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Whether you're in B2B or B2C, seasonality is practically universal. So what can you do?
In this episode, Raul and Toni share how to recognize and manage seasonal cycles in sales.
From understanding fiscal year ends, budget cycles, and the psychology behind customer and sales rep behaviors to practical tips on managing pipelines and leveraging seasonal trends, this episode equips you with the tools to stay ahead.
In this episode, Raul and Toni share how to recognize and manage seasonal cycles in sales.
From understanding fiscal year ends, budget cycles, and the psychology behind customer and sales rep behaviors to practical tips on managing pipelines and leveraging seasonal trends, this episode equips you with the tools to stay ahead.
Creators & Guests
What is Revenue Brothers?
What happens when a VC and a CEO come together?
– They nerd out about all things revenue. And they don’t always agree.
Raul Porojan of Project A Ventures and Toni Hohlbein of Growblocks are the Super Revenue Brothers. In every episode they dissect and debate current issues in B2B SaaS, and offer solutions on how to solve them
No matter if you’re an early-stage startup or a scaling unicorn – you’ll always learn something new.
Introduction
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[00:00:00]
Raul: I think there is no such thing that has no seasonality in your business and whether that be B2C or B2B.
Raul: Every single business I've ever seen has had some sort of cycle that has even after a certain number of years, Kind of created a pattern that they actually had to deal with.
Raul: And the reasons for that are a million.
Toni: So Raul, I heard you're not in Thailand right now. I heard you're not in Germany right now. where are you now, Raul?
Raul: So this interests you a lot, right? I hope it doesn't interest anybody else to merit that question so often. I'm in Romania right now, which is where my family's at, just, in on vacation. And indeed, yes, it seems to be an interesting question because actually, a lot of people, when they write me on WhatsApp.
Raul: It's like the trending introductory question. It's not even how are you anymore? It's like, where are you? So, apparently I'm traveling a lot this year. It does feel like that to me, but, I probably things will settle down a bit more in the future.
Toni: But I mean, one of the reasons why you're kind of all over the place, quite literally, is, you [00:01:00] left the Project A gig, and then did a couple of other things. But is there any move, are you like, what's going to be next for you, Raul? I think all of the folks listening are like, Hey, what's going to happen?
Raul: So I'm, I've been on this weight loss journey lately that has been going okay. I think it should be going much better because I won't have money for food anymore. because like I'm sort of running out of runway. obviously after like eight months of living up to life and actually I remember, in probably like November or October, I was talking to a guy on my team and, he was asking me about my future plans and everything.
Raul: And, I had a couple of job offers I thought that I was going to take one of them and that didn't work out from the company side. I basically told him, like, look, I have a little bit of money saved up and my plan is to burn it all down to the last cent and then start working again, because otherwise, what's the point of all this, right?
Raul: And so I'm kind of fulfilling that right now, except that the runway has been much longer and I haven't been, like, Like completely parting out and everything. But I actually like this. Like my, my intention, like should [00:02:00] I have kids? Maybe there's a little bit of a different, merit to that, but like my intention is also to die with zero euros or pennies in my pocket.
Raul: Like basically burn like every, every dollar you have. That doesn't mean I don't save by the way, but like. If I'm gonna burn it, like burn every dollar I have, because I can always earn more money. Otherwise, what's the point of all that, right? And otherwise, like, why would I die with a million euros or 10 million if I can die with zero?
Raul: It means I had more fun, did more good or helped more people with that money,
Toni: I guess the problem is that what if you wake up the next day after you hit zero and like, you're still awake, what you got to do then?
Raul: Yeah, that's a consideration, right? We obviously cannot know when that's gonna be the case. So, I think that's kind of my philosophy and that's where I've been going the last eight, nine months doing actually a lot more work than I thought, but like really being like, who cares?
Raul: Like that, this little bit of money is not going to make a big difference right now. I'd rather have also the mindset and the freedom and the time right now, which is a luxury actually after 10 years whatever, I'll always make more anyways. And the next thing I'm going to do is going to make more anyways.
Raul: Like, I feel [00:03:00] like I'm just getting started anyways.
Toni: so before we jump into our topic that also has a little bit to do with, I guess time of the year, what are you spending your time on now that you're kind of on vacation for eight months? Sure you have some, conversations and you do some work, I get it, but did you pick up reading books or, working out or just watching Netflix all day?
Toni: what are you spending your time on?
