Revenue growth from first principles with Barbara Adey
How should commercial teams react to today’s marketplace realities?
“In today’s market, commercial teams must act intentionally,” says Barbara Adey, Vice President and Head of the North America Sales and Marketing Center of Expertise, in this episode of Fearless Thinkers. Barbara and Rick Cheatham, CMO, offer practical tips for sellers and customers maneuvering high interest rates, stagnating growth, and more.
Most of us want to lead in a way that matters; to lift others up and build something people want to be part of.But too often, we’re socialized (explicitly or not) to lead a certain way: play it safe, stick to what’s proven, and avoid the questions that really need asking.
This podcast is about the people and ideas changing that story. We call them fearless thinkers.
Our guests are boundary-pushers, system challengers, and curious minds who look at today’s challenges and ask, “What if there is a better way?”If that’s the energy you’re looking for, you’ve come to the right place.
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Rick Cheatham: Many technology companies were able to weather the COVID storm, and many of them seem to have come out even stronger, but the last six to twelve months have not been easy. When we think about what revenue growth could or should look like for our clients out there in tech, I think it's an important time to have that discussion. What do you think is really different about today's market?
Barbara Adey: Many businesses, both on the sell side and the buyer side, have not had to deal with interest rates like we're seeing right now. For a long time, people were quite used to near-zero interest rates. And so that changes a lot about spending power on both sides.In all recessions, if we're really in a recession right now, we see specific verticals. What's specifically strange and interesting about the tech sector is that pandemic impact. So many companies were looking to operate in a different way, and that meant that there was a spike in spend for certain types of tech offers. The important thing we're running into now is that things are normalizing. And so that's an overlay to the changes we're seeing just with recessionary spend, and also with high interest rates.
Rick Cheatham: Given those marketplace realities, if you're sitting across the table from a chief revenue officer from a large tech company today, what would be your best advice?
Barbara Adey: The focus needs to be on meeting the client where they are. Our buyers in tech are scrutinizing expense more closely than ever, and that's the environment that we're in. It just means that selling into tech requires us to be much more intentional about how we describe value to a client.
Rick Cheatham: That is so important, to take that buyer perspective, and remember that as things might be tough for us as sellers, they're probably equally, if not [more tough], for our buyers.Many have lost a lot of control in their own decision making. As potentially more people are getting involved, the old ways of making decisions many times don't hold.
Barbara Adey: Absolutely seeing that, Rick, where the buyer that we're addressing had sign-off authority. Now, they need to not just get approval from a senior person, but they may also need to bring in a number of their peers.
Rick Cheatham: Let's take it again to the sales leader perspective. What should I be doing with my team differently?
Barbara Adey: It's important for sales leaders to discount their forecasts in a different way, or “handicap” [them]. As sales leaders, we do need to look at the forecast and delay some of the particular opportunities where there's a potential for a slowdown.The other couple of challenges I've seen in tech world: tech companies assume that the growth rate they've enjoyed over the last 10, 12 years is going to continue. For many mature companies in the space, they've hit their terminal market share, meaning you're never going to have 100 percent share. You probably have a majority share if you're the main player, but you are going to get to the point where that growth of your main product line is not going to continue as it has.What becomes important is that you have a plan. There needs to be an opportunity, either with organic growth or with acquisitions, to enter adjacent markets, but also to help our buyers sell internally and help them articulate the value to their companies.
Rick Cheatham: Right. Our ability to really align the value that we bring as an organization to multiple priorities within our clients’ organization makes all the difference in the world.
Barbara Adey: Paradoxically, the agility of moving spend around, which is relatively new, has created a situation where things can shift, and there may be a requirement for our customers to move spend to another category, apropos of some change in the environment that says, oh my goodness, we don't have money for this.So, therefore, the traditional budgeting process has been, in my observation, in the last few years just out the window… Things are flexing all the time and may also give us the opportunity to address a potential spend envelope that has opened.
Rick Cheatham: I would be curious for your perspective on how sellers can kind of facilitate decision making.
