Go-to-Market Macro Economic Impact Study

Economic Impact Study

GTM Partners

Study

Report

G o - t o - M a r k e t E co n o m i c I m p a c t S t u d y D e c e m b e r 2 0 2 2 D e v e l o p e d i n p a r t n e r s h i p w i t h :

F r o m I P O ' s t o r e c e s s i o n a n d l a y o f f s 1 A r e c a l i b r a t i o n f o r e f f i c i e n t g r o w t h 2 O v e r c o m i n g t h e t a l e n t g a p 4 T h e i m p a c t o n b u s i n e s s p e r f o r m a n c e 3 H o w G T M t e a m s a r e r e s p o n d i n g 5 Key Topics © 2 0 2 2 G o T o M a r k e t P a r t n e r s , L L C . A l l r i g h t s r e s e r v e d . 7 r e c o m m e n d a t i o n s t o n a v i g a t e g r o w t h 6

From I PO ' s t o rec es s i o n a n d l a y o f f s

IPO Frenzy Old companies, unicorns, and overvalued! © 2022 Go To Market Partners, LLC. All rights reserved. G o o g l e T r e n d s - S e a r c h v o l u m e b y t o p i c Layoffs Led by Small and Midsize Recession FEAR March '20

Recession FACT Summer '22 IPO Frenzy Old companies, unicorns, and overvalued! © 2022 Go To Market Partners, LLC. All rights reserved. G o o g l e T r e n d s - S e a r c h v o l u m e b y t o p i c Layoffs Led by Small and Midsize Recession FEAR March '20

Recession FACT Summer '22 IPO Frenzy Old companies, unicorns, and overvalued! © 2022 Go To Market Partners, LLC. All rights reserved. Layoffs Led by large well known b2b brands and high flying tech companies G o o g l e T r e n d s - S e a r c h v o l u m e b y t o p i c Layoffs Led by Small and Midsize Recession FEAR March '20

Source: https://layoffstracker.com/united-states/ Layoff's spike up in Nov '22 - Big U.S. Technology Companies The majority of ~80K laid- off employees in Oct / Nov '22 are from big companies Smaller companies are much more sensitive to market volatility and had layoffs in H1 of '22 Usually starts with business roles followed by technology roles for companies that had multiple waves of layoffs Examples: HP, Cisco, Asana, Intercom, Pipedrive, Amazon, Meta, Salesforce, Twitter, Ringcentral, Zendesk, Liveramp, Seagate, Microsoft, Fiserv, Twilio © 2022 Go To Market Partners, LLC. All rights reserved.

A rec a l i b r a t i o n f o r ef f i c i e n t g r o w t h

Enterprise & Fortune 500 businesses are secure with the imminent recession, while Small businesses are focused on how to survive Small businesses are feeling vulnerable. They are focused much more on E c o n o m i c D o w n t u r n r e s e a r c h - up 144% from a year ago While Fortune 500 have remained fairly consistent with their posture on G r o w t h & D o w n t u r n , up ~12% only slightly more than a year ago © 2022 Go To Market Partners, LLC. All rights reserved. Enterprise businesses are less concerned researching both D o w n t u r n & G r o w t h (57% / 34%) at similar paces indicating they are preparing for both side-by-side E c o n o m i c D o w n t u r n research across all business segments peaked in July '22 Measures count of companies spiking in research on topic clusters by week. Source: Bombora Market Insight s

96% of Fortune 500 companies are concerned with the level of M a r k e t V o l a t i l i t y and therefore the lack of predictability compared with 50% in 2021 2021: 244,238 2022: 641,792 Increase: 163% 2021: 250 2022: 482 Increase: 92% Market Fortune 500 Companies are deeply concerned with inability to predict revenue © 2022 Go To Market Partners, LLC. All rights reserved. Total # of businesses of any size worried about V o l a t i l i t y is up 163% YoY Measures count of companies spiking in research on topic clusters by week. Source: Bombora Market Insight s

