CSO Actions in Response to COVID-19 · Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=29, April n=100, May MTD n=22. Note: Percentages may not add up to

© 2020 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. This presentation, including all supporting materials,

is proprietary to Gartner, Inc. and/or its affiliates and is for the sole internal use of the intended recipients. Because this presentation may contain information that is confidential,

proprietary or otherwise legally protected, it may not be further copied, distributed or publicly displayed without the express written permission of Gartner, Inc. or its affiliates.

CSO Actions in Response to COVID-19Updated May 18, 2020

2 © 2020 Gartner, Inc. and/or its affiliates. All rights reserved. CM_GBS_918863

Initial reactions and near-term priorities

Given the rapidly evolving nature of the COVID-19 crisis, CSOs are seeking immediate

peer perspectives to ensure they are taking the proper actions on behalf of their

customers, their teams, their shareholders and themselves.

Conversations with 50+ CSOs taking place on a weekly basis from March 19 through

April 23, 2020, discussed a number of recommendations and actions in four key areas:

Financial Impact

Sales Expense

Customer Engagement

Seller Engagement


Financial

Impact


Financial impacts are uncertain and likely variable

The financial impact of COVID-19, and the related economic shock waves, have created tremendous

volatility in the financial markets, yet much remains unknown and uncertain. In the face of such

uncertainty, customer risk appetite for making significant purchases will remain low.

CSOs trended toward four conclusions:

Rebound timing

and readiness will

be critical; hedge

appropriately.

Model multiple

scenarios and

have a readiness

plan for all.

Sales targets

should not be

adjusted, yet.

Tighten forecasting

discipline to provide

the business with

improved visibility.

1 2 3 4


Sales leaders forecasts have generally settled for July through FY End

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=78, April n=100, May MTD n=22.

Note data may not add to 100% due to rounding.

-24%

-16% -16%

-16%

-11%

-11%

-18%

-11%

-11%

March April May (through 18 May)

Sales Leader Forecast OutlookVariance Over Time

Apr-Jun Jul-Sep FY2020


Healthcare remains among the most impacted sectors in the near-term

Industry

Apr-Jun

Forecast

Outlook

Jul-Sep

Forecast

Outlook

FY2020

Forecast

Outlook

Sales

Expense

Impact

Timeframe

Healthcare -23% -12% -15% -18% 13 Apr – 18 May

Banking, finance and

insurance -11% -11% -14% -15% 30 Mar – 7 May

Energy and utilities -15% -15% -15% -19% 3 Apr – 11 May

Manufacturing -14% -10% -7% -18% 17 Apr – 12 May

Services -11% -8% -5% -22% 5 Apr – 11 May

Technology and telecom -9% -8% -4% -18% 17 Apr – 11 May

Misc/Other -21% -14% -14% -17% 7 Apr – 13 May

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; n=128 companies; at least 7 companies within a sector to ensure representation.

Most sectors continue to see

a relatively improved financial

outlook, anticipating pent up

demand.

Sales expense impact are

(and have remained) similar

across sectors, with most in

the high-teens, low-20s

percentage impact.


The majority of sales leaders now no longer expect quota relief

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=78, April n=100, May MTD n=22. Note data may not add to 100% due to rounding.

*Apr reflects survey responses gathered from March and April timeperiods.

26%

15%

19%

7%

0% 0% 0% 0% 0%

33%

17%13%

20%

14%

1% 1% 0% 0% 1%

33%

9%

0%

9%14%

9%5%

0% 0% 0%

55%

Apr* May Jun Jul Aug Sep Oct Nov Dec Will not revise

Sales Leader anticipation of timing of sales target adjustments

March

April

May (through 18 May)May has seen a significant

uptick in number of sales

leaders expecting their

sales targets to not be

adjusted. This is the first

time a majority report they

do not expect relief.

For those expecting

adjustments, the timing

continues to extent later in

the year.


