State of BizXpand March 2024

State of BizXpand March 2024

We usually talk about industries and markets of our clients.  Today, I will talk about BizXpand and our market.

For us, the big inflection point was the „great SaaS re-evaluation“ of 2022– this is when the value of growth vs profits changed completely.  The re-evaluation dramatically reduced the global demand for engineering and business development teams.  Nearly all of our engineering services clients felt the hit almost immediately and were no longer viable clients.  Apart from that, the impacts were more subtle:

 

Our typical client shifted from being a ‚local hero‘ based in Warsaw looking to expand into DACH and is now more likely to be a well established company based in Paris that has substantial experience on the DACH market, may have cut global business development budgets, but still needs leads.   This shift from growth to efficiency is nothing surprising, but became very real for us despite the fact that our targeting did not change.  As a result, we adjusted our website and messaging to make us more suitable for an experienced buyer and moved away from the „what is outbound“.

 

Meeting rates stay strong, but conversion softened.  We get our leads 3 ways: referrals, inbound (eg. this blog post), and outbound („eating our own dogfood“).  Everything regarding quantity is roughly the same.  Outbound, if anything, converts to meetings at a slightly higher rate for us.  The biggest difference is that meeting conversion (first meeting to new client) is approximately half as good.  For us, the solution was simple.  Get 3x the outbound leads.  This worked and helps us grow when others are shrinking.

 

Our next new market for BizXpand is DACH itself.  Traditionally, we assumed that companies in DACH were well served by agencies focused on their local markets.  It will not come as a surprise that it is easier to get meetings for a Munich based company than a Barcelona based company when reaching out to a prospect in Nuremberg.  The surprise for us was how much DACH based companies spend on local-to-local outbound lead generation and how unsophisticated our competitors are.  As a result, we now have a new German language site (before we were only English) and are actively making our business more German-to-German friendly in order to pick up some of this market.  This, however, is still theory– we will hopefully see the effects in Q2.

 

Client churn rates are higher.  This is partially because we have good lead flow and feel confident enough to end collaborations when the market or the personal fit is not right.  The other reason is that there are a number of companies with significant lead flow pain and we find ourselves designing high difficulty campaigns.  Eg. an engineering services company needs to pivot away from selling skills and into a vertical segment that would have a more business centric value proposition; however, with this shift, industry references and differentiators are not yet especially strong.  So long as everyone understand the risks and can keep their cool, we are usually up for these big challenges– underdog wins feel so good.

 

Our team size is shrinking despite the increase in onboarding and number of active campaigns.  Part of this is due to building our own technology layer– Martin and I are both engineers by background and still think in terms of process so this type of efficiency becomes natural.  We are still not using AI for designing messaging, evaluating sentiment, responding to prospects or other operational tasks — all of our tests showed AI was weaker and the value of a prospect to our clients is far more important than a few cents in cost savings.  Instead, we do use AI when evaluating gender (eg. Mr. or Ms titles) — here there are specialty services that use AI and do work as good as human intuition.  We also use it heavily in programming our technology layer– with AI, I can program a solution myself faster than I can explain the requirement to a hired programmer in many cases.  We are still experimenting.  Today I just tried one of the open source LLMs– it shows some promise around company researching but AI is easy to get exited about but hard to get real value from.  Smarter hiring has also helped us reduce team size– in the last year we focused less on education but more on motivation and we also brought more of the team into the office despite the fact that we started as a remote-first company pre-pandemic.  That also really paid off.

Meetings-as-a-service
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Tools are evolving faster.  Gmail, LinkedIn, and Hubspot are becoming less permissive.  Automation tools are getting new features and our core tools are getting more stable. Data sources are easier to find even for GDPR nervous Germany.  A new generation of bounce detection technology is entering the market.  New AI products in Sales and Marketing are popping up like mushrooms– so many to evaluate.  This technology is all the behind the scenes work that our clients rarely think about but it’s impact on our business is huge and it eats up more time than we would like to admit.  Fortunately it is something we are good at.

 

In general, this is a fairly optimistic state of the business post.  If I had wrote this 12 months ago, I am sure the tone would have been substantially different.  Like an Instagram photo, we get to choose when and where we document ourselves.  Now seemed like as good a time as any.

 

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