Barbara Adey: Here's a great example of an opportunity I'm engaged in right now… My buyer is really wanting [a] project to go forward, and so, he offered to sit with me and someone from my team and walk through how we were presenting the offer. In their company, they have not done a really detailed analysis [of] what we're calling go-to-market productivity, meaning looking at their whole spend across segments, with overlay teams and so on, and really understanding where are we overspending, and where are we underspending. So that's the offer on the table. But what's really exciting is that this buyer has, again, offered to sit down with us and customize our proposal in such a way that it will land with the head of revenue operations.[transition]
Rick Cheatham: So far, we've really been talking about this almost from a mature, established account management standpoint. But I'm wondering if you could give us some perspective on: if I was an early stage company, how is this potentially different?
Barbara Adey: The first thing is around getting product market fit. Entrepreneurs need to understand that their potential customer base may or may not see the need as they do, and it's important at the early stage of getting product market fit to make sure that your offer is going to fit within the operations of their buyers.A friend of mine is on his fourth startup. He's been very successful in creating a niche company and then selling it into a larger company. But recently, he reached out to a number of colleagues to review his value proposition – the client need, the pricing, the details of the offer, and whether we thought that it would fit a need in our organizations. So, that simple practice of engaging with a diverse set of reviewers is the best way (in terms of looking at product market fit).Once it's time to look at scaling the company, one of the really under-addressed topics is customer acquisition cost – so, what's it going to take for you to sell this offer? And can you afford to do that within your offer price? And making sure that it's big enough for the offer that you have in mind. And, as we continue down that maturity path — what's next?One of the lazy motions of sales is to set up the old hierarchy of business development reps and inside sales reps who will vet opportunities for the account manager to address. Now, it happens that there are some markets that are deeply technical, where the old way of doing things is just not going to work.In tech, there's a focus for the buyer on your website. That buyer wants to get to the point of really asking for a proposal before they even talk to you. So, the best practice then is to make sure your website is an easy way for buyers to understand the value — [that] they can go through the hierarchy of information that's provided, and feel like they want to engage in a proposal.
Rick Cheatham: I'm doing at least as much buying as I am selling these days in my current role, and I don't want to engage with someone until I'm looking for clarity. The old, “Hey, let me just take an hour of your time and explore your priorities” thing absolutely is not an option in my world.
Barbara Adey: No, it's the nature of our lives now. We're so busy — buyers especially. I've heard in very complicated markets, like cyber security, that a chief information security officer will say, “Yes, send me a video.” They would much prefer to see a well-executed three-minute video than have a 45-minute sales call. They just don't have time for it.Once we've [decided] to enter a market, it's important to address some things that are actually really hard to do. Can your account team speak a second language? Can they speak a new vertical, or can they talk about a new functional area? You may need to significantly upskill your team, and you may even need to think about an overlay sales team to support this new market entry.The other key piece in the tech world is that, as a software player, you're dependent upon implementation partners. They may be selling with you, or you may be actually dependent on those partners to build the implementation for end customers. That's something where you can't just assume that that implementation capacity will be there - that it's not already spoken for by your competitors. It's something that is really important to look at as a part of the market entry plan.[transition]
Rick Cheatham: Barbara, you've given us some tremendous insights today. I always think about the mid-level [who] is trying to do her or his best to make a difference in the business. What's your best advice for the local leader?
Barbara: The number one thing here is empathy. Understand where the buyers are at, and how best to help them make the sale internally. The other piece that I sometimes hear is, “Oh, we need more pipeline.” I would say it's actually more important to very carefully close the qualified business that we have and spend the extra time there.So that seems counterintuitive. More than ever, now, it's important to take the care with the potential deals for which we have visibility, and make sure that they close, as I mentioned before. Just be prepared for things to take a little longer than they have historically.
Rick Cheatham: Really great advice. When things aren't easy… Not that we lower expectations to the point that we don't expect performance, [but] that empathy driving the majority of our actions makes a huge difference.Thank you so much for the time today. Always great chatting, and I'm sure we'll have you back here in a few months.
Barbara Adey: Thanks so much, Rick, and the whole team, we'll talk to you again.
