The Sales Enablement Market Is Consolidating – and It’s a Good Thing

Author: 
Jason Liu

Sales enablement software has been around for a while now. You may already have a solution in place for your company, you may be looking for one, or maybe you’re just familiar with the term.

What you might not know, however, is that the sales enablement market is poised for a major paradigm shift that will forever alter sales enablement platform strategies and set the industry on a new path.

History of the Sales Enablement Market

Before sales enablement platforms existed, many companies had no definitive way to ensure their sales teams were fully knowledgeable about products, services, go-to-market strategy, buyer base, etc., regardless of their experience in sales, the industry or the company. While sales training is important, it’s only the beginning – and many sales reps forget the best practices and fine details they learn in training as time goes by.

Early sales enablement platforms appeared around 1999, and were little more than sales portals with content on a company Intranet that sales people could access. Since those days, the market has evolved into a robust industry with multiple types of platforms that include features like micro prescription of content, predictive delivery of content, content engagement analytics, automated proposals, coaching and training, and more.

As more companies realize the benefits of implementing sales enablement, the user base has changed from tech enthusiasts and early adopters to the mainstream. Because of this sudden demand, the industry has experienced explosive growth in recent years, with the number of vendors more than doubling between 2005 and 2015 (current estimates are 140 to 160 companies, including point solutions) and an investment heatwave infusing billions into companies’ portfolios. This has created a $700 million market spanning dozens of companies that is expected to be worth $5 billion by 2021 – and this volume is creating new challenges for the customers using the products.

Market Oversaturation

Because of the plethora of products in the market, buyers are investing in multiple solutions. This means training sales people to use multiple tools with different functions and work in different ways, which takes time and creates confusion for sales staff.

The multitude of vendors also creates a suboptimal purchasing environment for customers; it can be difficult to sort out the best vendors for their specific company’s needs and make informed decisions when there are simply so many options to choose from.

Additionally, there is constant turnover among vendors. A company that loses its funding may go under, and their software becomes obsolete. Their customers then need to find a replacement and retrain staff. This not only affects sales, but also makes sales people confused and skeptical about learning new tools.

There is a market shift coming, however, that will solve some of these problems: consolidation.

Consolidation is often inevitable when a growing market reaches certain intersections: as customers shift from the early adopters to the mainstream, as the market becomes saturated and more stable companies move into the space.

The same shift occurred about a decade ago with the customer relationship management (CRM) market, and it’s happening again with marketing automation tools. Sales enablement platforms won’t be far behind.

The Move to Consolidation – and Why It’s Good News

While consolidation may sound intimidating, it’s actually good news for both customers and vendors. For starters, customers will see their options narrowed down to the highest quality vendors.

Customers will also be able to buy multiple integrated solutions at a more economical price, instead of buying multiple solutions and cobbling together a sales enablement Frankenstein.
 
This reduces total cost of ownership for the company and makes it less confusing for sales staff. When sales only needs to learn one vendor, staff will be willing to learn and actually use the solutions.

From a vendor’s perspective, fewer vendors in the space allows investors to share capital more equitably and accelerate vendor growth. Fewer companies will fail, reducing the odds of obsolete products creating customer frustration. As vendors, VCs and other investors continue to pump money into innovation in sales enablement, they create a cycle where the remaining vendors make better and better products.

What Buyers Need to Think About

The consolidation of the sales enablement market is still in the early days – but it’s important for sales enablement users, or those thinking of investing in a platform, to keep a few things in mind as the market changes.

Current and future users of sales enablement platforms should focus on who their best long-term partner will be, rather than being distracted by “disruptors” just entering the market. Many companies take a transactional, tactical approach to buying this type of software, but with the market shifting, it may be a smarter move to look at companies with the financial security to participate in the consolidation and the expertise to navigate it.

From a feature function standpoint, it’s important to look at the breadth of functionality in a platform as well as depth. Many buyers can get hung up on a single feature within a platform, but the strength of that feature and whether that platform is still around in a few years also depends on the strength and structure of the company.

It’s an exciting time for the sales enablement market, and both buyers and vendors should be positive about all of the coming changes. As the market continues to evolve and consolidate, pioneering vendors can bring together the highest-quality offerings into one portfolio, so buyers need only go to one vendor for a tightly integrated solution that is more economical and more functional. Everybody wins.

Jason Liu is CEO of SAVO Group. Liu can be reached at marketing@savogroup.com.