2016 InsideSales.com Inc. 2

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2 No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of InsideSales.com. Requests for permission should be addressed to the Legal Department, InsideSales.com, 1712 South East Bay Boulevard, Suite #100, Provo, Utah InsideSales.com All rights reserved, including the right of reproduction in whole or in part or in any form InsideSales.com Inc. 2

3 TABLE OF CONTENTS Introduction... 4 Research Methodology... 5 Results Summary... 6 Improving Sales Confidence... 6 High-tech Thriving in Turbulent Markets... 6 Using Tech to Boost the Bottom Line... 7 Other Index Data... 7 Increasing Sales Deal Sizes Helping Drive Longer Sales Cycles... 7 Declining Close Rates Contributing to Growing Pipelines... 8 Analysis... 9 Improving Sales Confidence... 9 High-tech Thriving in Turbulent Markets Using Tech to Boost the Bottom Line Additional Index Data Sales Cycles Getting Longer Close Rates Declining Average Deal Sizes Trending Up More Deals in the Sales Pipeline Sales Growth Conclusion About the Research Team Yan Zou Bryan Parry Dave Elkington Appendix Metrics Definitions Survey Respondents Demographics InsideSales.com Inc. 3

4 INTRODUCTION The Business Growth Index, published by InsideSales.com Research, is a comprehensive research report that provides a regular pulse update on business sales growth, sales leader confidence, priorities and the impact of technology on sales performance. The Business Growth Index is the result of analyzing the world s richest database of sales pipeline information, including anonymized pipeline information related to more than 5.4 million pipeline transactions. This report serves as an essential guide for business executives, senior sales leaders, sales operations professionals and anybody else who is responsible for driving profitable, predictable revenue growth. The report provides unprecedented insights into sales growth drivers and team performance, specifically measuring efficiency and output, from a variety of companies and industries. The index reveals important indicators of sales growth in the past year as well as a look forward for sales growth in Sales leaders supplemented the pipeline data by answering survey questions, providing key observations about past performance and future outlook InsideSales.com Inc. 4

5 RESEARCH METHODOLOGY BLENDING HD DATA WITH QUANTITATIVE MARKET RESEARCH Researchers analyzed sales pipeline data (including data related to sales cycle length, close rate, deal size, opportunity count, and pipeline size) from InsideSales HD Forecast pipeline and forecast database, including anonymized details from more than 5.4 million sales pipeline transactions. We then expanded the analysis to consider certain firmographic and geographic traits of the companies involved in order to observe differences. The resulting HD Data provides precise and accurate insights about what is happening in sales pipelines. Additionally, researchers distributed a quantitative market survey to sales leaders in order to collect personal insight as to the root causes for some of the trends uncovered by analyzing sales pipeline data. The survey analysis includes answers from more than 600 respondents. Research note: Analysis of quantitative survey data uses the mean as a measure of center. Analysis of sales pipeline transaction data uses the median to exclude statistical outliers present in that data InsideSales.com Inc. 5

6 RESULTS SUMMARY Despite uncertain economic conditions during the first quarter of calendar 2016 sales leaders are confident in their view of 2016 sales outcomes, and are pursuing bigger deals in larger organizations. Many sales leaders are attributing their growth success to predictive technology that helps identify and target bigger deals. Improving Sales Confidence Despite what some analysts have called the worst start to a calendar year for both the Standard & Poor s 500 and the Dow Jones Industrial Average stock indices, sales leaders surveyed in late January and early February are bullish about sales growth forecasts for Select findings include: 76.6% of sales leaders predict either steady or accelerated growth in Overall, sales leaders projected 30.5% year-over-year sales growth, up from a reported 23.0% growth in Male sales leaders were measurably more optimistic than female sales leaders, but both are more bullish on 2016 than what they reported for 2015 growth. More seasoned sales professionals those aged 45 years and older are nearly twice as optimistic as any other age group. High-tech Thriving in Turbulent Markets In looking at industry-specific slices of data, the performance and confidence of the high-tech industry stood out. Software companies reported the highest 2015 sales growth (36.3%) and projected the largest 2016 growth (44.7%) of any industry in our data. Though the industry s sales cycles took longer (up 7.5% in 2015 vs 2014) and the number of deals closed declined (down 4.7%), tech sales pipelines actually saw a 10.8% bump in sales opportunities and a 9.7% increase in deal size. Home to Silicon Valley and other tech hubs, companies based on the USA s West Coast have also experienced on average a greater increase in 2016 InsideSales.com Inc. 6