The shift to efficient growth is underway Growth at all cost Efficient Growth For the first half of 2022 it was G r o w t h at all cost. Since mid-Jun., focus on business R e s i l i e n c y has increased as much as 85% outpacing the G r o w t h only mindset. R e s i l i e n c y + G r o w t h = Efficient Growth Business Growth Category (68 signals) Topics related to the success of a company. A business grows when it expands a customer base, increases revenue or produces more product. Business Resiliency Category (81 signals) Topics related to an organization's ability to respond and adapt to disruptions or significant, unplanned changes that could threaten its operations, people, assets, or brand © 2022 Go To Market Partners, LLC. All rights reserved. Measures count of companies spiking in research on topic clusters by week. Source: Bombora Market Insight s

Brand & Demand Customer Expansion Revenue Operations <200 -25% 3% -2% 200-1K -24% 10% 3% 1K+ -7% 14% 13% Fortune 500 -1.5% 11% 32% Companies are recalibrating their Go-to-Market for efficient growth from what it was 18 months ago The Fortune 500 and Enterprise accelerating on R e v e n u e O p e r a t i o n s - need for greater predictability and efficiency All companies increased focus on C u s t o m e r E x p a n s i o n led by the Fortune 500, Enterprise, & Mid Market GTM teams are spending less time researching B r a n d a n d D e m a n d and more time on r e t e n t i o n and C u s t o m e r E x p a n s i o n strategies. Marketing budgets reigned in from 2021 highs are now inline. For the sub 2 0 0 it's preserve cash and hold on tight to customers © 2022 Go To Market Partners, LLC. All rights reserved. Measures count of companies spiking in research on topic clusters by week. Source: Bombora Market Insight s

Demand , Expansion , and RevOps - Come into balance last 90 days A Recalibration to Efficient Growth © 2022 Go To Market Partners, LLC. All rights reserved. Measures count of companies spiking in research on topic clusters by week. Source: Bombora Market Insight s

Traffic for the term Net Revenue Retention is up 230% on Google NRR is becoming the key metric for many VC's, Boards, and CEO's NRR requires a solid foundation of Gross Revenue Retention (GRR) NRR = GRR + Expansion (selling more to happy customers) © 2022 Go To Market Partners, LLC. All rights reserved. Executives beginning to lean in on Net Revenue Retention (NRR) Net Revenue Retention (Traffic) Source: Google search traffic via Demandwell

O v er c o m i n g t h e ta l ent g a p

© 2022 Go To Market Partners, LLC. All rights reserved. R e m o t e w o r k c h a l l e n g e s E m p l o y e e W e l l n e s s T h e G r e a t R e s i g n a t i o n S i l e n t q u i t t i n g T h e T a l e n t G a p © 2 0 2 2 G o T o M a r k e t P a r t n e r s , L L C . A l l r i g h t s r e s e r v e d . H o w g r e a t l e a d e r s a r e r e s p o n d i n g

Companies invest and transform to overcome the talent gap Leadership teams are investing in Talent Acquisition practices up 173% and internal transformation to become more attractive places to work © 2022 Go To Market Partners, LLC. All rights reserved. They let candidates experience the work and culture through their people Make it a decision that's beyond salary Wellness and life balance are more important than ever Hire for trust (bi-directional) People want to love what they do (so be lovable) Have a high standard for doing excellent work Source: Google search traffic via Demandwell

P r e C o v i d T a l e n t R e t e n t i o n T r a n s f o r m a t i o n Talent retention has become a top priority for leadership teams Creating a culture where employees can be deeply engaged with their work and the company mission is a top priority for leaders Covid changed the ways companies must compete for top talent © 2022 Go To Market Partners, LLC. All rights reserved. Buyer intent traffic for software by category. Source: G2

T h e i m p a c t o n b u s i ne s s p e r f o r m a n c e G T M P a r t n e r s S u r v e y L a u n c h e d N o v e m b e r 1 s t , 2 0 2 2

