Latin America’s cybersecurity market is poised to grow from USD 8.92 billion in 2024 to USD 12.48 billion by 2029, according to Mordor Intelligence. Despite such a robust outlook, many organizations experience a recurring dilemma: deals that appear ready to close suddenly stall—leaving CROs and VPs scrambling for answers.. In this article, we’ll look at three common obstacles—currency volatility, withholding taxes, and over-reliance on relationship selling—and explore what sales teams need to avoid to unlock LATAM’s full potential.

1. Fluctuating Dollar Exchange Rates

One of the primary reasons deals stall in Latin America is currency volatility. When contracts are quoted in U.S. dollars, local purchasing managers may delay or deprioritize buying decisions based on projected exchange rate shifts. If the dollar surges unexpectedly, a buyer’s budget can shrink overnight, prompting them to pause purchases until currency rates stabilize. Fearing a ballooning budget, organizations may postpone the purchase entirely or look for cheaper alternatives to avoid cost overruns.

2. Withholding Taxes

Withholding taxes can add another layer of complexity. In several LATAM countries, these taxes can reach up to 80%, depending on the product category and specific local regulations.

When withholding taxes are overlooked during initial negotiations, customers often assume vendors will handle them. If that assumption is wrong, the final price could jump significantly, invalidating the buyer’s budget. A sudden 20–80% increase in cost triggers new internal approvals and may stall the deal for weeks—or even months—until financial teams reconcile the additional taxes with the overall budget. This internal friction causes multiple approval layers, budget reallocation, etc.

3. Reliance on Relationship Selling Over Data-Driven Methodologies

While relationship-building is vital in LATAM’s business culture, overemphasizing personal rapport can hamper accurate forecasting and slow deal progression. A rep might have a great personal relationship with a prospect. Still, without a formal review of Decision Criteria or Budget scope, deals can appear closer to closing than they are. 

While techniques like MEDDPICC (Metrics, Economic Buyer, Decision Criteria, Decision Process, Paper Process, Identify Pain, Champion, Competition) or BANT-E (Budget, Authority, Need, Timeline, and Evaluation) are widely used in the U.S., it is often underutilized or resisted by LATAM teams. Without a standardized sales framework, deals may be prematurely labeled as “likely to close.” This inflates pipeline forecasts and confuses management looking for reliable sales projections.

A 2023 industry survey by Mordor Intelligence revealed a compelling statistic: sales teams that employed standardized qualification frameworks saw a 15% higher close rate across multiple regions, including Latin America. This success story serves as a testament to the effectiveness of these frameworks and should inspire sales teams to consider their adoption.

Final Notes

Vast opportunities and unique hurdles mark Latin America’s business environment. Still, currency fluctuations, withholding taxes, and differences in sales methodologies can all conspire to stall deals - often at the final stage. However, companies can mitigate these challenges by anticipating currency fluctuations, factoring in tax implications, adopting a standardized sales methodology, and fully capitalizing on the region’s enormous potential.

Ready to overcome these hurdles and capitalize on Latin America’s dynamic market? [Schedule an appointment here] to discuss how I can help you succeed in Latin America.

References

• Mordor Intelligence