7 number of opportunities (up 16.3% in 2015) than the rest of the country (up only 11.2% during the same period). Using Tech to Boost the Bottom Line Sales leaders report the use of emerging technologies has helped to bolster their sales team performance. Greater use of predictive seems to be driving higher deal size growth. Companies with over 20% estimated growth in deal size attributed their growth to predictive technologies at a rate double than those growing less than 5%. Despite the clear impacts of predictive tech to the bottom line, there s a significant missed opportunity among sales leaders as 82.6% still don t take advantage of business intelligence or data visualization tools in sales. Twenty percent plan to implement more of these technologies in In 2015 sales leaders most relied on CRM software (45.6%), sales intelligence tools (35.2%), sales presentation software (32.8%) and data/list services (20.8%) to gain a competitive edge. Other Index Findings Increasing Sales Deal Sizes Drive Longer Sales Cycles Sales organizations are driving growth by chasing larger deals, often through the use of predictive technologies. Not surprisingly, these larger deals are driving up average sales cycles. Average deal sizes climbed 5.5% in 2015, compared with a decrease in size of 2.5% in Interestingly, 17.1% of companies are using predictive technologies to successfully drive up deal size. After shortening 8.0% in 2014, sales cycles reversed that trend and got a bit longer in Average sales cycles across companies measured in this study increased by 6.4%, moving from an average of 75 days long to 80 days long. Sales leaders attributed longer sales cycles to chasing larger deals, increased competitive pressures, and changes in lead quality or quantity InsideSales.com Inc. 7

8 Declining Close Rates Contributing to Growing Pipelines With sales teams chasing larger deals and with lengthening sales cycles, sales teams experienced a slight 2.1% decrease in average close rates in 2015 when compared to 2014, while sales pipelines continued to show healthy growth (4.5%). The chart below compares 2015 index results for five key metrics (sales cycle, close rate, deal size, number of opportunities in the sales pipeline, and overall sales pipeline growth) with 2014 results: Metric 2014 (vs. 2013) 2015 (vs. 2014) Sales Cycle 8.0% Decrease 6.4% Increase Close Rate 1.8% Increase 2.1% Decrease Deal Size 3.5% Decrease 5.5% Increase Opportunity Count 10.0% Increase 12.6% Increase Pipeline Growth 4.3% Increase 4.5% Increase 2016 InsideSales.com Inc. 8

9 ANALYSIS AND INSIGHTS In analyzing both the HD Data and survey data collected for this report, several key trends stood out, including the increasing strength of sales confidence despite news headlines focused on economic uncertainty, some unique performance characteristics for one vertical industry high-tech and how sales teams are leveraging big data and predictive technologies across industries to boost their bottom line sales performance. Improving Sales Confidence Despite what some analysts have called the worst start to a calendar year for both the S&P 500 and the Dow Jones Industrial Average, sales leaders surveyed in late January and early February are bullish about sales growth forecasts for When asked about sales growth for 2016 vs. 2015, 76.6% of sales leaders predict either steady growth (similar growth rates as 2015) or accelerated year-over-year growth (higher growth rates than 2015). And 4.0% of sales leaders predicted strong sales growth acceleration for 2016, defined in this case as greater than 50 percentage point increase in sales growth vs Growth Projections for 2016 Deceleration 24% Strong acceleration 4% Acceleration 27% Steady growth 45% 2016 InsideSales.com Inc. 9

10 Overall, the total population of sales leaders surveyed projected a 30.5% yearover-year sales growth for 2016 vs. 2015, up from a reported 23.0% growth rate in Sales Growth Estimates Sales Growth 2015 Sales Growth 2016 Male sales leaders were measurably more optimistic than female sales leaders, but both are more bullish on 2016 than what they reported for 2015 growth Sales Growth Estimates by Gender Male Female Estimated Sales Change 2015 Estimated Sales Change 2016 More seasoned sales professionals those aged 45 years and older are nearly twice as optimistic about accelerating growth in 2016 vs when compared 2016 InsideSales.com Inc. 10

