The State of SaaS sales - Q4 2024

Bridge Group is a B2B SaaS sales consultancy, and we chat with them quarterly about the sales environment.  Below is our latest conversation.  They do strategic assessments, write playbooks, and can also do management training and coaching.  Connect with Kyle Smith (ksmith@bridgegroupinc.com) if you need help building or re-building your sales processes.  We’ve hired them for our own portfolio needs multiple times. 

What is the state of the software market? We’ve had a lot of outreach as prospects are gearing up for their 2025 strategy.   There was a minor move in market sentiment to the positive, but it’s causing companies to really get overly excited.  But 2025 is done already – if you don’t have the ramped team  as of today, December 9th, you’re not going to hit a 2025 number by hiring hard in Q1 and hoping for a quick ramp and then great things in Q3 and Q4.  Everyone was focused on burn in 2024, so they’re not properly staffed to scale the way they hope in 2025. 

Why is that not obvious to the revenue leader? I don’t know.  It blows my mind.  It should be very obvious that you cant have a 3 to 6 month ramp with a 6 to 9 month sales cycle, hoping that you now have a team that closes significant deals for you in the back half of 2025.  We believe companies have over-corrected to profitability in 2024, such that they really don’t know what it’s going to take to scale in 2025. 

Where is AI in the conversation? Everyone is planning to hire hard, and no one is talking about AI replacing headcount.  The conversations are all about using AI to make their reps more productive, but I haven’t seen anyone use AI to supplant headcount.  It’s supporting headcount, not supplanting it. 

How does the hiring market look? There are a lot of great reps out there at all experience levels.  We have clients opening senior AE roles that are getting 100 applications a week.  In 2022, you may have had 2 applicants and you were having to offer crazy packages.  This environment is the opposite of what we saw in 2022.  Recent college grads are also impressing us; the sales program at UMass Amherst for instance is putting out really great candidates from undergrad.  They know more than I did in their 2nd year than when I graduated in my 4th year.  The recent college grad coming out of sales program is going to have skills you can build on more quickly.  Technology is making it easier as well: reps are getting thousands of at-bats using AI role playing.    I’m very high on recruiting recent college grads as a result, especially if you’re willing to invest in them and not just chew them up in an SDR program. 

What are you seeing in the marketing realm? Everyone is talking about brand marketing; they’re actually diverting from performance marketing to brand marketing which is fuzzier and hard to measure.  The reason for this is email marketing is getting harder every day, AI is making it harder still with all the content it’s creating, so you’ve got to  do a lot of brand work in order to drive leads.

So is AI saturating sales? Yes.  AI is resulting in reps doing a lot more output, but it’s less efficacious.  It’s  just too easy to create content and push it out, but it’s not really resulting in more production.  Email is getting lost and we believe texting may be the new “email”, but it cant be a text blast.  It needs to be personalized and prospects are getting more comfortable with getting texts. 

Is AI less relevant in software? AI is valuable for accelerating research and cleaning up your writing, but AI being built into products is something prospects ask about less and less.  Prospects are now assuming vendors are using AI to put out better product, but prospects are no longer saying “how does this leverage AI?” The question is reverting back to “how does this generate ROI?”  Being cutting edge with AI no longer matters; just put out product that works well.                  

What do you see in 2025? You’re not going to see as many 1:1 SDR to AE ratios.  AE’s will have to do even more prospecting than before.  AI is creating too much content that is less efficacious, so we’re going into 6 touch cadences that are thoughtful and far more focused versus 14 touch cadences that are broadly used across the prospect list with generic AI generated content.  The prospecting is going to be far more targeted and thoughtful in order to stand out.  Never ending bombardments of messaging is going to stop and isn’t working.  We think it will be a good 2025 for software, especially with political uncertainty behind us, expectations around more rate cuts, and expectations around reduced regulation.  Everyone is feeling better than they did at the beginning of 2024. 

Thank you for your readership.  See more blogs and SaaS data at blossomstreetventures.com.  Email the author at sammy@blossomstreetventures.com.