their close rate went up from 2021, versus just 12% who experienced a decline. Again, this points to strong sales execution and healthy demand in 2022.

Average Deal Sizes

• 15.3% had an average deal size between $1,000-$5,000
• 13.8% saw deals average between $5,000-$20,000
• 10.2% achieved an average deal size over $50,000

Average deal sizes remained steady for 56% of respondents compared to 2021. 34% were able to increase their average deal size, while only 8% saw it shrink. This indicates that budgets remained healthy and many sales teams succeeded in capturing more value per account.

So in summary, 2022 shaped up to be a strong year for most key sales benchmarks. Win rates, close rates, and deal sizes largely improved or remained stable for the majority of organizations surveyed.

How Could Sales Benchmarks Change in an Economic Downturn?

While the 2022 numbers paint an optimistic picture, it‘s crucial to recognize how quickly that could change if a recession hits. During economic contractions, both consumers and businesses tend to reduce spending and scrutinize purchases more closely.

As budgets tighten, sales teams should brace for:

Longer, More Complex Buying Cycles

When facing uncertainty, companies often involve more stakeholders in purchasing decisions. Deals that may have required only one or two approvals before might now need sign-off from three or more executives. Sales reps will need to navigate more complex org charts and tailor their approach to a wider range of buyer personas.

More No-Decisions & Pushbacks

Recessions breed risk aversion. Prospects become more hesitant to spend limited funds on new initiatives. Reps should expect to face more stalled deals, as buyers postpone decisions to "wait and see" how the economic situation evolves. Pushback on pricing may also increase as clients look to trim costs however possible.

Heightened Competition & Commoditization Pressure

As the pool of in-market buyers shrinks, competition for available opportunities will intensify. Prospects will likely evaluate more alternatives to ensure they‘re getting the best possible deal. Sales teams will need to double down on articulating their unique value and resist the urge to compete on price alone.

All of these shifts could put significant pressure on win rates, close rates, and deal sizes in the coming months. Sales leaders must act quickly to adapt their strategies and enable their teams to succeed in a more challenging environment.

5 Ways to Protect Your Sales Metrics During a Downturn

While the possibility of a recession can be daunting, there are several steps sales organizations can take to safeguard their performance:

1. Double Down on Ideal Customer Profiles

Not all prospects will be equally impacted by a recession. By developing a crystal clear understanding of your ideal customer profiles, you can focus resources on engaging companies with the most stable budgets and urgent needs for your solutions. Analyze past deals to identify traits like industry, size, growth rate, and technographics that correlate with strong lifetime value and retention.

2. Strengthen Value-Based Selling

In a downturn, buyers care less about flashy features and more about concrete business outcomes. Every sales conversation should be anchored in the specific value you can deliver for that account. Dig deeper into discovery to understand each stakeholder‘s goals and craft tailored messages that quantify your ROI. Back up assertions with detailed case studies, ROI calculators and success stories.

3. Prioritize Deals with Momentum

To keep pipelines healthy, focus energy on opportunities showing strong buying intent. Monitor buyer engagement signals like content downloads, event attendance, and trial activations. Double down on sales plays that are generating the most traction. Consider raising qualification thresholds to weed out deals that are unlikely to close in a timely manner.

4. Expand Within Existing Accounts

Acquiring a new logo can cost 5-25X more than retaining and growing an existing customer. To minimize acquisition costs and churn risks, look for expansion opportunities within your install base. Have AEs partner with Customer Success to identify accounts primed for upsells and cross-sells. Position additional offerings as a way to increase the ROI of the customer‘s initial investment.

5. Equip Reps for Sales Agility

Succeeding in a down market requires a high degree of adaptability. Ensure your sales reps have the training, content and tools to engage prospects across multiple channels (email, phone, social, etc). Encourage reps to experiment with new messaging and tactics, measuring results to iterate quickly. Foster a culture of learning, collaboration, and creativity to help your team navigate uncharted waters.

Keeping an Eye on Sales Benchmarks Is More Important Than Ever

As concerns of an economic slowdown loom, sales leaders must stay laser-focused on their core metrics. Monitoring changes in win rates, close rates, deal sizes and cycle times will help you spot risks and opportunities early.

While some declines may prove unavoidable if a full-blown recession hits, there are still plenty of ways to mitigate the impact. By combining a value-first sales approach with strong execution and adaptability, you can position your team to ride out volatility and emerge stronger than the competition.

Remember, economic downturns don‘t last forever, but the way you lead your sales org through challenging times can have lasting effects. Resist the temptation to make short-term decisions that could undermine your brand value and customer relationships. Stay committed to delivering exceptional experiences and quantifiable impact, and you‘ll be well equipped to achieve your targets in 2023 and beyond.