11 to sales leaders of a younger age. The more seasoned sales leaders are projecting a 10.8 point increase in sales growth in 2016, versus just 5.0 point increase from the younger group. Sales Growth Estimates by Age Younger than 45 years old Older than 45 years old Estimated Sales Change 2015 Estimated Sales Change 2016 High-tech Thriving in Turbulent Markets Despite current economic uncertainty, many industries reported growth in 2015 and project growth in However, tech companies in particular seem to be thriving in the current volatility. Software companies reported the highest 2015 sales growth (36%) and projected the largest 2016 growth (45%) of any industry in our data InsideSales.com Inc. 11

12 Sales Growth by Industry Entertainment Oil & Gas Computers & Electronics Media Consulting, Accounting, & Legal Aerospace & Defense Healthcare Automotive Software Transportation & Logistics Telecommunications Financial Services Travel & Hospitality Estimated Sales Change 2015 Estimated Sales Change 2016 Interestingly, the software sector reported this comparatively strong 2015 sales growth and projected stronger 2016 growth despite a number of what appear to be headwinds to sales growth reported across our HD Data. For example, high-tech reported lengthening sales cycles last year, up 7.5% in 2015 vs That s even slightly longer than the market-wide increase to sales cycles, measured at 6.4%. Change in Sales Cycle Length by Industry 10% 5% 7.5% 6.4% 0% High-tech Other 2016 InsideSales.com Inc. 12

13 In addition, high-tech is experiencing a declining close rate, down 4.7% in 2015 from % Change in Close Rate by Industry -1.0% -2.0% -3.0% -2.1% -4.0% -5.0% -4.7% High-tech Other And while high-tech sales pipelines actually saw a 10.8% bump in total sales opportunities during 2015 vs 2014, that s actually a smaller increase than was observed across the market as a whole. Change in Number of Opportunities by Industry 20% 18.3% 15% 10% 10.8% 5% 0% High-tech Other 2016 InsideSales.com Inc. 13

14 In what might be a lesson for sales leaders across all industries to process, one key metric that significantly improved for high-tech vs the market as a whole, and may be the driver behind their overall strong 2015 sales growth and 2016 projected sales growth, is an increase in average deal size. We observed a 9.7% increase in deal sizes for high-tech versus only a 7.0% growth for the market as a whole. 15% Change in Deal Size by Industry 10% 5% 9.7% 7.0% 0% High-tech Other Home to Silicon Valley and other tech hubs, companies based on the USA s West Coast have also experienced on average a greater increase in number of opportunities (up 16% in 2015) than the rest of the country (up only 11% during the same period) InsideSales.com Inc. 14

15 Using Tech to Boost the Bottom Line Sales leaders report the use of emerging technologies to help bolster their sales team performance. Sales teams are leveraging predictive technologies to help drive sales growth. Among sales leaders who reported sales growth in 2015, 17.1% of them said predictive tech helped them deliver growth. One way that predictive is helping drive sales growth is through larger deal sizes; 18.8% of sales leaders who reported deal size growth in 2015 indicated that predictive tech gave them a boost in driving larger deal sizes. And greater use of predictive seems to be driving higher deal size growth. Companies with over 20% estimated growth in deal size attributed their growth to predictive technologies at a rate double than those growing less than 5%. In 2015 sales leaders most relied on CRM software (45.6%), sales intelligence tools (35.2%), sales presentation software (32.8%) and data/list services (21%) to gain a competitive edge. Tech Use Rates % Usage Rate 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% CRM Data Viz/BI Sales Recruiting Sales Training Sales Compensation Gamification Data/List Services Sales Intelligence Sales Communications Video Chat Social Texting Sales Presentations Sales Quote and Proposal Contracts Predictive Analytics Other Sales Technology 2016 InsideSales.com Inc. 15

16 ADDITIONAL INDEX DATA As a recap, the core observed sales performance results for 2015 vs are as follows: Metric 2014 (vs. 2013) 2015 (vs. 2014) Sales Cycle 8.0% Decrease 6.4% Increase Close Rate 1.8% Increase 2.1% Decrease Deal Size 3.5% Decrease 5.5% Increase Opportunity Count 10.0% Increase 12.6% Increase Pipeline Growth 4.3% Increase 4.5% Increase While these overall numbers give a broad picture of sales performance, we ve segmented the population by a few key firmographic and geographic factors in order to gain additional insight. The firmographic factors we focused on were a company s annual revenue, employee count, and industry (specifically comparing high-tech industries against all others). Geographically, we focused on the West Coast and compared it with the rest of the data. Sales Cycles Getting Longer Through an analysis of our HD Data, we learned that in 2015, average sales cycles increased by 6.4%, going from 75 days to 80 days. However, some subgroups were affected more than others. Larger companies (as measured in revenue or number of employees) experienced longer sales cycles. Tech companies in general experienced longer sales cycles as well, although companies based on the West Coast of the USA experienced shorter sales cycles InsideSales.com Inc. 16