While uncertainty eases, sales leaders report conflicting demand signals, varying by sector

27% 19% 18%

42%47% 55%

31% 34% 27%


Believe pent-up demand should make up for lost revenue

Agree Disagree N/A or Unsure

60% 63%50%

28% 27% 50%

12%10%

0%


Currently seeing demand indicators softening


36% 35% 41%

37% 38%45%

27% 27%14%


Believe the COVID-19 implications will result in permanent revenue loss


Industry

March - % Agree

demand

indicators

softening

April - % Agree

demand indicators

softening

Healthcare 45% 67%

Energy & Utilities N/A 100%

Banking, finance and

insurance 71% 71%

Manufacturing 62% 63%

Technology and telecom 50% 43%

Services 50% 42%

Misc/Other 70% 81%Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=78, April

n=100, May MTD n=22. Note data may not add to 100% due to rounding.

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=78, April



Customer requests for financial flexibility have increased in recent weeks

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=0 (question

not asked), April n=27, May MTD n=22.

Note: Percentages may not add up to 100% because of rounding.

33%45%

63%55%

4%


Customers request price reductions more often than usual


63% 68%

37% 27%

5%


Customers request extended or creative financial term requests more often than usual


Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=0 (question

not asked), April n=27, May MTD n=22.



Timelines for return of customer demand are extending

Demand return timing

continues to steadily

extend outward, though

roughly a third of sales

leaders maintain an

expected a Jul-Sep

rebound.

33%

22%

9%

5%3% 3% 3%

21%

29%

19%

5%

14%

0%

5% 5%

24%

Jul-Sep ‘20 Oct-Dec ‘20 Jan-Mar ‘21 Apr-Jun '21 Jul-Sep '21 Oct-Dec ‘21 Beyond 2021 Demand has not waned

Anticipated timing of customer demand returning to pre-COVID-19 levels

April

May (through 18 May)

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; April n = 96, May MTD n= 22.



A view from the

CFO’s office


The vast majority of CFOs expect negative revenue impact


Hiring and T&E top the CFO’s reinvestment list

Perhaps not surprisingly, Sales incentive trips

are not a priority.


Further personnel cost reductions remain in view for many CFOs


The prospect of a second wave has shifted CFO priorities


Sales

Expense


While fewer companies are anticipating sales RIFs, uncertainty is higher

-17.50%

-18.45%

-15.91%


Sales Expense Outlook

10%25% 18%

29%

47%59%

29%28% 32%

March April May

Anticipate RIFs at this point


11%

5%

21% 21%

11%

32%

18%17%

18% 19%

12%

16%

24%

14%

24%

19%

5%

14%

Quota BearingSellers

Sales Specialists Sales Operations Sales Enablement/Training

SDR/BDR Other

Anticipated RIF Actions by RoleMarch

April

May (through 18 May)

Sales expense outlooks have marginally improved, and nearly 60%

of sales organizations now report they do not anticipate RIFs. Of

those planning or taking personnel actions, an increasing trend

among quota-bearers is anticipated.

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=29, April n=100, May

MTD n=22. Note: Percentages may not add up to 100% because of rounding.

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=29, April n=100, May

MTD n=22. Note: Percentages may not add up to 100% because of rounding.

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=19, April n=77, May MTD n=21.



Thoughtful sales expense management will allow a more rapid rebound

Source; 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; n = 125 companies.


CSOs continue a variety of cost

management actions that

prioritize agility

and rebound readiness.

CSOs continue to protect digital

marketing and technology

spend. With customers now

highly available in digital

channels, and many CSOs

reporting significant increases in

digitally placed orders, engaging

customers in a multichannel

fashion is critical.

27% 19%

6%

16% 18% 20%16%

20%

36%

23%

85%

41%

31%35%

28%

55%

37%

59%

10%

42%

51%45%

56%

25%

Prevalence of Expense Actions(as of Apr – 18 May)

Expect to Reduce in Next Three Months Have Reduced No Response


Customer

Engagement


Customers are seeking certainty, but settling for hypotheses and collaboration

CSOs agreed on several actions:

• Assess impact on customer businesses and potential areas to offer

support.