Raul: I actually, surprisingly, even though I'm unemployed, I have about 20 calls a week, which is crazy. And then also podcasts and stuff like this, cause like stuff is always there and people are always there to talk to. But, I think the one thing that I do a lot more of like is everything people are related.
Raul: Right. So. relationships, old relationships, dating, like, mother, family, taking care of them, talking to people, like, all that kind of stuff, right? Especially in Romania, where there's a lot of family, but also, like, meeting new people. a lot more of that, which is something I've actually done a lot in the past, but, like, it's difficult to maintain while you're working.
Raul: And then also taking care of myself a lot more, I think, like, body wise, like, mentally, can mean different things, but I think [00:04:00] one of the main things, obviously, is working out. I do do a lot of gaming. currently, I'm on my first playthrough of Cyberpunk 2077, which is quite good.
Raul: I think I'm like 30 40 hours in. but I've, I think I've played more games right now than in the last two or three years combined, for sure.
Toni: Well, that's good for you. Raul, what is it we actually wanted to talk about today? I almost forgot.
Seasonality in Sales
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Raul: So, yeah, that may be the reason why it's not good for you right now. and I think this is really fitting with the topic of today is seasonality. And what is that? Why should you actually care in sales? How do you maybe deal with it? And, I think this is a very valid topic for today because like, we're probably in one of the more difficult seasons.
Raul: Maybe we'll talk about why that is. and also a lot of people I talk to, you hear this within the last couple of weeks, actually, those talks were, yeah, you know, it's like, it's summer and then they say it as if like, okay, now this is the argument for whatever is going to follow after. Let's actually dig deeper into that.
Raul: Like, what does it mean when people say, you know, it's summer, like, you know, right, what that means?
Toni: So I had a call with, you know, my US employee [00:05:00] yesterday. And he needed, I don't know, some infosecurity documentation or some, he had some, some specific question. And then I was like, well, that person is right now on holidays and the other person is also on holidays.
Toni: And I just looked at him and he has been working with, you know, European companies before, and I just looked at him and was like, Sorry, that's, that's just Europe right now. And I think this is, you know, this is part of the seasonality stuff that we're talking about, but let's kind of peel the onion here a little bit from our perspective here, Growblocks, kind of how we're kind of seeing seasonality in the data actually play out, right?
Understanding Seasonality: Input and Throughput
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Toni: And this is a good hint for what's the actual cost kind of data is really just the surface here, but we're seeing basically two different types of data. of seasonality, right? so think about You're an e commerce, company, you're probably going to make more money in December than you're making in January.
Toni: So why is that? Well, people buy gifts, and there's lots more e commerce stuff happening, you know, before Christmas, basically, than it is [00:06:00] afterwards, right? and, you have the same with, SaaS, where you maybe have lots of people now on vacation, they're not looking around, they're not Clicking this demo button, they're not seeing the ads or whatever it might be, right?
Toni: You're just not top of mind. So this is an input, um, seasonality where you basically kind of see that people are more active in some parts of the year than in others to maybe start a process, right? this is seasonality number one. Seasonality number two is what we're kind of seeing as throughput seasonality, right?
Toni: And it's like slightly similar reasons. For example, right now, no decisions are being made. You might be in a process with someone, you know, maybe you have a four month sales cycle. Maybe you started that process in May probably right now in this sales process, nothing is happening because, Joe is on vacation.
Toni: Jessica just came back and blocked the deal before and like things are just not progressing. basically when you look at, when you look at your, your funnel, you will, or when you look at your quarter, [00:07:00] many of us will see, you know, is stronger end month of the quarter than this beginning month of the quarter, right? and there's no really good reason for this. You know, it's not like you have better opportunities in January than you have in March.
Toni: it doesn't actually work like this. But the reason is that when you kind of slice it all out, Your January cohort, in terms of conversion, will spike by the end of that quarter, and it will spike again in the end of June. but there's less in that cohort left basically, right?
Toni: But then you look at your February cohort of opportunities, or deals, or leads, or pipeline, and that, depending on your sales cycles, might still have a chance to spike a little bit in March, and then it will spike a lot in June. And then your March cohort will basically not do anything in March because it will just be too short term and it will fully spike then in June again.