17 When asked what the top factors were driving up sales cycle length, the top three drivers cited by sales leaders were competitive factors, going after larger deals, and changes in lead quality/quantity. Changes in Sales Cycle Length by Sub-Group Change in Sales Cycle Length by Annual Revenue 8% 7.2% 6% 4% 2% 3.7% 0% > $1 Billion Revenue < $1 Billion Revenue The data suggests that companies with over $1 billion in annual revenue had a greater median increase in sales cycle length than companies with lower revenue. Change in Sales Cycle Length by Employee Count 8% 6% 4% 2% 0% 6.6% 7.1% > 500 Employees < 500 Employees 2016 InsideSales.com Inc. 17

18 Companies with more than 500 employees experienced a slightly smaller median increase in sales cycle length than those with fewer than 500 employees. Change in Sales Cycle Length by Industry 8% 7% 6% 5% 4% 3% 2% 1% 0% 7.5% 6.4% High-tech Other Companies in high-tech industries experienced a greater median growth in sales cycle length than those in other industries. Change in Sales Cycle Length by Geography 8% 7.3% 6% 4% 2% 4.0% 0% West Coast Other Companies based on the West Coast didn t have as large of an increase in median sales cycle length as companies elsewhere. While both our HD Data and our market survey data indicated sales cycles got longer in 2015, there was a marked difference between the actual changes reported by HD Data and the perceived changes reported by sales leaders in our 2016 InsideSales.com Inc. 18

19 market survey. Respondents to the market survey were somewhat more optimistic in their estimates of changes to sales cycles, estimating that sales cycles had only grown longer by 2.6% on average, whereas our HD Data reported a median increase of 6.4%. Top Drivers for Changes in Sales Cycle Length To understand what factors were making sales cycles longer, we asked sales leaders to identify specific factors that increased or decreased their average sales cycle. The top three drivers cited by sales leaders were competitive factors, going after larger deals, and changes in lead quality/quantity. 35.7% of respondents indicated that competitive pressures where driving sales cycles longer, while 9.0% reported that changes in the competitive landscape were actually helping to shorten their sales cycles. 35.5% indicated that pursing larger deal sizes were driving sales cycles longer. 35.0% indicated that changes in lead quality or quantity were driving cycles longer. Note that changes in lead quality or quantity also represented the top reason cited for improvements to sales cycle length, with the most respondents (16.6%) indicating that lead quantity or quality was a factor in actually making their sales cycles shorter. It s interesting to note that the leading cause given for decrease in sales cycle, change in quality or quantity of leads, is also the third most common reason given for why their sales cycle got longer. Sales leaders clearly see the importance of having high quality and quantity of leads as it appears to have an impact on the sales cycle length in either direction. Of those who reported that the quantity or quality of leads had an effect on their sales cycle, many stated that they have changed their lead qualification criteria, some lowering the bar in order to obtain more leads, others raising it in order to obtain higher quality leads at the expense of having fewer leads InsideSales.com Inc. 19

20 Cause of Changes in Sales Cycle Length % of Respondents 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 36.8% 36.1% 35.9% 16.3% 13.0% 9.2% 33.2% 33.0% 8.2% 10.3% 30.2% 9.0% 26.0% 13.6% 5.0% 0.0% Changes in average deal size Competitive factors Changes in lead quantity or quality Changes in our products or services Changes in organization Changes in size of organizations being targeted Changes in our win percentage Increased Decreased Close Rates Declining In analyzing our HD Data set, close rates decreased by 2.1% overall in 2015, but the firmographic and geographic slices show some interesting differences, changing the direction of the trend in some cases InsideSales.com Inc. 20