• Create near-term commercial messages that help customers more

effectively manage their business through the pandemic and

aftermath.

• In lieu of data-backed perspective, engage customers with a

hypothesis-led approach. CSOs report very favorable, partnership-

oriented discussions with customers using such a framework.

• Position and arm sellers as “Sense Makers,” helping customers

understand rapidly shifting dynamics.

Uncertainty caused by COVID-19 has caused customer speculation

to run rampant. Most sales organizations have strategic reach

across a broad swath of customers, industry verticals, and

geographies and therefore have unique, evidence-based

perspectives. There is a clear opportunity for suppliers to make

sense of rapidly shifting conditions and bring clarity to their

customers.


Hypothesis-led engagement plan

5 Steps Example

1 Re-visit the long-term plan or strategy “How is your long-term strategy changing or evolving given current

conditions?

2Engage customers with a hypothesis on coming changes

to customer or market behavior

“Here’s what we’re seeing and what we think it means. What do you

think? Would you agree?”

3Explore likely impact to business processes (e.g.

workflow, supply chain, revenue recognition)

“Which processes will likely change as a result of COVID-19, and

which won’t? Here’s what we’re seeing.”

4 Address previously agreed-upon strategic initiatives “Which strategic initiatives will you likely have to revisit or re-prioritize

as a result of these changes?”

5Help customers develop and prioritize actions for a range

of upcoming scenarios

“Let’s lay out the range of actions you might take for each step of the

following three phases, depending on how conditions develop: near-

term protection, mid-term recovery, long-term new normal”


Customer relationship-building efforts

44% 53%82%

33% 21%5%

23% 26% 14%

March April May (though 18 May)

Have issued clear guidance to our sales teams on how to handle cancelled customer

orders


26% 36%

55%50%

19% 14%


We have conducted “buyer experience” exercises to assess shortcomings in digital

buying experiences


Given the speed of changing market conditions,

CSOs must continue to prioritize relevant

messaging and positioning of their value

proposition with current dynamics. Gartner

experts are able to support your team in rapid

messaging efforts. Analyst Inquiry is available by

subscription only.

Leading CSOs will accept the near-term, and

likely sustained trend, of virtual selling and adapt

data-rich presentations, interactive discovery

sessions, and other traditional face-to-face sales

calls for this virtual environment. Conducting

buyer experience exercises will be critical to

assess issues and opportunities.


n=100, May MTD n=22. Note: Percentages may not add up to 100% because of rounding.


n=73, May MTD n=22. Note: Percentages may not add up to 100% because of rounding.

https://www.gartner.com/analyst/inquiry


Create near-term commercial messages

that help customers respond smarterCSOs should generate informed (if uncertain) points of view based on their

company’s perspective in markets served and relay this to customers.

• Leading CSOs are assessing patterns in how customers are inadvertently mismanaging their responses to the crisis. Commercial opportunities will exist where assumptions and rapid decision making are driving customers’ business responses.

• As recommendations emerge, CSOs should drive consistent messaging in these critical windows. Omnichannel messaging must reflect a singular and devoted narrative that helps customers manage through the implications of the pandemic.

• CSOs are encouraging their organization to respond as a relevant thought leader with a sharpened focus linking the supplier’s value proposition with the most critical and timely concerns of their customers.


Prepare for more strategic and empathetic sales

conversation

Inspire Customers on a New

Way Forward

Ease the Customer

Decision-Making Process

Empathetically Build

Customer Confidence

Arm sales teams and marketing

channels with compelling

insights that help customers

manage risks, expenses, or

opportunities in a new and

better way, that ultimately leads

customers to appreciate your

unique strengths as a supplier.

Customers skepticism and risk-

aversion will require empathetic

guidance through buying

decisions. Sales teams will

need to help customers parse

through conflicting and

overwhelming information.

Customer decision confidence

will singularly determine whether

new, healthy deals get made.

The sheer inertia required to

make purchases during a period

or economic uncertainty and

recovery must be minimized.