Related Content
There’s good news, though. A downturn can be a time for marketers to shine, to improve cross-functional collaboration, and to build or strengthen their status as an advisor to the business. The key is to avoid some common mistakes and, even better, seize often-overlooked opportunities.
Do not panic or over-flex
Organizations frequently react to downturns by adding— rushing to pile on new strategies, initiatives, tasks. Teams end up overloaded with the new and lose sight of what was already working or not working. Resist the impulse to over-flex, and instead, calmly consider how to best use your resources:
- With your team, explore how you can be 20 percent better, rather than trying to be 80 percent different and better.
- Let go of anything that isn’t effective and recommit to campaigns and initiatives that get results. Set a manageable pace and streamline the workflow. Avoid throwing too much at your team, which only leads to confusion, frustration, and misalignment when you can afford it least.
- Deepen your understanding of the customer. Recessions hit every customer and every company differently. Customers might suddenly behave differently (e.g., from innovation interest to cost focus). Recognizing how each client is affected builds trust over the long term. Also, remember that many industries thrive during a downturn (think tech or pharmaceuticals and healthcare in 2020). Identify clients that are still doing well and intensify your marketing efforts to them.
- Increase alignment with other business units and the C-suite. Collaborate to link marketing’s efforts with the those of sales, enablement, product development, etc., coordinating with their business cycles and using data points to drive decisions and messaging.
Get back to the fundamentals
- Continue branding efforts.
- Reinforce your brand identity. Begin by reengaging employees in company culture, mindset, and brand, an identity they know and are proud to represent. In a downturn, organizations sometimes soften their messaging. That’s a mistake. This is a time to energize your organization around reinforcing your brand identity to customers and potential customers. It’s time to get louder.
- Shift your messaging but protect your authenticity. Marketers must revisit their messaging and make changes that resonate with their target customer, whose own circumstances have changed. The danger: overreacting and being inauthentic to their brand, latching on to the latest buzzwords or mimicking what other companies are doing. The creates confusion and lowers customer engagement. Be authentic and build your customers’ confidence in your brand as something they can trust, even in times of uncertainty.
- Watch your language. When a downturn forces budget cuts, every cost comes under greater scrutiny. Improve the language you use to demonstrate how your product or service is not an expense, but an investment, an investment your customers can’t afford to not make. Draw attention to the value they’re getting, not the transaction.
- Embrace sustainability as a brand advantage. In a recent survey, 91 percent of US CEOs said they were convinced a recession was on its way; 59 percent of those executives said they were preparing for a downturn by pausing or reconsidering environmental, social, and governance (ESG) initiatives [i]. Research reveals this short-sighted tactic will likely backfire:“A review of company performance during the last recession also suggests that investments in sustainability can pay off during difficult times: between 2006 and 2010, the top 100 sustainable global companies experienced significantly higher mean sales growth, return on assets, profit before taxation, and cash flows from operations compared to control companies” [ii].
In a recession, marketers need to promote the importance of a strong sustainability strategy internally—and confidently tout that strategy externally.
- Revisit customer segmentation and the customer buying cycle.
- Identify those customers for whom what your organization provides is critical even in a downturn, or especially in a downturn. Increase your marketing efforts to those segments.
- Reexamine your customer’s buying cycle to understand what changes are happening during a downturn. This will allow you to make sure your marketing aligns with sales, enablement, and customer service—in sync with the buying process and focused on achieving results for the customer.
- Revamp your multi-channel and omni-channel marketing strategy. Even in the best of times, multi-channel marketing isn’t about playing in every channel. It’s about aligning to customers’ preferences. This becomes even more crucial in a sluggish economy. Prioritize the channels that either continue to bring in potential customers despite the downturn or that are best suited to reach those customer segments you’ve decided to direct your efforts toward during the downturn.
Focus on the long term
In a downturn, organizations understandably default to survival mode, anxious that today’s slowdown could be tomorrow’s crisis. However, research from the Great Recession confirms that companies thrive during a downturn when they don’t over-rotate on short-term tactics.
“There is also evidence of the benefits to maintaining a focus on the long term, even during a period of crisis: companies with a long-term orientation achieved higher annual growth and total shareholder return (TSR) than their counterparts during the previous recession” [iii].