21 For example, larger companies (annual revenue greater than $1 billion) experienced better close rates in 2015 vs. 2014, while smaller companies saw a decrease in close rate over the same period. Change in Close Rate by Annual Revenue 4% 2% 0% -2% -4% -6% 2.0% -4.7% > $1 Billion Revenue < $1 Billion Revenue However, when slicing pipeline data by number of employees, larger companies (those with more than 500 employees) saw a greater decline in close rates than those with fewer employees. Change in Close Rate by Employee Count 0% -1% -2% -3% -4% -3.0% -2.1% > 500 Employees < 500 Employees 2016 InsideSales.com Inc. 21

22 Companies in high-tech industries experienced more than double the median decrease in close rate than those in other industries. 0.0% Change in Close Rate by Industry -1.0% -2.0% -3.0% -4.0% -2.1% -5.0% -4.7% High-tech Other Companies based on the West Coast had a greater decrease in median close rate than companies based elsewhere. Change in Close Rate by Geography 0% -2% -4% -6% -4.7% West Coast Other -0.4% Average Deal Sizes Trending Up Through an analysis of our HD Data, we learned that in 2015, average sales deal sizes reversed the trend and grew by 5.5% on average, after a decline of 3.5% the previous year. When asked what the top factors were driving up average deal size, the top three drivers cited by sales leaders were targeting larger companies, changes to product portfolio or pricing, and changes in lead quality/quantity InsideSales.com Inc. 22

23 However, some subgroups were affected more than others. Larger companies (as measured in revenue or number of employees) experienced bigger deal sizes, as did companies in the high-tech industry. Notably, companies based on the West Coast of the USA experienced the strongest deal size growth of all subgroups analyzed, with an 18.5% growth in average deal size. Companies with over $1 billion dollars in annual revenue had a median decrease in deal size, while companies with lower revenue saw an increase. Change in Deal Size by Annual Revenue 20% 10% 0% -10% -8.6% 14.1% > $1 Billion Revenue < $1 Billion Revenue Companies with more than 500 employees experienced a smaller median increase in deal size than those with fewer than 500 employees. 12% Change in Deal Size by Employee Count 11.9% 11% 10% 9% 10.6% > 500 Employees < 500 Employees 2016 InsideSales.com Inc. 23

24 Companies in high-tech industries experienced a greater median growth in deal size than those in other industries. 15% Change in Deal Size by Industry 10% 5% 9.7% 7.0% 0% High-tech Other Companies based on the West Coast had a strong increase in median deal size, when companies elsewhere had a slight decrease in median deal size. The overall increase of 5.5% in deal size appears to be greatly influenced by the dramatic increase of 18.5% on the West Coast. 20% 10% 0% -10% Change in Deal Size by Geography 18.5% -2.8% West Coast Other This general increase in deal size helps to compensate for the fact that the sales cycle length also generally increased in the past year and allowed the overall sales to grow from 2014 to Top Drivers for Changes in Average Deal Size To understand what factors were driving up deal sizes, we asked sales leaders to identify specific factors that increased or decreased their average deal size in 2016 InsideSales.com Inc. 24

25 2015. The top three drivers cited by sales leaders were pursuing larger companies, changes in their product portfolio or pricing, and changes in lead quality/quantity. 41.9% of respondents indicated that their average deal sizes were getting bigger because they had changed which companies they were targeting. 38.0% indicated that changes to their product or services (including new product offerings and/or pricing changes) were helping drive up average deal size. Echoing a trend seen in factors driving sales cycles, 36.5% of respondents indicated that changes in lead quality or quantity were helping increase average deal size. Note that changes in lead quality or quantity was also one of the top reasons cited for reductions in average deal size, with 10.4% indicating that lead quantity or quality was a factor in actually making their deal sizes smaller. Again, the contrast between HD Data and survey respondents perceptions were interesting. HD Data showed that deal sizes had an overall median increase of 5.5%, but survey respondents were even more optimistic, estimating their deal sizes grew 7.3% on average InsideSales.com Inc. 25

