We are almost full 4 months into 2025. New AI models keep coming out, companies are firing and hiring sales reps left and right, the economy is keeping everybody on edge. In times like these, it's good to take a long look at some of the recent trends in tech sales related to deal velocity and compensation. The reports I'll review were highlighted to me by a friend of the newsletter Matt Harney.

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The key takeaway

For tech sales: If you are currently not in the upper 50% performance-wise when compared to your peers, you need to take a hard, long look at what you can do to improve. Time is running out, and the industry will spit you out over the next 2 years.

For investors: The companies that start to cut more aggressively in their sales teams and discuss their focus on sales productivity as a core part of that decision are likely to outperform the rest of their competition that is delaying the hard decisions.

State of GTM

The recent report by Ebsta and Pavilion visualized a number of metrics on what makes a top performer stand out in 2025:

This is mostly self-explanatory, but basically, if you want to rank in the top percentile, you have to generate more pipeline and qualify it faster. Pipeline generation without discernment is just chaos; overfocus on progressing existing business and delaying pipeline generation for "some other time" is a recipe for a PIP.

There is a lot to unpack here. I think that some of the key points are:

Negotiation ability and emotional control have a proportional effect on the final deal value and sales cycle length. If they think they can squeeze more out of you, they'll drag the buying decision until they can.
One of the big differences between A and B players is the "hopes and dreams" state of their pipeline.
Daily productivity is highly dependent on time management and focus.

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If companies expect developers to be "full stack" (i.e., can do both front-end and back-end for applications), then sales reps have definitely become FULL SALES CYCLE across the industry. If you are not generating your own pipeline, you have no longevity in the industry.

This one is a bit provocative but important. Most sales reps do a passable job of being likable, connect with their prospects and try to get meaningful traction. The big gap is their ability to question, qualify and drive towards a specific outcome that makes sense.

I like to call this “having a point of view”.

This one reflects also the reality of “new and expand” in most cloud infrastructure companies - most of the business is coming from upselling to the install base, rather than white space. Brand new accounts are much more difficult to break into nowadays across the board.

The recent “State of Enterprise Revenue 2025” report by Clari digs a bit deeper into the quantified impact of top performers vs the rest of the pack.

Source: The State of Enterprise Revenue 2025

Ouch.

Here is an ugly hint: the moment the 7.6% of revenue that the bottom 50% generates becomes the same as or higher than the cost of acquisition, we are going to see massive reduction in sales capacity.

The bottom 30% are already there.

Time to take a decision continues to creep up on average.

But it’s also highly correlated with deal size. Funnily enough, whether you are selling 100k deals or 1M deals, the time to close remains very similar.

This is a bit of a tricky one to wrap your mind around, but essentially what we see is that lost deals are taking significantly longer to be marked as such (sandbagging), and also in most cases you have a 2:1 or 3:1 ratio of pipeline vs. closed business. This allows you to have long-term coverage planning by assessing open (and well-qualified) pipeline prior to entering the quarter and understanding that the best way for you to reach your number is to have close to the "ideal" ratio.

Now let's close this with Betts Compensation Guide 2025. This report is introducing some interesting trends from a tech sales recruitment point of view.

If we have to summarize this, companies are starting to understand that they can’t be successful just by “ensuring coverage” - they need to actually target the top 30% that are bringing the majority of the revenue in the industry. This is a significant reversal from the bull market trend when everybody with a pulse got a job in the industry.

This is something I’ve covered extensively - we are seeing the “bottom” of the hiring pyramid to have completely collapsed. SDRs and BDRs are getting stuck for 2-3 years in the same role, with no real prospects of a promotion. They often choose to switch to a new org, just for a chance of a clean slate.

If we see the bearish scenario of 50%+ reduction of sales headcount, as companies opt to prioritize productivity for the upper percentile, the odds of getting a sales rep job diminish dramatically for new entrants into the space.

Even if the newbies get a job, it's most likely to be in one now considered a "low cost hub". The trick with those is that the sales roles they want to get promoted into would be only available for candidates close to their market, further reducing the chances of promotion.

This is a reasonable outline of the sales compensation ranges - the upper percentile in cloud infrastructure software pays another 10%-15% on top of this.

Source: RepVue Quarterly Cloud Sales Index

To close this off, we will see the full RepVue Q1’25 industry report next week. I’ve received permission to reveal an early spoiler on the quota attainment figure - we are looking at a slight improvement from Q4’24 (43.1%) to 43.4%.

The Tech Sales Newsletter #89: Reports from the field

The key takeaway

State of GTM

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