For marketing leaders, this is the time to keep your eyes—and strategy—focused on the future. Use the downturn as a trigger to implement long-term initiatives and changes that will result in more data-driven, evidence-based, and efficient marketing.
While thriving during a recession is never easy, it doesn’t have to be complicated. By simply avoiding the temptation to over-flex and fixate on the short term and going back to the fundamentals, marketing can make a downturn their time to shine.
Sources
[i] KPMG 2022 U.S. CEO Outlook. Aug. 19, 2022. https://home.kpmg/xx/en/home/insights/2022/08/kpmg-2022-ceo-outlook.html[ii], [iii] “Five Ways a Sustainability Strategy Provides Clarity During a Crisis,” by Thomas Singer. Harvard.edu, July 6, 2020.
Only 20 percent of salespeople are prepared to offer real value during a sales call. In a tough market, this won’t cut it. Sellers who prepare for sales calls with general industry knowledge are not able to demonstrate the unique value required to sell in today’s increasingly challenging environment.
To successfully close deals, sellers need to be customer-centric and develop a deep understanding of their customer’s business objectives and success metrics, aligned to the organization’s specific context. This approach builds sellers’ credibility, conversational agility, and their ability to adjust their talking points to address clients’ different motivations, which are critical when spending isn’t really on the table.
Customer centricity also allows sellers to engage with clients throughout all parts of the sales cycle, which enables them to find unexpected opportunities. A seller who can shift gears mid-conversation by listening for cues will be able to address business priorities that genuinely land with the client—and get them invited back for further meetings. When sellers can see things from the customer’s perspective, they become trusted advisors.
By leveraging a customer-centric mindset to position themselves and their organization as a true partner for success, sellers will demonstrate value and win business, even in a tough economy. To build your teams’ customer centricity, sales leaders should facilitate the following steps:
1. Gather deep industry knowledge
It’s not enough to have company-specific history and context in your back pocket; industry expertise and context is critical to build rapport and trust. Going beyond “show me you know me” and demonstrating exactly how a product or service provides value to your customer and represents an investment is crucial in today’s market.
Sellers also need to gather in-depth information about the people seated across the table—prospects and customers specifically. To prepare, sellers should comb through social channels, read 10-Ks, and keep up with industry press, and ask: What challenges are keeping your prospects up at night? What innovations do they have in progress? Who are their competitors? Are there any recent shifts in customers they’re targeting? The context allows the seller to speak directly to prospects’ pain points and develop custom, thoughtful solutions.
2. Develop the skills to secure a meeting
For salespeople, of all the skills to master, getting introductions tops the list. In fact, 70 percent of customers value “connected processes,” otherwise known as contextualized engagements. Think of this as a seamless hand-off between a person in the seller’s network and a decision maker at a company.
Introductions go beyond the introduction itself. They also require sellers to share a strong point of view and ask the right questions so that customers will open up about their businesses. It’s all about being relevant and bringing value to the conversation.
3. Understand customers’ metrics
Many salespeople enter the room with some understanding of their customer’s business challenges. Not as many come in with knowledge around the financials, initiatives, and KPIs used to measure success. Knowing how a client will measure success allows a seller to speak to those points specifically.
The seller must focus on the customer by providing insight, following up regularly, and even helping to strategize next steps. The goal is to ensure that customers see the value of the company’s products or services and seek to adopt them. Success will encourage additional purchases, and over time, generate steady revenue streams.
4. Pair the offer with the value proposition
Without a clear understanding of how the company’s products or services deliver value for clients and how to present this in a compelling way, sellers will consistently fail to close deals. Understanding and delivering the value proposition is so mission critical that it should be built into every organization’s training and enablement.
One way to prepare sellers is through simulations, which immerse customer-facing teams in their customer’s challenges. Being on the inside of their customers’ business allows sellers to become more intuitive and thoughtful about developing solutions. Furthermore, they get to practice having challenging conversations, whether with their manager or a professional coach, in a safe environment that helps them to develop confidence.