Customers must be provided

with decision tools, impact

assessments, purchase

guidance and other buying

support tools that ease their

decision-making process.

CSOs anticipate that – similar to past economic downturns – customers will need to have a more strategic

conversation to overcome heightened risk aversion and consensus requirements.


Companies are generally readying for a return to live customer visits

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; April n=27, May MTD

n=22. Note: Percentages may not add up to 100% because of rounding.

61%

31%

8%

Developed a playbook/protocols for our field sales teams and specialists to safely visit

customer sites

Agree Disagree Unsure

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; April and May MTD n =

49. Note: Percentages may not add up to 100% because of rounding.

59% 50%

11%

9%

30% 41%

March April May (though 18 May)

Anticipate customers will engage in live (face to face) meetings prior to Coronavirus vaccine

availability



Summary of CSO Discussion from 8 May: Returning to Live Customer Visits

Decisions on returning to face-to-face customer meetings is shifting from tactical to strategic. What started a simply “when do you think?”

question has now evolved into a potential competitive advantage, assuming that customers are remiss or slow to re-engage in live sales calls. One

clear reaction from this week’s calls: winners won’t wait for face-to-face activity to resume. CSOs planning to wait on the sidelines to meaningfully

engage customers in traditional face-to-face ways run the risk of being passed by competition, which is developing a strategy for virtual customer

engagement.

The virtual sales strategy must address shifting customer decision dynamics, which naturally become more conservative. To be clear, this is

perhaps less a product of the economic circumstance, and more a product of time-pressed, quick meetings where broader organizational

considerations are difficult to assess and address. In other words, a longer-term virtual sales strategy solves for helping customers make complex

decisions virtually, and not the near-term economic situation.

Industries where customers demand live presence need to have clear expectations and protocols. One CSO cited that using CDC, or other public

health requirements, as impartial, third-party standards helps in setting appropriate customer expectations. Instead of having to default to

company policies, or VP+ level exceptions, which can easily cause friction with customers, citing public health standards provides a clear rationale

and expectation. Other guidance shared was based on a multi-step protocol to ensure both customer and sales professional safety which included:

1) all work that can be completed virtually must be, 2) the customer must request the seller conduct a live visit, 3) seller must be healthy, and not

high-risk, 4) seller must undergo a third-party health screen and present this screen to the customer, and 5) the customer must ensure a set of

health protocols are in place to protect the sales professional. Many CSOs have, or are currently, sending PPE kits to sales professionals, as well.


Summary of CSO Discussion from 8 May: Returning to Live Customer Visits (Cont.)

Openly discuss customer expectations on live face-to-face visits. Many CSOs reported that their recent “top-to-top” sales calls have focused on mutual

benchmarking and sharing of plans to open worksites, protocols under which worksites will open, etc. Larger customers are simply interested in

benchmarking timing and approach, smaller customers often have yet to develop a plan and find the input helpful. Start to amass a firmer baseline on

customer expectations, but know this baseline is fluid.

CSOs uniformly agree: if sellers are not comfortable visiting customers, you must support that decision. Even in essential industries, CSOs are providing

vocal, clear organizational support that associates will not be put into any compromising or concerning situations. Many CSOs are finding that corporate

policies are not addressing specific Sales, Sales Support, and other field-based role circumstances, and now working with legal and HR to revise these

policies to make field-based employee protections abundantly clear and simple.

Customer voice and perspective now carry a premium (and will likely continue to). As sales calls have shifted to virtual, the rich, lengthy exchanges that

many sellers, sales specialists, sales leaders and others are used to having – as well as relaying “market perspective” to other customers – is dwindling. This

will put added stress on marketing and sales enablement teams to ensure powerful insights, captured market voice, and keeping sales teams armed with

fresh, relevant perspectives.

