And so it’s a little bit of all of those factors impacting the top line with what I would consider “normal” operating expense growth baked into the 2024 guide.
Josh Chan: Perfect. Thanks for the color, Craig. And thanks both for your time.
Operator: Thank you. Our next question comes from the line of Surinder Thind with Jefferies LLC. Your line is now open.
Surinder Thind: Thank you. Just taking a step back, if we look at the big picture and what I would call the relative strength of the economy, why do you think the clients on the tech side aren’t spending more at this point? And I guess in your conversations, what would get them to commit? Like what are they looking for at this point?
Craig Safian: So Surinder, on the tech side, I think it’s really the realcali – so it’s a combination of the recalibration of that market. And also when I say recalibration down to the things Gene was talking about, where we actually have a really healthy business on the small end of tech, and there is funding flowing, but it’s not flowing to the same places that it may have been a year or 2 or 3 ago. And so we’re just dealing with that. And again, we’re going after the opportunities where the money is or we’re fishing where the fish are. But as you’ve seen, there are still large tech sector layoffs happening a year or almost even 15 months since they began and selling into that environment when they’re in the process of cutting tens of thousands of jobs is a little more challenging than it would be if they had completely recalibrated.
So I think we’re still in – we’re still driving huge value for the clients. They’re still very important clients for us. We’re going to be there to help them as they rebound and come through the recalibration. It’s just going to take a little bit of time, but we’re confident in the value we provide. We’re confident, as I mentioned earlier, in the long-term or medium-term growth prospects for this part of the business. But the fact is they are still significantly recalibrating and we are along for that ride, so to speak.
Gene Hall: And just to add a little bit..
Craig Safian: Please continue.
Gene Hall: When you’re selling into a company that is actively making layoffs, the attention of people’s focus on who they’re going to lay off or whether, in fact, they’re going to get laid off. And so it takes a little while – that’s a much tougher – that’s kind of the toughest selling environment. They’ll get through that, and it will return to normal. That’s the larger end. And then on the small end, Craig described very well.
Surinder Thind: Got it. And then I guess if we think about that or advance that line of thinking, so as you kind of more broadly think about the business and all of these clients that you serve, so is there arguably more, I guess, cyclicality or potential volatility today in your business than maybe in prior cycles, maybe the reason being that there’s more PE, VC-backed firms now that they’re just a larger part of the ecosystem. So they’re just more willing to make quicker strategic pivots or spending decision changes or other things. Is there something structural perhaps that we should be aware of, or at least we should be thinking about?
Gene Hall: So our perspective is there’s nothing structural about it. What happened was during the pandemic, there was a pull forward of tech spending. In fact, many of the tech companies, probably most of them assume that was going to last forever, turned out it was just a pull forward. Now they’re just adjusting to getting back to normal. And it’s as simple as that. So unless pandemics become cyclical, I think we’re in pretty good shape.
Craig Safian: Yes. I also think, Surinder, just to sort of underscore that point. When we talk about the overall business or market opportunity, I’ll focus on the market opportunity. So roughly $200 billion market opportunity. $190 billion of that is outside of the tech vendor opportunity. So we remain very focused on that big prize of $190-plus billion market opportunity serving enterprise function leaders across GTS and GBS. And again, we’re confident that the tech vendor market is a really strong market. But the reality is $190 million on that $200 billion market opportunity is the enterprise function leader opportunity.
Surinder Thind: Got it. Thank you.
Operator: Thank you. Our next question comes from the line of Jeff Silber with BMO Capital Markets. Your line is now open.
Jeff Silber: Thanks. I know it’s late. I’ll just ask one though, it’s multi part. Can we talk about the pricing environment? Can you just remind us what price increases you put in for this year? Are you getting any pushback? And others in the space have been providing some breaks for extending the length of the term? Is that something you’re doing as well? Thanks.
Gene Hall: Hey. Good morning, Jeff. Thanks for the quick question. On the pricing side, we’re a little over 4%. We did our price increase in November of this year, which is when we typically do it. A little bit lower than what we did in ’21 and ’22, largely because we’ve seen inflation come down a little bit, most importantly, wage inflation come down a little bit. And so we’re in that around 4%, a little bit more than 4%. I think clients, by and large, are not pushing back on it. Again, remember, the average spend per client is order of magnitude, $250,000. So the difference between a 3% or 4% increase is pretty de minimis. And again, and we’re very focused on making sure that our products and services have incremental value each and every year.
And we’re continuing to sell with our upfront invoicing and a real focus on that. We’re continuing to sell more and more multiyear contracts with our focus on that. And so I’d say, yes, the environment has been a little tougher, but we’ve been managing to stick to our guns on the things that we know drive huge economic value for the business, which is sticking to our pricing guns, not discounting, selling multiyear contracts and making sure we get the invoicing done upfront. And I think our teams have done a phenomenal job of sticking to our coordinating there.
