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Mastering the “Frugalnomics” Sales Environment

It is an interesting, roller-coaster of a time to be a sales leader. When the pandemic first struck, budgets completely froze, and startups braced for the worst. As time has passed, the tech economy hasn’t been hit as strongly as many expected, but many startups are still operating in a “wait-and-see” environment in which they push ahead with their business needs—including necessary spend—while attempting to keep risks and costs tightly in check.

Below, I've rounded up the top tips I've been sharing with our companies on mastering a “Frugalnomics” sales environment.

A “no” two months ago doesn’t mean a “no” now. Try again.

First, the good news. Activity levels are up, both for internal employees and among customers.

At first, it took a while for many sales representatives to shift from working in offices to working from home where they were no longer sitting side-by-side with their peers discussing deals, and where they and their managers weren’t sitting in war rooms monitoring the leaderboards together. While many engineering teams shifted to work from home seamlessly, it has taken sales teams longer to adapt. At first, meetings and productivity took a hit, but by now, most people are back in a groove.

The same goes for your prospects. With more comfort about the health of their businesses, prospects who wouldn’t accept your team’s meeting requests even a few months ago are much more likely to accept them now. So try again. Just note that during the pandemic, average meeting lengths are 20% shorter, so direct your reps to be extra efficient with prospects’ time.

Sales visibility has decreased. Invest in technology to increase clarity.

While prospects may be taking more meetings again, but it may still take longer for deals to close, if ever. Also, be prepared for the price-per transaction to be lower as well. 

Forecasting has never been tougher, nor more delayed. You’re not likely to have a good gauge on how deals are really progressing. I recommend investing in Sales Engagement technology like SalesLoft to help improve what limited visibility you have, and help your reps prioritize activity at each stage.

Since we know time kills all deals, increasing visibility starts with mapping typical sales stages so you know what a healthy deal looks like in today’s environment. For example, maybe before the pandemic deals on average spent 20 days in discovery, but now it’s closer to 30. If you reach 30 days and the deal hasn’t progressed, you know to revise down your projections. On a related note, if you know that 30 days is the typical length for this stage in the sales cycle, set up reminders at days 20 and 25 to make sure sales reps know when to re-engage before the deal dies on the vine.

Tier accounts by likelihood to close.

I’m always surprised when sales organizations don’t think to tier their accounts. Sales resources are so precious and tiering is critical to helping sales teams focus on the deals with the highest propensity to close.

It’s so important to have a tier one, two, three, etc. Tier one accounts may be those you expect to close within the standard sales cycle. Tier two may not be as responsive. Tier three, even less so, so you want to set up alerts to re-engage at key stages but otherwise don’t spend too much time on them. Create a tiering system that is easy to manage and update to ensure your always looking at the most accurate information.

Take coaching on the virtual road.

In the pre-pandemic world, sales leaders would hang out in the bullpen and listen in to deals to get a sense for what prospects are saying, how deals are going, and offered tips on how to tweak messaging to resonate better. Right now, everyone has to rely on recorded calls and Zoom, both to understand conversations happening in the market and to learn how to improve engagement. And because you can't clone yourself (at least, not yet), it is important to leverage tools like Chorus.ai that help sales leaders and reps quickly identify what’s working, what's not and what’s changed in the customer narrative. 

It’s also the best way to quickly create content to help you onboard, coach, and develop your new reps.

Build empathy into your sales narrative.

It’s always a best practice to be customer-centric, but during a pandemic, it’s a requirement. The most effective sales teams right now have reshaped their narratives to focus more on the customers and their shifting needs and goals. For example, before COVID, many prospects may have been focused on growth, but now they’re having to do more with less, most of the conversation should shift to risk mitigation, cost-cutting and overall preservation.

No matter how well-honed your messages may have been before, take another look at them now. In fact, the narrative continues to shift as the pandemic evolves, so even if you revisited messaging in March and April, it’s time to do it again. Make it a regular exercise as things are still changing rapidly. Go back to basics to understand who you’re targeting and why, what their challenges are with work and even their own personal challenges managing COVID and the associated new lifestyle. People talk about their personal lives much more than they ever did before with us all working from home and many parents simultaneously working while homeschooling their kids. Home and work boundaries are blurred, and messages need to be updated to resonate with what people are experiencing and feeling right now.

Develop a spectrum of messaging.

At a high level, I’m seeing that messaging around improving companies’ productivity isn’t resonating as much right now as helping companies retain and redevelop their customers. Of course, this also varies by who you’re selling to within an organization. IT groups may still care a lot about costs, but the CIO may care a lot about reducing risk, while operations may be much more focused on the customer, so you really want to not only update your messaging but also present a spectrum of values, all showing that it’s more expensive to do nothing than to use your services. 

Remember, it's never just one size fits all messaging across the board.  

Leverage customer success for repeat sales success.

SaaS apps are generally easy-to-buy (sometimes with just a credit card) and easy-to-use. But the kicker is that implementing the change across the team is really hard. Your Customer Success Managers should be working hard to ensure new customers are getting the most value out of your solution. With their deep relationships, they also have an incredible opportunity to identify, upsell, and find opportunities to expand for the sales team. As a sales leader, you should be thinking about them as an extension of your team to bridge the gaps created between sales, marketing and product. Oftentimes, they have a closer ear to the ground and can better decipher your customers' needs, even if it means reading between the lines.

It is so important to use every connection and touchpoint your organization has to understand what customers are saying, thinking, feeling and really doing.

Utilization trumps short-term revenue. Price accordingly.

As early stage investors, one of the core metrics we pay attention to is utilization—aka, customer love. We look at how many of your monthly customers are using the product, daily (aka DAU/MAU). The higher the utilization, the more customer love, the more ‘perceived value’ of your products. Higher value usually means you can drive higher prices. However, in our current environment many businesses are looking for ways to reduce costs, and in doing so, they are looking for ways to get creative with pricing. This might come in the form of buying only what they need (instead of buying for growth) or thinking about shared licenses. 

A better approach is to adopt a guaranteed return or guaranteed value. This ensures that everyone is responsible for the customers success and drives a higher focus on value vs price.

Show empathy to your sales team, too.

This is a tough time for everyone, and giving soaring infection rates, you never know what any other person may be experiencing right now. I’m always talking about the importance of empathy in sales, but don’t just show empathy for your customers. Extend it to your own team, too.

We all need a sympathetic ear and a little extra flexibility during this unprecedented time so I hope this was helpful. As always, drop me a note at @douglandis or on LinkedIn for more.

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