J u n ' 2 2 P e a k O c t ' 2 2 D r o p Significant drop in buyer demand for industry specific tech last 6 months but still higher than YOY © 2022 Go To Market Partners, LLC. All rights reserved. Buyer intent traffic for software by industry. Source: G2

H o w i s t h e c o o l i n g e c o n o m y i m p a c t i n g y o u r b u s i n e s s ? W e s u r v e y e d o v e r 3 0 0 c o m p a n i e s - a n s w e r s o n n e x t p a g e - h o w d o y o u c o m p a r e ? Higher than expected Has your m a r k e t i n g p i p e l i n e been impacted by economic conditions? Has your s a l e s v e l o c i t y been impacted by economic conditions? What most closely describes your r e v e n u e g o a l a t t a i n m e n t l a s t q u a r t e r ? What are you p r e d i c t i n g y o u r r e v e n u e p e r f o r m a n c e to be next quarter? Lower than expected Consistent w/ expectations Shorter Sales Cycle Longer Sales Cycle No Change Exceeded Goal Below Goal Met Goal 50% or less of plan 85+% of plan 50 - 84% of plan © 2022 Go To Market Partners, LLC. All rights reserved.

S M B & S m a l l M i d - M a r k e t 0 - 2 5 0 E m p l o y e e s E n t e r p r i s e 1 0 0 1 + E m p l o y e e s M i d - M a r k e t 2 5 1 - 1 0 0 0 E m p l o y e e s Pipeline Performance H a s y o u r m a r k e t i n g p i p e l i n e b e e n i m p a c t e d ? 50% of companies saw lower-than-expected pipeline generation in their last quarter, completely missing on their target. Regardless of size 38% of companies remained on track with their pipeline generation goals 38% 50+% Between 6-12% of companies are outperforming in the recession economy, and seeing acceleration in pipeline . 10% Key Takeaway: Companies experiencing challenges in pipeline this quarter will feel that impact in subsequent quarters. Take advantage of every opportunity and focus on improved conversion. © 2022 Go To Market Partners, LLC. All rights reserved. Lower than expected 52% Higher than expected 10% On Target 38% Lower than expected 50% Higher than expected 12% On Target 38% Lower than expected 55% Higher than expected 6 % On Target 39% 300+ companies responded

S M B & S m a l l M i d - M a r k e t 0 - 2 5 0 E m p l o y e e s M i d - M a r k e t & E n t e r p r i s e 2 5 1 - 1 0 0 0 E m p l o y e e s Sales Velocity Performance H a s y o u r s a l e s v e l o c i t y b e e n i m p a c t e d ? SMB, Mid-Market, & Enterprise saw longer sales cycle last quarter. There are still quite a few companies in all segments that have not experienced any impact on their sales cycle. 27+% 60% Key Takeaway: Large or small, over half of the organizations surveyed are seeing a slowdown in their sales cycle time. This requires more effort in selling, better coordination between marketing and sales, and a review of your current forecasting methodologies. Keep an eye on close-rate. © 2022 Go To Market Partners, LLC. All rights reserved. Longer Sales Cycle 60% Shorter Sales Cycle 13% No Change 27% Longer Sales Cycle 61% Shorter Sales Cycle 9% No Change 31% 250+ companies responded Between 9-13% of companies are outperforming in the recession economy with shorter sales cycles than before. 9+%

E n t e r p r i s e 1 0 0 1 + E m p l o y e e s S M B & S m a l l M i d - M a r k e t 0 - 2 5 0 E m p l o y e e s M i d - M a r k e t 2 5 1 - 1 0 0 0 E m p l o y e e s Revenue Attainment D i d y o u h i t y o u r r e v e n u e g o a l l a s t q u a r t e r ? SMB & small mid-markets companies saw lower-than-expected revenue attainment in their last complete quarter. Fewer larger and Mid-Market companies came up short. 57% of companies met or exceeded their revenue targets . 57% 62% Only 26% of enterprise businesses struggled to meet their revenue attainment goals, and over 74% met or exceeded their target . 74% Key Takeaway: While no segment is immune to revenue generation challenges, larger and more established organizations are finding it easier to meet their expected goals. © 2022 Go To Market Partners, LLC. All rights reserved. Below our Goal 62% Exceeded Goal 10% Met our Goal 28% Below our Goal 43% Exceeded Goal 17% Met our Goal 40% Below our Goal 26% Exceeded Goal 22% Met our Goal 52% 300+ companies responded