Toni: Right. And this is, it's a sales cycle seasonality, if you will. And then it's driven by sales incentives. There's no rhyme or reason otherwise [00:08:00] for it. It's basically, people trying to get the deal done at the end of the quarter, at the end of the year. So you have, again, input seasonality, activity of folks, either coming inbound or being open to be kind of outbounded to, and then you have the throughput, or the sales cycle or sales process seasonality that is heavily impacted by,
Toni: availability of decision makers, but also the, incentive structure that you have with your sales folks.
Raul: Can you give an example of that? Maybe, maybe even both in the play at the same time, just to make it more graspable at which company have you seen this or how has it manifested?
Toni: So the input season is pretty darn clear. I think everyone kind of gets that, right? I think the throughput seasonality is a bit more difficult to fully grasp because it's, if you are a B2B company in SaaS.
Toni: and you're running on quarters and you have your sales reps run against quarterly targets, you will see that, at the end of the quarter, there's usually a bigger push for closing more deals. And that's a very human thing. [00:09:00] It's like they have this target they need to hit at the beginning of the quarter.
Toni: It's like, Hey, you know, excuse our exhausts my pipeline from last quarter. I need to kind of build this up again. But basically what you usually see is, a fairly soft first month. a little bit better second month and then 50 percent of the quarter or more sometimes being closed in the last month, right?
Toni: And that is kind of seasonality that you see basically within the quarter, that is kind of evolving there, right? and that seasonality kind of then sometimes looks a little bit different in Q3, for example, and so forth. But those are the seasonality. So the impacts that we're seeing across our customers, you know, in the B2B sector, I think it's different for B2C, for example, where the conversion basically happens immediately, but in B2B, that's what we see.
Raul: You know, interestingly, this, this leads to kind of my perspective on overall seasonality. Like the more I have progressed in my maturity, hopefully I have, there's a linear correlation with career and that, at least knowledge wise, the more I have actually seen this as a [00:10:00] relevant factor.
Raul: Key things already. I think that there is a sizable number of people who might not even listen to this episode at all and not hear them, or might think that this is not such an important topic for them. I actually think that, and even think that maybe, Oh, we have no seasonality in our business. I think there is no such thing that has no seasonality in your business and whether that be B2C or B2B.
Raul: And I don't know about that a hundred percent, but what I know is that I, by now have seen about 150 companies from the inside. And not one single one of them had sort of a yearly revenue curve that went flat, basically bringing in the same revenue every single month, the same opportunities every single month, the same deals every single month.
Raul: I have never seen that. And that is not 100 percent translatable to every business has seasonality, but like, it's pretty darn close to that, if you know what I mean, right? So basically, every single business I've ever seen has had some sort of cycle that has even after a certain number of years, Kind of created a pattern that they actually had to deal [00:11:00] with.
Raul: And the reasons for that are a million. Like, there's a million different reasons, and you've named kind of a textology of two of them, but I think the important takeaway here is, Seasonality does affect you, even if you think it doesn't, because you're all, I don't know, we're B2B, this and that, whatever.
Raul: people go on vacation and then people buy less. Bam, you have seasonality, right? People on your team go on vacation. They always do it at the same time, just as you talked about, and that's just like base level.
Stop blaming bad results on seasonality
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Toni: I think that, I think many people are aware of seasonality. But I actually, I see the flip side most often is overly using seasonality to blame. you know, mediocre results or something like that. It's like, ah, you know, Q3 didn't work out. Well, seasonality. and I think you need to be careful on either side of that.
Toni: and I think the next thing we actually also going to be talking about is like, okay, let's just recognize this thing that's called seasonality. And let's just recognize, honestly, that it has an impact. It has an impact on you as a business. but also number two, it's not a fucking surprise.
Toni: Q3 is [00:12:00] going to be soft, you know that. And the reason why it's soft, like, yes, there's some decision makers that are not around, but number two, you probably also went extremely weak in building pipeline, leading up to the summer, right? For whatever reason, once you understand that those are the levers that you can, need to be aware of and can, maneuver and pull, that actually needs to put you in a position where you start to proactively manage You take down the targets, well, not for the representative, but for the organization, the expectation for the organization, and then, you know, need to find this somewhere else.
Toni: But the other thing is, what can you do managerially? what can you do in the execution? What can you do on the ground to actually impact that stuff and try and soften the blow off of seasonality a little bit?
Raul: And I think obviously, so the companies that are better at this are the ones where, and now I'll go into kind of my view on like the taxonomy of seasonality. the easiest one to understand and easiest one to grasp and the companies that are doing it best typically at dealing with it are the ones where seasonality is [00:13:00] interwoven into the topic they're dealing with.