Developing a customer-centric mindset is ever more critical for sellers who need to close deals in a challenging economic environment. Knowledge, conversational agility, and consultative skills enable sellers to become strategic client partners, win new business, expand critical accounts, and foster successful long-term relationships with important stakeholders in the market.
The hardest sell is not the one you have to make, it’s the one your buyer has to make internally against other priorities andinitiatives.
As a seller, you can feel it coming. When recession looms, a company’s first impulse is to dramatically cut spending. But you can work the downturn to your advantage—helping buyers position your solution not as just another cost competing for space in a tightened budget, but as the key to thriving in hard times.
These four steps will enable you to make it easier for yourbuyers to buy.
1. Improve your understanding of the situation
Take a macroeconomic view of how a downturn is affecting your customer’s business. Examine the trends moving against the company’s ability to purchase, in particular the implications of how these trends impact the budget areas where you sell today. Customers who were previously looking for 20 percent year-over-year growth are likely now aiming for something more conservative, or even hoping just to remain flat. Maintaining revenues and market position are more important than ever in a recession.
Even during market downturns, however, customers still have problems that need to be solved. Consider the decision levers influencing purchasing amid these macroeconomic trends by identifying high-level trends that customers need to focus on in a downturn. These will fall into at least some, and maybe all, of the following categories: technology, people, strategy, key initiatives, competitive landscape, and business performance. Examining the internal communication of your own company and any changes in how decisions are made mayalso give insight into what your customers are experiencing.
2. Improve your understanding of the situation
Even your strongest business relationships can now look much different due to economic pressures. Most customers will be facing increased scrutiny on any purchasing decision, with new stakeholders involved in the buying process who require higher levels of justification. A longer sales cycle has wide effects on your ability to manage your pipeline and territory and forecast your year. In a downturn, sales fundamentals are more important than ever, so you need to take these three actions:
Evaluate your customers. Looking at your book of business, who are your most critical stakeholders? Taking the time to evaluate which relationships are essential to sustain and beginning to formulate a game plan will keep you focused.
Discover and align to changing goals. Particularly for your most essential customers, you will need to be intentional about understanding how the looming recession is affecting their business and their decision-making processes. Often a short-term strategy is put in place to maintain financial health throughout the downturn. As a good partner, you need to be able to align with the new success targets and be proactive in the process.
Uncover the new competition. A downturn can bring a source of competition you haven’t faced before: other initiatives inside of your customer’s company competing for the same budget dollars. With waning confidence in growth, C-suite leaders have little choice but to tightly monitor costs throughout the organization. Inevitably, this ratchets up the internal competition for funding as finance departments try to decide which initiatives are mission-critical and which could wait for better conditions.
Getting back to basics and spending the time to deeply understand how the external pressures are creating new internal processes for your customers can help you better position yourself throughout the downturn.
3. Position yourself
Now that you fully understand the new strategy of your key accounts and any potential internal competition, you are ready to position yourself. While you may be tempted to look at shorter contracts or discounting, any amount of discounting can have long-term effects on your relationships and signal desperation. More than ever, it is critical that you create a value proposition for your customers. In addition, you must present a creative value proposition that is broad enough to appeal to the new stakeholders at the table. You may find yourself with C-suite executives involved in conversations that previously required lower-level sign off. Being able to confidently present your offering and think on your feet will be essential. Be sure to understand what value your offering brings to different areas of your customer’s organization and know what levers you have at your disposal to help a deal move along. Remember that just as your customers want to avoid any short-term missteps for their business, you must protect your business as well. Look for creative ways everyone can win.
4. Identify new opportunities
Finally, you need to be more proactive and agile during this time. While maintaining major accounts and relationships is important, finding new areas of business may be even more important. You might have built a book of business around an industry that is widely affected by the downturn. Networking with your team and staying current on market conditions can you help you find marketplace shifts and lead you to new opportunities. Communicating with your sales and marketing leadership on what you see and hear in the field may help everyone uncover new applications, industries, and customers for your products.
There’s no denying that selling in a downturn presents a new set of challenges. But by leveraging empathy and insights into the internal and external forces impacting customers, you canpartner with your buyers to make a winning business case—even in a downturn.
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