We are delighted to present a recent commentary by Anthea Stratigos, Co-Founder and CEO of Outsell, Inc.  who is also a Co-Founder of BIIA.   

Anthea offers an industry (information) point of view withing the context of local and national economic condition.

“A Virtuous Circle”

Just when things start to get going, going starts to stop. The US economy in particular has been resilient but with gasoline over $6.00 a gallon in my crazy state and eggs (the kind you want to eat) over $10 a dozen ($8 if you can find them on sale!) it’s been a little rough. Thankfully the inflation numbers showed some improvement this week. We hope it persists cause we need interest rates to come down. Consumer spending makes the economy go around. The economy going around drives businesses. Businesses employ consumers and we get a virtuous circle until we don’t.

In data information services and vertical-tech, things looked good coming off the back of 2022 into 2023. Relief was palpable after three years of COVID insanity. Then the economy ground down on the heels of tech-layoffs Q1 2023, persistent and stubborn inflation and high interest rates, and  PE hitting a wall and let’s not forget the SVB banking melt-down.  

GDP drives our industry and 2023 wasn’t what we thought it was going to be.

Enter 2024. Relief was palpable. Three years of COVID insanity + 2023 insanity was behind us. Things looked good coming off the back of 2023. (Sense a cycle here?)

Clients entered the year optimistic. Then the fed decided inflation was persistent. Interest rates would remain high. Q1 optimism started to give way to some fits and starts and while the stock market is kind of ok, yesterday’s news was pretty good, we saw a glimmer of slow-up in our Q2 sales outlook with some key themes emerging:

  • Renewal cycles are lengthening. Our partner M3 Learning’s advice – start renewal cycles much sooner and do so under the premise of ‘insight reviews’. We say consider yourself always on notice.
  • GenAI is lengthening renewal contract cycles because there is now more ‘review’ for use cases, use privileges, what’s allowed and not. Layer in data security and privacy and expect contract reviews to draw out.
  • Budget authority and budget ownership is changing, more people are involved, sales cycles are more complex. Give your sales cycle time.
  • Relationship turnover is an issue. Many clients tell us they’re hearing ‘the people we worked with left – so we’re starting over’. From where we sit this is a ‘thing’ and we’re noticing it too!
  • Decision-making is just taking longer.
  • Companies cannot extract the price increases they did over the last two years; what was 8-10% is now 3-4%. Buyers are expecting major justification on price increase and it has to be around delivering ROI.
  • Companies are developing new SKUS to get around this rather than bundling more into existing products.
  • The new SKUs have to have an ROI story too. Be prepared to discuss or measure value.
  • Some new SKU sales are taking longer because of the need to have incumbent offerings reach their expiration. (The incumbent’s product renewal has to lapse.) This often means letting users try for free for a period and/or having to wait for the money to change hands.

And economic whip lash and geopolitical strife continues to be the halo under which we’re operating.

We are not being negative today. Simply the data is pointing to the potential for another mixed year. Outsell’s Annual Market Sizing and Segment performance stats are coming out soon. Stay tuned and we’ll keep you apprised of the realities in your sectors – what’s growing and not – what’s driving growth.  Take the next sales benchmark too – it’s confidential and will continue to provide an important barometer against which to operate.

About:  Outsell Inc. is a research and advisory firm. The Company provides independent, fact-based analysis and advice about competitors, markets, operational benchmarks and best practices. Outsell Inc. focuses primarily on the publishing, information and education industries.

The company offers over 25 years of data, analytics, and research experience in the data, information, and analytics industry. It provides access to market sizing, industry trends, and company profiles.

The Company is headquartered in California with additional operations in London.

To learn more about the capabilities of Outsell, click here.