Raul: So, one of the companies I work with right now is an advisor, consultant, they are working with, let's say they're working with something that has to do with nature.
Raul: And obviously, nature goes through cycles, and so does what they do. Right. And this is like something that they knew right from the start. So it's quite a young company, but they understand quite a couple of things already and are already quite mature at dealing with it. So that's when you have it easier dealing with that, right?
Raul: Let's call it typical, topical, seasonality, or another company I work with recently had something to do with fashion, which also has a lot of seasonality, right? So, there's that, right? Then there's also, which, and I think this is to me just another way of thinking about the, input and throughput that you were talking about.
Raul: I think actually seasonality has to do a lot with psychology of people because at the end of the day, corporations and companies are made of people and those people are the actors of things and people are just wired differently and focused on different things throughout the year, depending on where you're working.
Raul: Obviously that has a lot to do with like vacation and all that stuff, but also like the [00:14:00] motivations of people. Like I, Know from myself, if you were to try to sell me a program to master my time better, it would land completely different on January 1st than it would land on like June 31st, two weeks before my summer vacation.
Raul: Like, when I care about what kind of things, just psychologically, as a motivation, right, to, to, to move myself to do things.
Toni: tremendous factor.
Raul: has a tremendous factor. And that also goes into the motivation of salespeople to when are they going harder, obviously at the end of the year and all these things, right?
Raul: Like understanding this and both from the customer side, but also from the input, as you were talking about, it's like, it's quite
Toni: this, and it's both from the customer side, but also the user side. And maybe kind of at some point the taxonomy breaks here as we, keep exploring this, right.
Toni: But they are simple, accelerators on the customer side that might help you actually close this deal faster. Or help to close it at that exact time. And [00:15:00] those are budget cycles. Like, Hey, you know, I've talked to so many organizations that have a use it or lose it kind of policy.
Toni: and suddenly they call you up two weeks before the year end. It's like, Hey, you know, I need an order from right now because, I have 20, 000 and I don't want to lose that in the next year. And then you guys are the ones. but the same thing for opening up the budget cycle again, right? Hey, my budget is spent this year, but I can put you into next year.
Toni: And then, basically kind of in January, we have that conversation. the interesting thing to also know is that some industries, have inherently different off year budget cycles. So for example, in the U. S., universities have like a June or July, I think, budget cycle, fiscal year end, basically.
Toni: You have some, governmental, institutions in the U. S. where a lot of those decisions I believe are being made in September or something like that. if someone knows, they can probably call me out, but they are different cycles to it.
Toni: And there are also some companies that for, accounting reasons choose to have the [00:16:00] fiscal end in June versus in July, those are actually good things to know, when you start having those conversations with the organization, when is your budget cycle actually ending and that sure can drive.
Toni: urgency and so forth, but it's also a reason for someone to make a decision, which then will kind of come up and look like seasonality or kind of express itself as seasonality. Suddenly your conversion rates are through the roof in that month. Suddenly you're kind of, your inbounds are through the roof in this month, right?
Toni: as I mentioned before, I think on the data side, You see it, as, throughput seasonality, so really it's sales cycles, quarterly sales cycles and input, but the real reason, the real root cause is like a mixture of, sales incentives prospects incentives their timelines and their needs and when something is top of mind and not.
Toni: and kind of all of that stuff mixed together and then expresses itself in the data as input and throughput seasonality from, from, from my perspective, I would say.
Best practices: conquering seasonality
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Toni: But instead of going deeper into, you know, the theory of this, what are your best practices in actually managing [00:17:00] this and getting, getting ahead of the, the wave here in order to make sure that it doesn't hit you in a negative way?
Toni: Basically, it changed into, once I saw it, the
Raul: So I think
Raul: number one, by far, however you want to call it, I would call it something like education or reconnaissance or intelligence, right? Which basically pays into primarily what you just talked about, understand your industry and how they're thinking.
Raul: Maybe the first half of my entire career still has a long way to go, hopefully, but, like, I never thought about this. And then, once I saw it, the more I kept seeing it, and the more, the higher relevance I gave to it. So, understanding when the fiscal year ends, and that the people, and I don't know if everyone knows that concept, but, that there's this thing called, like, use it or lose it, budget.