26 Our survey presented respondents with a list of potential reasons and asked them to identify if these caused their deal size to increase or decrease, or if they had no effect on deal size. Cause of Deal Size Change % of Respondents 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% 43.2% 38.5% 37.4% 5.9% 7.0% Changes in our products or services Changes in size of organizations being targeted 10.4% Changes in lead quantity or quality 35.0% 7.1% Changes in organization 30.2% 30.0% 9.3% Competitive factors 37.1% 6.6% 8.0% Changes in go-to market Changes in our win percentage Increased Decreased The causes most frequently attributed to an increase in deal size were changes in size of organizations being targeted and changes in products or services. Similar to the case with sales cycle length, respondents also reported that changes in lead quality or quantity were also a major influencer on deal size (the third most popular answer both for increasing deal sizes and for decreasing deal sizes). The next most common causes given for decrease in deal size were changes in size of organizations being targeted and changes in go-to markets. Respondents who reported an increase in deal size due to changes in size of organization being targeted mentioned that they organized their leads into tiers based on how much they were likely to spend and targeted companies that would be more likely to become partners rather than just make a one-time deal. More Deals in the Sales Pipeline In analyzing our HD Data set, the total number of opportunities in sales pipelines ( opportunity count ) increased by 12.6% overall in 2015, building on the 10.0% increase observed in Larger companies (based on either revenue or 2016 InsideSales.com Inc. 26

27 employee count) are experiencing more pronounced increases in opportunity count, but high-tech companies are experiencing smaller increases in general than the overall market. The data suggested that companies with over $1 billion dollars in annual revenue had a smaller median increase in total number of deals in their pipelines than companies with lower revenue. Change in Number of Opportunities by Annual Revenue 16% 15.5% 15% 14% 13% 12% 13.6% > $1 Billion Revenue < $1 Billion Revenue 2016 InsideSales.com Inc. 27

28 Companies with more than 500 employees experienced a smaller median increase in total number of opportunities in their sales pipelines than those with fewer than 500 employees. Change in Number of Opportunities by Employee Count 40% 30% 20% 10% 25.2% 29.0% 0% >500 Employees <500 Employees High-tech companies experienced slower year-over-year growth, at 10.8%, in total pipeline opportunities in 2015 vs. all other industries at 18.3%. Change in Number of Opportunities by Industry 20% 18.3% 15% 10% 10.8% 5% 0% High-tech Other 2016 InsideSales.com Inc. 28

29 Interestingly, companies based on the West Coast saw a greater increase in total pipeline opportunities (up 16.3%) versus companies elsewhere. Change in Number of Opportunities by Geography 20% 15% 10% 5% 0% 16.3% West Coast Other 11.2% 2016 InsideSales.com Inc. 29

30 SALES GROWTH While the changes in these metrics are useful for describing the performance in a sales organization, the most important metric is the overall sales. The survey asked respondents to estimate how their sales growth grew in 2015 compared to 2014 and then how they expected their sales to grow in 2016 compared to Sales Growth Estimates The increase in sales cycle length and the decrease in overall close rate 0 Sales Growth have a negative effect on sales, but 2015 the increase in deal size and total number of opportunities led to an overall increase in sales. Sales Growth 2016 Next year s growth is expected to be even higher than this past year s. Over 75 percent of all survey respondents predicted either steady or accelerated growth in In all industries and demographics, the average estimate for 2016 was greater than for CONCLUSION Many of the changes in these metrics that happened in 2014 were reversed in In both years, there has been a trend that when deal sizes increase, sales cycles increase, and when deal sizes decrease, sales cycles decrease with them. This year, these companies, whether by strategy or by chance, increased their average deal size at the cost of a longer sales cycle. The most dramatic examples of these increases in deal size were seen on the West Coast and in high-tech industries. High-tech industries also saw a dramatic increase in sales cycle length, but the West Coast did not increase in sales cycle length as much as elsewhere. Companies with an annual revenue over $1 billion were an exception to this, as their deal sizes decreased by 8.6% InsideSales.com Inc. 30

31 Deal close rates decreased an average of 2.1% this year, which also may have contributed to the increase in sales cycle. The only exception to this general trend was in companies with an annual revenue over $1 billion; these companies saw an increase of 2.0% in close rates. Opportunity count and pipeline size are the only metrics that continued to grow across both 2014 and The subgroup with the largest increase in median number of opportunities pursued was companies with fewer than 500 employees. Finally, the following table provides a snapshot of the different revenue, employee count, industry and geography slices presented in this report. Metric Revenue Employees Industry Geography < $1 Billion > $1 Billion < 500 > 500 Hightech Other West Coast Other Sales Cycle 7.2% 3.7% 6.6% 7.1% 7.5% 6.4% 4.0% 7.3% Close Rate 2.0% -4.7% -3.0% -2.1% -4.7% -2.1% -4.7% -0.4% Deal Size -8.6% 14.1% 10.6% 11.9% 9.7% 7.0% 18.5% -2.8% Opportunity Count 13.6% 15.5% 25.2% 29.0% 10.8% 18.3% 16.3% 11.2% 2016 InsideSales.com Inc. 31

