Given the environment, my colleagues and I wanted to move beyond the “things are tough all over” sentiment to talk about specific tactics of selling in a recession. In March, we hosted a dinner for SaaS company Sales VPs to share secrets and know-how of selling in a challenging time. Dave Yarnold, the former VP Sales of SuccessFactors, led the discussion. His content was very informative, take a spin through his slides: Selling in a Downturn for Battery Dinner.
One of the guests took rough notes, which I’ve edited and paraphrased….
- Sell Value and ROI, Period. This is really the only way to be successful, and is particularly true in a down economy. The key is to develop a number of ROI models segmented by customer and product usage type. No model, no sale.
- Beware The Capacity Model Death Spiral. Sales capacity models can be deceiving: they are driven based on the buildup of individual performance relative to an average quota. The key question is: will these individuals deliver to their average quota or better? The challenge is that difficult economic times often highlight an individual’s inability to deliver on their average quota. The problem is that revenue projections can be built on individual capacity, and broader company expenses are also geared to this performance. So an individual’s under-performance can have a ripple effect that cascades through the sales organization and then the rest of the company: “misses” case sales firing, which in turn causes reductions in force in development, services, G&A, etc. In a down market, it’s important to remove below average performers early, and as always, you need to train, motivate, incentivize, and fuel your average and top performers like never before.
- Remember: Pipelines are Perishable. Don’t wait or allow deals to languish in pipelines as they are ALWAYS perishable. In these times, with more turnover and harder selling environments, deals will “spoil” even faster. Times like these require a concerted nurturing process to get closed (see point below). At the same time, deals are often stalled in this environment and need a recycling effort to revisit when spending freezes or re-orgs are behind buyers and they can think about new projects.
- Plan For Tougher Approval Times and Processes. To get a decision, expect 2.5x more approvers and 2 levels of seniority higher than you saw in more stable times. And, expect more decision makers to crop up along the way than those you were introduced to at the beginning. The key is to plan for these obstacles from both a pipeline timing and sales process perspective.
- Get Close, Build Trust. Executive connections and trusted champions are REQUIRED to close business today. Buyers are scared and won’t take risks. If you can help them feel that the water’s warm with senior executive sponsorship, buyers might take the plunge.
- Buyers Are Not Lying. “Surprises” are coming up later in the cycle and more frequently. Prospects aren’t lying when they say they didn’t know something was coming or don’t know what’s going on. Even VPs don’t know what the CEO is going to do the next day because the CEO doesn’t know what the Board will do the next day. Multiple checkpoints in the process are good to make sure that the close process / decision makers are not changing.
- Sales Training Should Be a Rule, Not an Exception. Good sales organizations don’t hold sales training as a one-time event, they do it continuously. Best-in-class companies create a slot for other parts of the organization to present – new product updates, customer success stories, competitive analytics, services engagement changes, etc. This teach-in format can be tacked onto the weekly sales pipeline review. One company has the salesforce grade each one of these interactions to ensure a closed loop feedback process.
- Say No To End of Quarter / End of Period Dates. These are really arbitrary dates made up by the Sales Person. Most leading SaaS companies are moving from quarterly to monthly quotas to manage the end of quarter problem. Many SaaS companies still have 50% of their quarter come in during the last few days of the quarter. However, it’s up to the sales team to actually control that emotional requirement.
- Valuable Emails Get Through. Emails that get through to prospects in tough times are the exact opposite of marketing speak. Some interesting examples include: “give you $100 for 15 minutes of your time, if I’m not valuable” email, the “donate to your charity” email, and “one sentence who-can-make-decisions-if-it-isn’t-you” email.
- Build For the Long Term. Times are difficult, but people, processes, and policies that are built in this environment will only help the company to excel during good times.
We enjoyed having Dave share his insights with the group. Please feel free to post any comments or questions.