Sales teams are more optimistic after a tough year in 2024. Photo / 123RF
Sales teams are more optimistic after a tough year in 2024. Photo / 123RF
Those at the coalface of New Zealand businesses – the sales teams – don’t expect to see much revenue growth until the second half of 2025.
After reporting that 2024 was one of the toughest years they’ve faced, New Zealand’s sales teams are optimistic about recovery in 2025.
Sales andleadership consultancy Indicator, surveys about 500 sales team leaders to gauge how their teams are feeling about their prospects in the year ahead. Those leaders collectively manage nearly 8000 salespeople.
The mood is one of optimism and realism, said Indicator chief executive Mike Stokes.
“It’s still bad but we now see the light at the end of the tunnel,” he said.
While there was optimism about improvements over the next 12 months, many anticipate that the first half of 2025 will remain challenging.
In fact, 80% of sales leaders believed New Zealand would not emerge from the current recession until mid-2025 at the earliest.
“We have seen a small reduction in pessimism from 4% last year to 3% this year and an increase in the number of sales leaders who are bullish from 11% to 13%,” Stokes said.
Last year was the worst for growth that the survey had recorded since it began in 2017.
Only 39% of companies achieved growth, which fell from 54% in 2023 and was considerably lower than the 66% in 2022. The number of companies that achieved growth was the lowest since 2017.
Some 54% of companies also noted an increase in the length of their sales cycles.
It was worth noting that salespeople were generally an optimistic bunch by nature, Stokes said.
The state of the economy was the biggest challenge in 2024 although, on the plus side, inflation dropped out of the top three challenges.
The second biggest challenge was the reduction in client budgets, with the threat to the global economy third.
However, 68% of sales leaders did expect to see revenue growth across 2025 with almost half targeting increases over 10%.
Some 28% expect things to remain flat and just 4% expect to see revenue fall.
“We see a slight increase in optimism and a small reduction in pessimism for 2025,” Stokes said.
Mike Stokes, chief executive of Indicator. Photo / Supplied
“Sales leaders are under no illusion that 2025 will still have significant obstacles.”
Sixty per cent of sales leaders believed that New Zealand would come out of recession in the second half of 2025, he said.
Australia v New Zealand
This year the survey was also conducted in Australia, offering some comparison between the two economies and the broader outlook of the sales culture.
One big difference in the transtasman results was that more Australian businesses saw revenue grow in 2024. Just 39% of Kiwi sales teams reported revenue growth compared to 51% in Australia.
Optimism about the year ahead was also stronger across the Tasman with 51% of Aussies feeling either bullish or reasonably upbeat about it. That compared to 42% of Kiwis.
There was one significant piece of data on which the Aussies were a long way ahead, Stokes said.
The average amount that companies invested in the development of each salesperson was $5456 in Australia versus just $2979 in New Zealand.
“The slower economy has sparked an interesting return to traditional sales methods such as outbound calling, deliberate networking and a reliance on personal networks which were listed as the top ways to generate leads,” Stokes said.
The survey revealed that only about 50% of companies have a well-defined and documented sales process.
They identified the strength of their relationships as the primary reason for winning deals.
The two main reasons for losing deals were attributed to being beaten by competition and clients not making a decision.
“It raises an important question, are companies investing enough in their sales teams to address these challenges?” Stokes said.
“We noted that 63% of salespeople received some form of formal development with the average spend per person sitting at close to $3000. This is almost half of what our Australian counterparts invest.”
Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