Raul: whatever options behind it is huge. Like there's entire companies being built on the fact that Daimler and Audi are shelling out all their budgets in October and November and December, cause they don't know what else to do with it. And they don't [00:18:00] want to lose it. And if you know that. and you're kind of a young startup and you talk to the right person at the right time, you don't even have to be great.
Raul: You don't even have to go through the whole process and six months of diligence and all that spiel, right? So just like that reconnaissance about your industry, I think it's the basis. And I think this is where most people are like, yep, understood. I need to understand my industry.
Raul: Okay, cool.
Toni: I think they
Raul: I do think, however, as easy as we're making it, most companies do not focus enough on budgets within, their customers and specifically not just one budget, but more, right? Because the money to pay whatever your thing is, especially at enterprises could come from any different parts.
Raul: It could come from a digitization pot or an innovation pot or I don't know, HR tech pot or like a special project pot or from the department pot. Like there's maybe different budgets that have different kinds of rules and going into that is one of the essences of enterprise sales in my opinion, right?
Raul: Going away from budgets though, right? Do you have anything else to add to that? Like just as a basis for reconnaissance?
Toni: I think that's it. I think the basically understanding when those cycles end and when those budget [00:19:00] conversations are being had.
Toni: I think that's extremely important and helpful in, helping your sales rep drive the conversation in the right way. Like, Hey, listen, Bob, you know, for this to be relevant for 25, you really need to make the decision in October because otherwise you won't get it into your budget.
Toni: So working back from that, you know, what do we need to achieve for you to be in the position to put it in the budget in October, right? And then suddenly, boom, you have a timeline, you have urgency of like, Oh fuck, we're actually behind, August is almost late, et cetera. So I think those are, those are good ways to do it.
Raul: And if you understand those things, One of the things I've seen work really well, and now you would think that this only works if you're very seasonal driven by your topic or whatever. I think this works in a lot of different companies, is using that seasonality to your advantage and embedding it into the spirit of the company.
Raul: And in sales, this is quite obvious, right? But like, into the whole company. What do I mean by that is, see seasonality as a
Raul: it's a yearly cycle, almost always, right? Because like, that's how the industry operates. I think that the fact that we think in yearly planning and all that is quite arbitrary, but for this, it makes sense to think in years, because like the seasons [00:20:00] are there and they return on vacations and all that stuff.
Raul: Okay, cool. So I think what can work really well is using this year and the seasonality of your business and of your industry as, as a. So kind of a life cycle of the year and, and to give people something and within your organization to know, even from the product person to the tech person, to the salesperson, this is when we need to be on point, right?
Raul: This is when we need to have the product ready for marketing, to pick it up and place it in the ads, right? For sales to receive the leads to invite the people to the event that happens on March 15, right? And this kind of cycle, harmonizing the people within your company is incredibly powerful. And I think there's a couple of reasons for that.
Raul: Number one is, it gives them deadlines. And it gives them like something to work towards. That is a natural deadline. And this is really strong with a lot of people. Like, I'm one of the examples of people that I hate artificial deadlines when there is no point to them. Like, they dis motivate me rather than motivate me, which a lot of people don't like.
Raul: But like, if you tell me this needs to be done by Thursday and there's no reason why it needs to be done by Thursday, you're probably gonna get it next [00:21:00] week Thursday just because fuck you, right? Natural deadlines, which is, hey, man, this is when the event happens, right? This is the biggest event of the year.
Raul: There's four of them a year. Next one is on March 15. And that's why you, Mr. Tech person, cause there's 20 people are relying on you need to do it by January. That's quite strong and people don't want to let other people down typically. So having this built into the company, I find incredibly healthy to, to have for the different departments and for the company as a whole, right?
Raul: Knowing that also, and then you can also place vacations in there and be like, Hey, we need to get this done by April, even though the event is in October. Cause we know we're not going to get anything done in June and July. And people understand that. I think it's quite easy to get working with people like that.
Toni: So, exactly. And I think this speaks a little bit into the, let's be organized point here. Right. I think one practical thing that we have done is, so we knew at some point Q3 is going to be shipped. Like we, you know, it was always the case, always, especially Europe. I think what helped us to kind of, you know, make Q3 stronger was having an APAC and US [00:22:00] operation, so that helped with that.