32 ABOUT THE RESEARCH TEAM Yan Zou Yan Zou is Senior Director of Data Science at InsideSales.com. Prior to InsideSales, she was the Head of Product and Data Science at H2O, a company specializing in big data machine learning algorithms. Before that, she was the Principal Data Scientist at Marketo, responsible for all aspects of data science from strategy to products. Yan also spent years in the financial services and investment management industries building quantitative models and developing investment strategies. She holds a PhD in Engineering Economics System and Operations Research from Stanford University. Bryan Parry Bryan Parry joined InsideSales.com in January 2016 as a Research Analyst. In this role, he is responsible for performing analysis to discover insights related to sales acceleration and the sales industry in general in order to support InsideSales position of innovation and leadership. Bryan received a Bachelor of Science in statistics from Brigham Young University. Presented by David Elkington David Elkington has a rich background in technology, venture capital and corporate development. As CEO and Chairman, he has led InsideSales.com to strong year-over-year growth, David has been active in the evolution and definition of the inside sales industry and speaks regularly. He is co-author of the groundbreaking Lead Response Management industry study, done in conjunction with James Oldroyd, PhD (visiting Research Fellow at M.I.T.). David has coauthored articles that have appeared in Harvard Business Review, Kellogg School of Management, Forbes, and other academic and industry publications. He is recognized both locally and nationally as a leader and entrepreneur in the cloud computing and inside sales/remote selling spaces. David serves on the board of ProvoTechX, on the advisory board of the American Association of Inside Sales Professionals (AA-ISP), and on the BYU CVLC advisory council. He has a background in computer science and holds a Bachelor of Arts degree in Philosophy from Brigham Young University, with minors in Business, Japanese, and Hebrew InsideSales.com Inc. 32

33 APPENDIX Metrics Definitions Deal size: Total dollar amount brought in by each sales contract Sales cycle length: Number of days that sales opportunities sit in the funnel Close rate: Percentage of closed opportunities within a cohort Open opportunities: Total number of opportunities pursued during the year Pipeline: Value of total open opportunities Survey Respondents Demographics Gender Distribution Age Distribution 22.3% years old 5.9% Male Female years old years old 18.2% 23.8% 77.7% Older than 45 years old 52.1% Revenue Distribution 30.0% 25.0% 20.0% 15.0% 25.4% 10.0% 19.7% 5.0% 12.3% 0.0% Less than $5 million $5 to $19.9 million $20 to $49.9 million 4.8% 5.2% 3.3% 3.9% 4.2% 1.7% 5.3% 4.2% 9.9% $50 to $99.9 million $100 to $249 million $250 to $499 million $500 to $999 million $1 to $4.9 billion $5 to $9.9 billion $10 billion or more Don't know Prefer not to say 2016 InsideSales.com Inc. 33

34 Industry Distribution 0.0% 5.0% 10.0% 15.0% 20.0% Software Business Services IT Consulting and Outsourcing Services Other Business Services Business Consulting, Accounting, and Legal Healthcare (includes Hospitals) Other Industry Media - includes Publishing and Printing Telecommunications Services Computers and Electronics Transportation and Logistics Services - Industrial Machinery and Equipment Other Manufacturing Wholesale Distribution Insurance (includes P & C, Life, Health) Engineering Services Banking Travel and Hospitality Retail stores - includes Grocery, Apparel, Industrial Electronics Automotive (does not include Auto Real Estate and Facilities Management Construction-Related Services (includes Other Financial (does not include Life Sciences - Pharmaceutical, Biotech, Education (includes K- Colleges, Entertainment and Recreation Metals and Mining Electricity Consumer-Oriented Services Oil and Gas Other Media, Entertainment, Leisure, or Chemicals and Plastics Packaged Food and Beverage (does not Nonprofit organizations (includes Aerospace and Defense Securities and Capital Markets Clothing and Apparel - finished consumer Furniture and Home Furnishings (does not Paper, Wood, and other Raw Materials Water and Waste 2016 InsideSales.com Inc. 34