Nicole Sievers
Last week, Rob Go was joined by Rob Stevens for a virtual chat on running businesses during hard times. Stevens has held roles across verticals such as head of sales, marketing, product, and professional services at five startups over twenty years. He has experience in B2B, supply chain, robotics, SaaS, and IoT spaces. Currently, he is an advisor, board member and angel investor. He helps early-stage startups with sales, marketing, and general “go to market” topics.
You can view the recording below, or check out the TLDR highlights in this post
Understand Your Customer and Their Timelines
If you’re at a company that is particularly impacted by the events of the current environment, whether that be food, hospitality, travel, entertainment, etc., you should be thinking about what your segmentation looks like. When you think about which markets you’re in, take a look at where you want to put most of your effort.
Early on, startups are usually in a broad segment of markets, looking for product market fit. If you’re early enough, you’ve still got options and you haven’t quite placed your bets yet. Seek out 2 or 3 industries where you have a few customers already and come up with a handful of ways to approach these customers during this time and sell to them effectively.
Think about our current situation in two phases: 1. The short run, which is the pandemic, and 2. the long run, which is the recession.
If a company you’re trying to sell to is in the healthcare space right now, they are seeking very specific solutions to very specific problems, and just don’t have time to talk to anybody else. That won’t be the case forever, but for the next few months, this will be true for a handful of sectors. The ship is on fire and if you’re not selling fire extinguishers, they’re not going to buy anything from you.
Really Connect With Your Champion
If you can get a hold of your champion, try to have an honest conversation about what’s going on in the company. Usually, you don’t try and have these conversations so close to finish line, you want to close the deal quickly and not bring up distractions. But we are in unusual times. Try to understand the context this person is operating in. Is the company struggling? Have they had a massive layoff? Is their supply chain collapsing?
Your champion is the person who’s going to push this deal through to get done. What is their job? How has it changed in the last week or so? How is it changing over the next couple of weeks? Can you develop a new value prop based on the changing business conditions this person just described to you?
If you cannot, then step back, look for a way to be helpful. Don’t burn that relationship. Preserve that relationship through the pandemic and think about how you can come back to this person in a few months from now and try to restart that sales process. Don’t have them write you off because you pushed too hard.
If you can build a value prop to that new world they’re living in, then this is your chance to turn it around. Be flexible. Demonstrate the things that big companies love about buying from startups. Which is they’re flexible and agile. Change the positioning, the pricing, the onboarding, but, don’t just guess. Have that conversation, have that human connection, so you actually understand what’s happening in this company.
Retaining Customers in a Recession
Right now, we’re in the phase where everything just sort of freezes because no one knows what’s going on, but, gradually a new reality will emerge. During the next phase, economic activity will slow down, but life will continue. People will go back to work; they’re just doing less of it.
Recognize that right now, people are dying and getting sick. Your sales process is not on anyone’s mind right now. As we emerge from the pandemic phase, into the recession, you can adapt to that and you can sell into that. Recessions happen, and you can figure out how to navigate that situation.
During a recession, step one is not to discount by 10% across the board, step one is to see what’s going on at that company. After talking to your champion, you should have a good understanding of the decision-making framework they’re working with. Has their budget been slashed while everything else has stayed the same? Then you can ask a question like, “you’re seeing the same objectives but less money, would a 10% discount help close this deal?”. But, only do this type of thing if you know price is the only factor, which most of the time it isn’t.
You’re most likely going to have a churn problem next year because a lot of contracts are going to get evaluated and anything that’s on the margin is going to get cut. Take some of that outbound effort, and task salespeople to account manager efforts. Have them focus on retention and growth in your existing accounts that have seen success. If you were in the budget last year, you should work hard to keep that account.
If you are further along and you have existing customers, then spend a lot of time thinking about those customers, and their needs, because it’s always been true that it’s easier to retain a customer than win one, but it is far more true during recession period.
Chill Out & Build Brand
The hard sell is not the right answer in the short run. If you have deals that are about to close in industries that are not getting crushed, then absolutely rush to close those. If you’re selling into one of the affected industries, then look for ways to be helpful without selling, because no one’s buying.
Instead, look for ways to build your brand. Take resources away from the direct sales effort and think about how you could apply those resources in ways to be helpful to your customer. Not a dull white paper, but something that shows why your products are awesome and actually helpful in a way that is relevant to your brand. Maybe it’s a free tool that takes advantage of your underlying technology but solves a slightly different problem other than what your core product does. These types of resources will be useful post pandemic and recession as well.
Another thing you should slow down with is hiring. Yes, you probably do need to fill a few roles, but don’t rush it right now. You need to control your burn at the moment, and, when the recession truly hits in the next quarter or two, you’re going to start to see massive layoffs, and have really good candidates flood the market. So track who you want to hire, and watch, and connect with them during this time.
Above all, don’t be a jerk. There’s a great book by David Meerman Scott about newsjacking, which is a marketing technique, where you jump on news to try and be relevant. Tragedies are not a time for newsjacking. Strive to be like the 3D printing companies who have shifted to making face masks and PPE for hospitals, or apparel companies switching to making masks. These acts of kindness not only build good brand awareness for the community, but also for your employees. You want your employees to believe in the mission and rally around each other. Startups generally get started to try and make a dent in the universe or make the world a little bit better. This is your chance to walk the walk.