Toni: but also kind of, in order to kind of buffer Europe a little bit, what we did is actually we started proactively. Even though we were on target with Opportunity and Pipeline Production, we got proactively in June, July and May sometimes, late May, to push a lot of SPIFs, into the SDR team, for example, into the sales team to basically, yes, you're on target, but here's another, bonus on top.
Toni: If you get to 105%, if you get to 110%, if you get 115%, why? Well, we need that pipeline because we know July and July, August, depending where you live in Europe, it's just going to be dead, right? So we need that pipeline to then actually help us. for the rest of Q3 to kind of come through here. And we basically tried to overheat on Q2, pipeline production in order to help us a little bit in Q3, basically, right?
Toni: And those are things to your point, if you have this calendar in mind, if you have this execution seasonality calendar in mind, I think then, making those calls [00:23:00] and being proactive about it becomes a lot easier, right? And instead of sitting on your laurels and like May, June, looking at a good pipeline gen, saying, Hey, we actually need to push a little bit more because otherwise we're going to be on the opposite end of the spectrum, in August, September, when we're suddenly going to miss the target by a lot.
Raul: And make sure that you communicate well as at least within the leadership. Because don't assume, this is one of the mistakes I've made. Don't assume that everyone understands seasonality within your company when they're from a different department. And this is where the interplay is really quite important.
Raul: One of the things where I made mistakes quite early on was, and one of the first people to, Showcase that to me was a person at Project A who actually told me about the seasonality of hiring, right? And so I didn't understand that I need to build a team and then there's a lot of seasonality in that and the fact that I need to adjust my strategy and my plan throughout the year according to when I will Get the number of people that I want and that there will be completely different in Let's say october than it will be in february That has made me quite a lot better
Raul: So understanding this and, and it was thankfully [00:24:00] to the person who was conscious enough to know that they had to communicate to me about that. But I've worked in seven, eight companies before where nobody ever told me that. Right? So I think really just making sure that not everyone knows all these things that you know about and how like your hiring cycles are end.
Toni: I have another one, another trick. It's, it's kind of in the seasonality topic. And it helped us a lot, but it's a trick. so here it comes. What we did is, we shifted our fiscal year by one month. So instead of ending the fiscal year in, you know, December 31, we ended the fiscal year, January 31, right?
Toni: So we kind of, we shifted it one month. So what did this give us? It gave us two, three things. Number one, Q3 in Europe wasn't as shit anymore, right? So instead of having it, July, August, which are completely dead, and then only September, now it was August, September, November, October, right? Kind of suddenly a [00:25:00] two month in, in Q3 that it could do something with, all the natural months.
Toni: So December, still stayed in Q4. June still stayed in Q2, right? Really, really important. so it's number two. Number three, it's a massive quality of life for the sales organization, the finance organization benefit. So why is that? Because suddenly you get your Christmas and New Year's back, right?
Toni: Suddenly your last day is not, you know, New Year's. Suddenly your last day is, well, you know, January 31. Who gives a crap, right? And, we didn't come up with this. it was actually Benioff and the whole Salesforce folks, they did this. I'm not sure if they were the first ones to do this. But they famously have done that.
Toni: And then a lot of other organizations, in their environment actually started to align to that. And everyone knows now, if you want to get a real great deal from Salesforce, try and close the deal on January [00:26:00] 30th. That's when you get a great deal from them. and the fiscal ends there, right?
Toni: and it's, it comes with a couple of confusing downsides. Probably your finance folks aren't going to like you. Recommend though. to shift not only the sales quarters, but really your fiscal, like, otherwise it's super weird. you will run into conversations where finance is throwing up their hands in the end.
Toni: It's like, well, we're not hitting anything here. And you just say, wait, you know, our quarter isn't done. We kind of still, you know, a month to go. What are you talking about? And that's not good. I think you should shift the whole company if you do it. but it comes with a bunch of benefits. is it going to make you close more money now?
Toni: but what it will do, it will have those seasonality effects be a little bit less visible. you won't be going up and down, in your quarters, which is for many organizations, for many investors looking at you, a really good sign. It's like, Oh, wow, these guys are consistent.
Toni: Well, why is that? they wouldn't understand that anyway, but that one shift, might actually give you that additional, [00:27:00] benefit there.
Raul: This is, At this point, as I told you, I'm a big fan of not arbitrarily being binded to the year. At this point, why not have the end of the fiscal year at the end of March? I don't even know if you can do that, but
Toni: End of January, end of January. Yeah, yeah, You can do that. It's absolutely no problem. you can do it in Germany. I mean, that's not the issue. You have some weird accounting stuff that needs to happen around it in order to make that move done.
