New normal, new processes
The early stages of the pandemic were all about survival mode. Go-to-Market, in particular, came to a screeching halt. In a matter of days, most marketing teams were forced to put their campaigns on hold. Sales leaders had to immediately reassess bookings and revenue forecasts in an attempt to adjust their projections against the Great Unknown. In many cases, we saw revenue projections drop by 40%-50%, driven by fear of blanketed budget cuts. However, as we moved from crisis management to recovery mode, we saw these projections reevaluated and adjusted again on a quarterly basis. Now, while revenue expectations may continue to require additional adjustments, I’m beginning to see something I haven’t seen for some time: optimism. More and more companies believe they’ll hit adjusted revenue targets as long as the situation holds steady.
On the buyer side, most people assume that all budgets get cut during times of economic uncertainty. In actuality, unless you were in an industry that shut down completely, budgets were put on hold. Companies needed time to re-prioritize and get their bearings to sort ‘must-haves’ from ‘nice-to-haves.’ Interestingly enough, many leaders found that software platforms actually played a significant role in reducing risk and managing costs. (This is in contrast to the tools that aim to push exponential growth, which would likely fall into the "nice-to-have" category.)
Not only that, but the entire buying process has shifted. During Shelter-in-Place and WFH, the casual water cooler conversations around the office are no longer. What once was almost effortless now requires much more energy, time commitment, and planning. It doesn’t necessarily mean it can’t be done. In fact, we absolutely have seen amazing relationships built through platforms like Zoom and Slack, but adjusting to the new “virtual” relationship norms took some time and, as a result, the buying process has slowed down. As of now, the typical sales cycle is at least 2-3 months longer than before. One of the many reasons for the change is that approval levels have been raised dramatically. In other words, what could have been approved by a manager before, now may take another two levels of management approval to go through.
Quick Take: Be prepared for budget scrutiny, extended buying processes and new budget approval processes.
Where are the new opportunities?
I’ve talked to countless professionals across many functional areas, and it has become clear that one silver lining from the pandemic has been for company leaders to slow down and revisit strategies. Companies are rethinking their ICP (ideal customer profile) and taking a deeper look at where there might be new opportunities. Rethinking your ICP will help you to better understand where the buyers with the least amount of buying friction are hiding. Doing this will also help you to move away from the customers in market segments that are faltering.
One of our portfolio companies, Retail Zipline, was primarily focused on their global retail customers, giving HQ’s a unified platform to streamline communications across all retail locations. But when COVID hit, and brick-and-mortar shops closed, they quickly identified large market potential in 'essential retail' such as grocery and convenience stores. This strategic pivot had led them to close some marquee new customers and re-strategize their product offerings.
Quick Take: Where else can you apply your product? Think outside the box and uncover new opportunities in adjacent markets.
Recognizing your value to existing customers
No matter how you slice it, new customer acquisition costs remain anywhere from 3X to 5X more expensive than maintaining existing customers. Because of this, you should be extremely mindful of your approach to existing customers; you need them to stay and to be your ally. If you consistently showcase — organically and genuinely — the value you’ve brought to their organization and they can acknowledge it, then requesting to expand that conversation across the organization is fair. You've earned it.
However, you must be careful with how you make this request. One of the challenges I see most often involves framing this request with a “sales lens.” The typical way of making a request for a deeper relationship is something along the lines of: "Can you make an introduction to x because I really think they could get value out of our solution?” Framing it this way is telling them you believe you have the right to call in a favor. This rarely works.
A better approach, and one that is more disarming, would be to say, “We've been long term partners with proven value. Are you open to making an introduction to X,Y,Z?" This statement allows your champion to decide if you've earned the request versus pressuring them into making a choice (they might not have wanted to make in the first place). In this case, you're asking permission, which, in turn, allows them to acknowledge your value and commitment. Btw, this approach will quickly reveal how they really think or feel about you.
Quick Take: Be thoughtful with the words you use. “Are you open to” is a softer way of making a request. Most sales people tend to make unwarranted demands.
In Sales, value realization is a very important, but often misunderstood concept. Value realization is about identifying how your existing customers can get the maximum value from the purchase they've made with you. The best way to understand your product's real value is to spend some time with your customer success teams. They will know precisely how your customers are really using your products and can more easily quantify the value.
In this new environment, we find that it’s even more important today to do the right by your customers and ensure that they utilize what they’ve purchased. It’s a rookie mistake to try to upsell if your customers aren’t already utilizing every license and feature they purchased.
Quick Take: Make sure they are maximizing their current investment. Once you validate this, then, and only then, you can request to expand across the organization.
As we navigate Sales and Go-to-Market in this crazy, post-COVID world, I am committed to hearing from and helping our community. Follow me on LinkedIn for the latest sales opportunities, virtual discussions, and tried and true best practices.
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