E n t e r p r i s e 1 0 0 1 + E m p l o y e e s S M B & S m a l l M i d - M a r k e t 0 - 2 5 0 E m p l o y e e s M i d - M a r k e t 2 5 1 - 1 0 0 0 E m p l o y e e s Future Quarter's Revenue W h a t a r e y o u p r e d i c t i n g y o u r r e v e n u e p e r f o r m a n c e t o b e n e x t q u a r t e r ? SMB & small mid-market companies are lacking confidence projecting to fall short on revenue goals this quarter . 69% Mid Market organizations are confident in their revenue planning and believe they will close near or above their target this quarter . 61% Key Takeaway: Larger businesses have activated recovery plans and are feeling confident in their ability to get back on track. Enterprise businesses tend to have more diversification of revenue or more cash on hand to support programs to motivate buyers. © 2022 Go To Market Partners, LLC. All rights reserved. 50 - 85% of Goal 61% 50% of Goal or Lower 8% 85+% of goal 28% 50 - 85% of Goal 32% 50% of Goal or Lower 6% 85+% of goal 61% 50 - 85% of Goal 15% 85+% of goal 85% 300+ companies responded Most enterprise organizations are confident in their revenue planning and believe they will close near or above their target this quarter . 85%

H o w GT M t e a m s a re r e s p o n d i n g

© 2022 Go To Market Partners, LLC. All rights reserved. Departments search for technology to improve GTM in a downturn Marketing leads the technology transformation HR and Sales teams are 2nd most innovative adopting technology to solve the ever changing landscape of hiring, diversity, remote work, employee enablement & engagement - Covid increased budgets Customer teams still lagging the adoption of technology to improve outcomes - historically lower budgets but making progress Buyer intent traffic for software by department. Source: G2

© 2022 Go To Market Partners, LLC. All rights reserved. The top Go-to-Market channels post COVID Email continues to dominate SEO near the top driven higher by its ability to build pipe efficiently Event-led growth for virtual, hybrid, in person events and video communication Pre covid - buyer intent was status quo across all channels Post covid - digital transformation - massive innovation of how to find and engage buyers sends buyer intent higher for key channels P r e C o v i d D i g i t a l T r a n s f o r m a t i o n Buyer intent traffic for software by category. Source: G2

Inbound-Led TYPE Content Marketing driving to conversion channels GROWTH LEVER Marketing harvests demand via paid, organic, social, email, to qualify and route to Sales EXECUTION Outbound-Led Coordinated and targeted account outreach Marketing & Sales: Account- based marketing & selling, 1:1 advertising, content hubs, SDRs Product-Led Product-driven adoption, usage & feature discovery Product facilitates deals, upsells, usage, expansion Channel-Led Develop a network of distribution agents Enablement focus to educate & support resellers, agencies, & certified partners Event-Led Premium event experiences to drive quality connections Targeted educational roadshow events, in-person, virtual, & hybrid Category-Led Create a movement around a transformative idea Thought Leadership driven by industry experts, influencers, and happy customers @ G T M P a r t n e r s Ecosystem-Led Product integration & symbiotic relationships App & data exchanges, co- marketing, integrated use cases Event-Led: A new type of Go-to-Market emerges © 2022 Go To Market Partners, LLC. All rights reserved. Event-Led M a r 2 0 2 0 Buyer intent traffic for event software by category. Source: G2 The 7 Types of Go-to-Market

GTM teams achieve efficient growth with tech enabled orchestration © 2022 Go To Market Partners, LLC. All rights reserved. Market and sell to ideal customers - Total Relevant Market (buyers that will find the most value with what you sell today) Lower your CAC with marketing spend targeting only qualified buyers Work the Buying Team not the lead Beat your competition to the deal with market intelligence and alerting Create relevant touch points based on buyer behavior Scale a proven sales motion across all reps Buyer intent traffic for software by category. Source: G2