Toni: but also there's a couple of other weird things, but you wouldn't be the first ones doing it. So this is not super exotic.
Raul: A soft one that I think has been, again, like a revelation to me over time and the effect of that really. We talked in one of our last podcasts about the compounding effect of improvements to our sales funnel, right? how. seven little improvements over 10 percent bring you like double the, the revenue.
Raul: I think one of the things that I've really learned is also the compounding effect of, I would call it like funnel orchestration or wherever you want to call it, which is really important when it comes to seasonality. And what I mean [00:28:00] by that is, Like it, obviously, let's say you're mature enough and sophisticated enough to think even about like a funnel in the right way and like, think about, Hey, this is how much we need to put in to get this one out at the same time.
Raul: Okay, that's great. But I think what's really important is like knowing that there needs to be continuity in processes and how that will affect or not affect how your pipeline.
Toni: aligned within the funnel.
Raul: The input and the throughput, as you said, needs to be aligned within the funnel. It typically isn't.
Raul: You have this problem, for example, a lot in organizations who have full cycle, account executives, right? Where they're doing one month, they're doing a cold calling. And then the next month they're closing those cold calls, which is super simplified way of saying it. And what happens is that they're always one month, like running super hot.
Raul: And then the next month, nothing happens for a month and they have no demos or whatever, right? On a grand scheme of things, it's the same as seasonality. It's the same as saying, Hey. We actually have a time when we get a lot of leads in, and then we have a time when we have a lot of, get a lot of leads out.
Raul: And what's the problem with that? If you have the same kind of [00:29:00] people, the same amount of people throughout the entire year doing the same thing, something doesn't add up. Because if you have, three times as many leads coming in in Q1 for whatever reason, You are not going to be able to put them through the funnel.
Raul: Then you're going to have a much longer waiting time for the customer, which again correlates with less of a conversion rate. That's not good for your business. So those peaks are bad for you. But then at the same time, you have times when people are sitting around twiddling their thumb because there are no leads coming in and the account executors are just busy closing the demos.
Raul: Super, super simplified way of saying it. But I think any kind of way that you can find to counteract that And I think the first one is really just educating people on that already, and the importance of keeping their funnel as stable as can be, given seasonality, because you cannot influence the seasonality at all, but what you can is your reaction to it,
Toni: It's unsexy, but it's
Raul: It's unsexy, but it is one of the few things I've seen that actually work.
Raul: Like making your team aware of the importance of bringing in steadiness throughout the year, talking to marketing about also maybe smoothing things out a little bit throughout the year, maybe actually putting less efforts or even [00:30:00] less hires in Q1, maybe working with some more flexible time modules, for example, But I think this is quite important.
Raul: And if you look at it, this is actually how your funnel looks. I can almost guarantee you, your funnel will look like this. You have a big amount of leads coming in, in Q1, in Q2, everyone's busy closing them, Q3, nothing happens or some variation of that, right? And if you think about the fact that all throughout the entire year, you have 10 AEs, somehow that doesn't add up, right?
Toni: I think we kind of have given quite a couple of good examples here.
Conclusion and Final Thoughts
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Toni: So number one, just kind of maybe to wrap this thing a little bit. Number one, what is seasonality really in the, on the data side, it comes through as input and throughput seasonality in reality. It's your reps motivations, it's your prospects motivation to close or to open sales cycles and so forth.
Toni: There's vacation, all kinds of reasons in there, right? Then we talked about, how to manage it. your first point was like, number one, be aware. be aware how that even looks like. Create almost like a calendar of what needs to happen, when, and when will you run into issue, right?
Toni: We talked [00:31:00] about, you understanding what does the budget cycle actually look like on the other side, that is an important input to, how that part of your seasonality might actually function, I talked about saying like, Hey, you know, because there might be a gap coming up.
Toni: And we're actually on track right now, but we know we won't be in three months from now. Let's try and overproduce right now and get a little bit more pipeline going in order to solve this problem coming down the line. and the last one then around really maybe you shift your cycle a little bit.
Toni: Maybe you can use this to flatten out some things.
Toni: So thank you so much everyone for listening. make sure to, hit like subscribe or what, whatever, whatever it is you're kind of using, we're using it and then see you next time. Bye bye.
Raul: Bye bye.