Timing expectations when offices open side with nearer term, but mixed expectations on when customers take live visits. June is the consensus timing

for when most CSOs expect offices to open. Over 60% of senior sales leaders also anticipate that customers will take live sales calls before a COVID-19

vaccine is available. But several sales leaders report they are operating under the assumption of largely-virtual sales calls for at least the next year to 18

months.


Seller

Engagement


Most sales organizations anticipate reopening work sites in June/July timeframe

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; n = 38.

0%

10%

20%

30%

40%

50%

60%

May Jun Jul Aug Sep Oct Nov Dec Not applicable

Anticipated Timing of Work Sites Reopening(1 May – 18 May)

APAC Offices EMEA Offices NA Offices LATAM Offices


Few have adjusted quota; roughly 1 in 5 have developed a contingency plan to easily do so

10%21% 32%

59%55%

59%

31% 24%9%


Have a plan in place (both triggers and responses) for quota relief for

quota-bearing associates


8%11% 18%

65% 70%82%

27% 19%


Have adjusted quota for quota-bearing associates


Few organizations have

adjusted quotas, but as many

close in on anticipated

June/July adjustments, a

greater number report having

a cross-functionally approved

plan in place to do so.






Commonly considered comp actions are centered on short-term or activity-based plans

Relatively few sales leaders

have adjusted compensation

plans at this point, with the most

common actions centered on

near-term SPIFs to spark sales

activities. We expect this to

continue as sales targets

generally go unaffected.

Gartner experts are able to

support your team on

compensation questions.

Analyst Inquiry is available by

subscription only.

18%9%

27%

5%5%

5%14%

14%

14%5%

59%41%

23%

36%

82%

18%36% 36%

45%

9%

Make changes to quarterlyor monthly payouts

approach (e.g., pay allsellers at target or create

a recoverable or non-recoverable draw)

Make changes to payoutcurves or other pay rate

mechanisms (e.g.,eliminate thresholds orreduce payout slopes)

Launch contests or spiffsfocused on short-term

outcomes under currentconditions

Launch new plans basedon MBOs or seller

activities

Reducing base salaries ofsellers

Compensation Plan Actions(as of 1 May– 18 May)

Have taken Will take in next 3 mos Will not take Unsure

Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; n = 45 companies.


https://www.gartner.com/analyst/inquiry


Shifting views on sales as a field-based role

Nearly 20% of sales leaders are

actively considering shifting field

to virtual sales on a permanent

basis, with another third unsure

of how they’ll proceed.

Nearly half of sales leaders

report increased activity levels

(not necessarily sales

productivity, given few deal

closures), which highlights an

emergent tension in where

sellers conduct business.

Many CSOs do cite a high

likelihood of shifting sales

specialists roles to virtual,

offering more scalable access to

these resources.

10% 19% 18%

62% 51% 45%

28% 30% 36%


We are now considering shifting traditional outside/field sales to virtual sales positions on a

permanent basis


49% 50%

32% 32%

19% 18%


Seller activity levels (e.g. sales calls/day) have increased during this work-from-home period




Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=0

(question not yet asked), April n=73, May MTD n=22. Note data may not add to 100% due

to rounding.


CFOs are uncertain on how to re-introduce employees to worksites

Few CFOs foresee either of two

extremes happening with “return

to work” scenarios: all

employees having to return, or

no employees returning to work.

A general sense of uncertainty

and voluntary return to worksites

are most commonly cited.


CFOs largely following local gov’t guidance; few cite C-19 testing to return to worksites

RESTRICTED DISTRIBUTION


Contact us:

Phone: 1 855 649 4966 U.S.

+44 (0) 3331 309 998 U.K.

Web: gartner.com/go/sales

Email: [email protected]

View additional Gartner resources

to prepare for the business impact

of coronavirus:

gartner.com/en/insights/coronavirus

https://www.gartner.com/en/sales

mailto:[email protected]

http://gartner.com/en/insights/coronavirus

Documents

CSO Actions in Response to COVID-19 · Source: 2020 Gartner COVID-19 CSO and Sales Leader Pulse Survey; March n=29, April n=100, May MTD n=22. Note: Percentages may not add up to