5 Ways CROs Are Building Revenue Resiliency
You are a CRO who just closed an excellent 2019, had an energizing sales kickoff that aligned everyone around a strong strategy, and your first quarter is shaping up to be another record quarter. Then COVID-19 hits. Your teams have to quickly move to a distributed work environment, travel comes to a screeching halt, and all deals now have to be closed virtually. These changes have not only impacted how teams work together but have also critically affected customer purchasing habits and priorities.
At Sapphire Ventures, we know none of us alone will have all the answers to this challenge, so we have been hosting CRO forums to discuss what’s been working and what hasn’t for CROs and their teams. While CROs’ response to this crisis will continue to evolve, we wanted to share what we’ve been hearing and advising to-date. Here are some measures that CROs may want to consider now to incentivize prospects, overcome objections, engage customers with empathy and build confidence around your revenue process.
1. Realign Your Sales Team
Unquestionably, you should focus on any customers who are experiencing time-sensitive pains from this crisis that your specific technology can help address. Outside of those potential customers, it is wise to assess the impacts of this current pandemic. In a spin on William Gibson’s infamous quote; this crisis is already here- it’s just not very evenly distributed. Unlike previous recessions, where all industries were negatively impacted to varying degrees, the current recession has created outsized tailwinds and headwinds for certain industries. For example, grocers, CPG, telecommunication, gaming, and media companies are all experiencing a surge in business. Other industries such as hospitality, energy, financial services, and retail have been severely negatively impacted.
It behooves you and your company to be cognizant of this fact and adjust your sales segmentation accordingly. While you shouldn’t completely write off an industry, you also don’t want a salesperson repeatedly contacting a prospect that is in no position to have a meaningful or relevant conversation right now. You risk both having your company look tone-deaf and your salesperson burning out. Rally around your existing customers in the industries that have been negatively impacted by this crisis, but think about reassigning a portion of your sales team to industries that are experiencing a boon from the change in economic activity.
2. Adjust Your Messaging
What resonated with a prospect only a month ago may no longer work. At Sapphire, we have reached out to our CIO network to get their feedback, and it’s clear that recent events have shifted their businesses’ focus, attention, and time. More importantly, people are being impacted on a personal level on one of Maslow’s most basic needs–health.
Coach your sales team to engage with empathy and acknowledge the fact that we are not operating in a business as usual environment. Realize what initiatives and drivers may be a priority today for your prospective customers. Drivers such as business continuity, efficiency, user simplicity, collaboration, and productivity have taken a front seat at many companies. As a member of our CIO network has noted even now in the downturn, “Money will flow to business and IT pain points.” Identify how your solution helps to support these priorities and focus on establishing your messaging around these new areas of critical needs for your customer. For example, as most companies have been thrust into a distributed work environment, you may want to discuss how your solution enables collaboration, provides a single view of the truth, and also emphasize its simple implementation and user-friendly design.
Another good idea is to take the time to build objection documents for your field teams. Record every objection they are hearing from customers. Then, work with your sales enablement team to create thoughtful responses that your sales team can utilize in these scenarios.
3. Double Down on Existing Customers
While it may be challenging and time-consuming to engage with new prospects today, you and your team should pay particular attention to existing customers. To preserve your existing ARR, it’s paramount that these customers do not churn. The only thing worse than not booking new business is losing existing business. Lean on your customer success team heavily to make sure your customers are maximizing the full benefit of your solution and empower them to partner with your sales team to engage in expansion opportunities.
As my colleague Jai noted in his recent blog, this is also an excellent time to listen to your customers on potential product features they have been asking for, but you haven’t had the chance to attend to. By doing so, you can build product features that continue to differentiate your company from your competitors, expand your offering, and improve customer satisfaction.
These efforts will not only help to preserve ARR, but prepare your company to come out of the downturn stronger.
4. Keep Prospects Engaged
While sales teams are always hoping to drive adoption, they should be adjusting their messaging from “here is why you should buy solution xyz” to also “let me educate you on how we can help even if you are not ready to buy today”. It’s about building a relationship as a trusted advisor and helping prospects become smarter about the space your company operates in until this period passes.
To do so, think about lightening or removing approval processes for your sales team to engage in activities such as trials, POCs, educational workshops, or complimentary assessments, so that they can respond quickly with a compelling opportunity if they receive an objection. For more information and tips on how to increase your success rates on POCs, you can read the blog we published on this topic here.
The key is to keep prospects engaged such that when this crisis subsides, you have a robust pipeline of prospects who are already educated on the space you operate in and are ready to have meaningful sales discussions.
5. Be Flexible, But Know Your Value
The new reality we live in most likely means budgets may be eliminated or severely constrained at some companies. It’s important to work with your prospects and existing customers to make sure they can find ways to add or retain your solution. For those industries and companies that are most impacted, you may want to look at one-time discounting, spreading payments out quarterly or monthly, or deferring payments. These decisions need to be made carefully and with alignment from your executive team, but being flexible with your customer now could pay dividends later.
This does not mean automatically caving to your customer’s price discount requests (especially if it’s a company that has not been as negatively impacted). It’s important to understand your solution’s value and rationalize your price accordingly. You may want to consider pricing your solution against business value delivered (i.e. increased productivity, active users, key metrics, business results). In these scenarios, customers only get billed for their rate of usage of your solution or against predefined business benefits they experience. That sends a strong message to customers that your company is aligned around their success and gives them confidence that they will only be billed for value incurred.
That also goes for your suppliers. If you truly need to, don’t hesitate to ask your suppliers if they can be flexible around your payment terms, so that you can properly manage working capital and navigate this time of uncertainty.
Great uncertainty undoubtedly causes discomfort for companies and customers alike. However, those CROs who choose to use this ambiguity as an opportunity to evolve their GTM motion, expand their product offering, strengthen customer relationships and educate prospects will be better able to navigate these current choppy seas and emerge even stronger.
Disclaimer: Nothing presented herein is intended to constitute investment advice, and under no circumstances should any information provided herein be used or considered as an offer to sell or a solicitation of an offer to buy an interest in any investment fund managed by Sapphire Ventures. Information provided reflects Sapphire Ventures’ views as of a particular point time. Such views are subject to change at any point and Sapphire Ventures shall not be obligated to provide notice of any change. Sapphire Ventures does not solicit or make its services available to the public and none of the funds are currently open to new investors. Past performance is not indicative of future performance.