7 recommendations to navigate growth

Ensure you have a clear ROI story to retain existing customers 1 NRR is your single most important metric to focus on right now 2 4 3 5 G T M R E C O M M E N D A T I O N S - 2 0 2 3 Growth at all costs has shifted to efficient growth at scale Experimenting with your GTM motions is more important than ever Get out of your spreadsheets and onto the road and calls with customers and future customers - there is no excel formula for "recession" 6 7 Leaders must drive clarity, focus and alignment - no truck of VC money to bail you out Adjust your product pricing and incentives to accelerate deals and unlock budget

The cooling economy is having a material impact on business results. Go-to-Market teams are scrambling to recalibrate towards efficient growth. This research is written for B2B executives, go-to- market leaders and practitioners. It will help you identify key trends and strategies to navigate your growth in an economic downturn. When the founders of GTM Partners started working with hundreds of companies on the concept of Go-to-Market(GTM), they came to the conclusion that there is a massive challenge facing B2B business leaders today. Though the issue can manifest in dozens of ways, it always boils down to a single concept: Go-To-Market is broken. We know that to make a bold statement like that, we need data, research, and market validation to back it up. Through our Data Partnerships, the development of the best-selling book "Move: The 4-question Go-to-Market Framework," and through the support of our founding members and Go-to-Market Technology Partners, we have validated that B2B leaders have a big problem to solve, and we believe that they shouldn't have to solve it alone. With proper attribution these slides can be used in board decks, company meetings, keynotes and presentations, and social media. Have questions or need GTM help? Please book an inquiry call at gtmpartners.com About This Report

Judd Borakove Chief Growth & Community Officer Lindsay Cordell Senior GTM Analyst Bryan Brown Chief Analyst © 2022 Go To Market Partners, LLC. All rights reserved. About GTM Partners Sangram Vajre CEO & Industry Expert GTM Partners, a data-driven Go-To-Market Analyst firm, helps organizations and GTM vendors achieve efficient growth by transforming their GTM strategy. We work with high-growth companies to help them unify their GTM teams and to provide them with lasting strategies and frameworks. GTM Partners with a mission to make Go-To-Market simple aims to be the voice of the industry for GTM. We do this by offering: Bryan is a SaaS pioneer and thought leader in the marketing and sales tech industry. He has both created and brought to market innovative software products and ideas while helping thousands of companies in their effort to grow revenue more efficiently. Sangram is a three-time best-selling author and co-founder of several organizations, including Terminus, The Peak Community, and most recently, GTM Partners. Sangram has been at the forefront of B2B marketing trends, the Flip- my-Funnel movement, and defining the Account- Based Marketing category, ushering in a new generation of go-to-market leaders. Lindsay is a practitioner turned analyst who studies best practices and trends in Go-to-Market and develops actionable models and blueprints for our clients. She has held both practitioner and leadership roles in almost every aspect of GTM, including Product, Marketing, Sales, Customer Success, Revenue Operations, and Enablement. Judd has coached hundreds of GTM executives and emerging leaders throughout his career. Judd specializes in both people and leadership for companies of all sizes. Most recently, Judd founded the Peak Community and has been fostering relationships between CMOs and emerging leaders facing GTM challenges. Data and benchmarks collected from data providers, including G2 and Bombora, as well as our community of the world’s fastest-growing companies. Research, best practices , and design frameworks to provide guidance on the best- in-class approaches to strategizing, executing, and tooling your Go-to-Market approach. Personalized advice and support from experienced leaders and practitioners that help you address business challenges in a manner that is authentic and specific to you. Our consulting work focuses on areas such as Go-to-Market strategy, creating a Point of View, and Go-to-Market execution strategy across the 8 pillars of GTM. Events and networking with industry leaders looking to define the category of Go- to-Market and revolutionize the way we create value for our organizations.

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