5 Ways CROs Can Thrive in a Challenging Environment
- Thoughtful investments in technology, process, and operations to enhance focus and maximize productivity.
- Adjust your go-to-market strategy, focusing on executive relationships and short-ROI projects with resilient prospects, to enhance your chances of closing deals.
- Invest in recruiting, culture, and developing people, across sales and customer success teams, to drive growth and strong customer retention.
Analysts and economists may disagree whether we are heading into a recession, but Chief Revenue Officers (CROs) know firsthand that customers are tightening their belts. Sales pipelines may be strong, but deals are slow to get approved. In times of economic uncertainty, it’s not unusual to see previously approved projects reevaluated and under more scrutiny than ever before.
Some companies may be tempted to only focus internally to manage cost and not consider investing in innovation or growth, while others will look for thoughtful opportunities to invest in technology improvements as well as people and culture. The latter are the companies that will be leading when the economy recovers, leaving the former even further behind. The difference between these two cohorts is massive! Data from over a thousand tech companies shows significant divergence in the trajectory of winners vs. losers after the last recession.
So as CROs, what can we do to identify the most promising opportunities and prioritize where we should be focusing our efforts?
Here are 5 ways we have seen companies and their respective CROs thrive in a challenging environment:
Winning in an uncertain market
- Revaluate your value proposition
- Identify your most resilient prospects
- De-risk your pipeline
- Develop and manage your sales team
- Strengthen customer success teams to maximize retention
Revaluate your value proposition to land and expand
In a challenging environment, the larger projects with longer ROIs compete against smaller, more impactful investments throughout the organization. This is an ideal time to repackage your messaging and delivery approach to further strengthen your case for why companies should use your products.
You may need to pivot your go-to-market (GTM) strategy towards more consumable offerings that deliver quick wins. In a challenging environment, it is better to get your foot in the door, start delivering value, and begin building a clear roadmap for the bigger picture. Be careful when positioning projects that will take a long time to return value to the customer, as those are the deals most likely to be put on hold. Focusing on how your solution will add immediate value over other possible competing projects will improve your chances of getting a project approved. Value needs to be measured in tangible quantitative improvements that leave your customer in an even stronger position when the economy rebounds.
To support these efforts, Sales and Marketing can develop content together and run campaigns that lead with the mission-critical value of your solution, leaving behind any “nice to haves” in your messaging. Building messaging around value, rather than price or discounts, will help show customers how you are going to deliver real measurable results.
Identify your most resilient prospects
In a challenging environment, CROs must qualify harder, doubling down on funnel insights and sales productivity data. It’s critical to understand how the sales funnel is performing and where to course correct. As an example, we’re finding prospects that are more vulnerable to the macro environment are slower to move through the funnel. As a result, you might want to re-qualify your accounts and spend more time on your most resilient prospects and customers.
This can be accomplished through enriching your prospect list with additional datapoints that are indicative of a healthy business (e.g., FTE growth, public information on profitability & growth, size of organization, qualitative trends on the prospect’s budgets). By assigning a higher weight to the resilient factors that matter to your customers, it can help re-score and requalify the prospects that are most likely to buy in this environment.
Through a re-prioritization of the prospect list, we saw a 25% improvement in funnel conversion from marketing qualified leads (MQLs) to sales qualified leads (SQLs) at one of our portfolio companies. This company secured more demos, converted more demos into opportunities, and saw pipeline velocity and win rates accelerate.
De-risk your pipeline and increase your win rate through executive bridging
Among CRO’s top priorities in a challenging environment is operational efficiency. Clearly defined KPIs, pipeline, and forecast insights will become more important.
It is also never too early to de-risk a project through executive bridging, whereby you as CRO connect with a C-Suite decision maker at your customer. We have seen teams disappointed at the end of a quarter when they thought the deal was done and the sponsor stopped returning calls. We have also seen cases where a manager or other company executive attempted to call a customer they’ve never met before and received limited engagement. This can easily be avoided with early executive bridging, especially in a challenging environment where approval authority and processes are changing all the time.
The goal is to validate that the project your sales team is pursuing has a viable timeline, hurdle rates that are understood, and an approval process that is clearly defined. A mutual action plan with a prospect helps drive accountability and clarity. Paired with executive engagement, a plan can de-risk projects and keep deals from slipping.
Develop and manage your sales team
A slowdown in the economy is not a time to slow down your investment in your people. It could be an opportune time to fill open positions or even upgrade weaker performers as top talent in the market looks for new opportunities. Keeping the recruiting engine going, especially in the face of natural attrition, will help you prepare for when the momentum swings back. It can sometimes take over a year to recruit, enable, and build account executive (AE) productivity.
The job of a good sales leader is continuing to focus on culture, maintaining morale, and most importantly, keeping a positive spirit. When things get tough, everyone is looking at you and how you respond. Such environments are a great time to redesign a comprehensive enablement program, with effective onboarding and ongoing learning and development opportunities. Invest in training, new sales plays, refreshed competitive information and battle cards, perfecting your corporate pitch, and continuing to prospect. Keep the teams motivated with regular calls, sharing successful customer “Go Live” stories, and new content. This will improve sales productivity and engagement across the organization.
Strengthen customer success teams to maximize retention
In a challenging environment, your customers will most likely focus their procurement organization on evaluating vendor agreements and looking for ways to reduce cost. It pays to ensure your Sales and Customer Success (CS) teams are prepared for these conversations. Your CS teams’ involvement will be critical for maximizing Gross and Net Revenue Retention during this period.
Now is the time to analyze stage dynamics, from onboarding customers to adoption to renewal, to prevent churn and maximize expansion. At the individual customer level, it is critical to measure the quantifiable value your customer is gaining from your solution and identify opportunities to optimize this value and their experience with their existing investment.
Pivot the conversation away from cost reductions and focus on incremental value. CS should implement a customer lifecycle management program to ensure adoption, keep engagement high, and drive renewal as well as expansion. In advance of a renewal (e.g. at least 6 months out), CS can prioritize value to the customer and look for new upsell & cross-sell opportunities.
When growth slows across the economy, the best sales organizations will adapt and continue to thrive. Sales Leaders win by focusing on operational efficiency, keeping their teams motivated, qualifying relentlessly through executive bridging, and repackaging their value proposition for quick, high value successes.
Maximize your retention by working closely with your CS team to demonstrate measurable value and secure new opportunities. Changing the conversation to be about value and not price can increase Net Revenue Retention while reducing overall churn. Many sales organizations can thrive in a challenging environment.
Steve Winter Featured Contributor
Steve is an Operations Advisor with Advent advising deal teams and portfolio companies on GTM matters. Steve recently retired as the Chief Revenue Officer of Coupa Software, and was previously the EVP of Worldwide Sales and Operations at Marketo. Prior to that, Steve held a number of key global leadership positions at SAP including Managing Director SAP UKI, Chief Operating Officer (COO) SAP North America, and Executive Vice President Enterprise Sales.