‘In these uncertain times’: the state of the information sectorMatt D'Cruz
In what has been, to put it mildly, an extremely challenging year for businesses right across the media, one part of the industry has continued to perform strongly – the subscriptions-based information sector. Our conversations from across the market have revealed CEOs and other business leaders reporting better than expected results for the period of lockdown, but also taking nothing for granted about the future.
In many ways, this is unsurprising: subscription revenues are solid and predictable and most are tied up in annual contracts at the very least. But many still sell on a per-seat basis, and if clients are making widespread redundancies, they may also be looking to downscale their commitment.
So far, though, this appears not to be the case. The CEO of one data provider, which sells information on an industry that has taken a hammering during the pandemic, told me: “even though there’s a lot of volatility out there, you still need to know what’s going on”. As we found out during the financial crisis, periods of uncertainty create information needs, and with them, opportunities for growth.
Across the market, retention rates appear to be holding up, only dropping a couple of percentage points, if at all. The more reliant on your data your customers are, and the more integrated it is into their systems and workflow, the more likely they are to renew.
While they’ve been spared the worst, commercially, over the past few months, we’re still detecting a dose of healthy caution within the sector. One reason is the challenge of initiating new sales conversations in a socially distanced business world. Another C-level figure, who leads a prominent financial information business, told me “right now our pipeline looks great, I just don’t trust it”. A third CEO went further, saying “we have some salespeople who are very relationship-driven, and others who are very hungry, and right now the latter are doing better.”
It’s clear from across the market that demands of selling on Teams and Zoom require a different type of sales person – and perhaps a more consultative, solutions-focused and values-based sales process. And getting in front of them may be harder – the days of being able to approach potential clients at networking events, or take them out for lunches, are behind us for a while.
Several business leaders have also reported that they are pressing ahead with investment in new technology. “The more disruption there is the market, the more customers need to make decisions quickly”, one individual tells me. “So we need to double down on service quality”. In terms of recruitment, this is throwing up even greater demand for disciplines in which there has been, historically, a supply and demand problem – senior engineers, data scientists and analytics professionals, and customer-focused product managers.
The sector is robust, but the businesses that will come through strongest will be those who are using this strange period to innovate rather than consolidate.
Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work across the media, information, technology, communications and entertainment sectors, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.