It’s impossible to ignore that the economy is trending downward. From mass layoffs to decreased VC funding, the signs are everywhere. No one wants to say that one word we’re all afraid of – the one that starts with “r” and ends with “ecession” – but it’s possible that it’s coming later in 2023.
But just because the economic outlook isn’t bright, it doesn’t mean that our lives have been put on pause. We still have to show up to work and figure out a way to sell in a climate that’s not as likely to buy.
It sounds like an impossible task; and while it’s not easy, it’s doable. Here’s how your go-to-market team can survive – and maybe even learn new ways to thrive– in an uncertain economic landscape.
1. A changing economy calls for a changed strategy
When the economy isn’t doing great, your go-to-market strategy definitely has to change. Everything focuses back on the buzzword of “efficiency.” That can mean different things for different companies and how you run as a business.
For us, the most important part of the equation is booking demos. That’s our way to measure not just our success, but also whether we are making smart changes to our strategy.
In my experience at Lusha, our way to change our strategy is cutting our spend on ads and investing instead in our sales team. Over the last few years – even the last 6 months – we’ve learned a lot more about what our most meaningful KPIs are and how we can get there most efficiently.
We cut our paid search budget because while those ads do a good job of bringing in free users, we can’t target as precisely as we want. We just have to hope that our ideal customer will find it and come to us. But we’re in a really crowded space, and that expense ultimately doesn’t tie back to the KPI that matters the most for us. So we recently took our paid search marketing budget and cut it by 75%. When the economy is in a slump, the temptation is to make that cut and hold the extra budget money. But instead, we took that budget and moved it into human capital, hiring an army of business development representatives (BDRs) and giving them intent data. We started building this machine around highly targeted warm outbound, and it’s worked really well for us.
Even before we started the warm outbound initiative with our new BDRs, just immediately after the cut, we produced the same number of demos. After 3 months investing in our warm outbound motion, we had our best demo month ever. And that was just this January, in the middle of an economic downturn. This strategy helped us to build a healthier business that can be more efficient and target the right customers.
2. Reinvest in outbound
Talking to others in the B2B industry, everyone’s doing the same thing. When the economy gets to this stage, you have to figure out how to cut expenses and reinvest wisely. Sometimes that turns into cutting headcount, which we’ve seen with the layoffs all over the tech industry. But ultimately, B2B companies need to look at their burn rate and see where they’re spending unwisely.
With this shift from marketing spend, I think other B2B companies really need to look into focusing on outbound. Even though we cut our ad budget by 75%, within a quarter we produced 20% more demos despite the economic climate. I think that’s a pretty encouraging story, and the potential for its success is not unique to us. We’re onto something interesting with warm outbound’s potential. It fits that buzzword of “efficiency,” which is what everyone’s looking for at this time.
3. Determine your most important KPIs
Even when we’re not in a struggling economy, revenue is the most important KPI. But that can be hard to use to measure the progress of smaller changes you make to your GTM strategy. The KPI won’t be the same for everybody – for us it’s demos, but for another B2B company it may be something else, like discovery calls or site visits.
To find your most important KPI at this time, look at what’s one degree away from revenue that’s not influenced just by sales, but by other parts of the business as well. Because then you can tie how these different arms of the GTM body influence the KPI. For example, my BDR team influences demos. But so do content marketing and product marketing managers. Even paid search influences demos.
You want to find the KPI closest to what you’re actually trying to influence that also has the broadest connection to the highest number of people in the GTM org. That way, everyone can set their sights on that and help push toward the common goal.
4. Motivate your GTM team with realistic goals
An economic downturn is discouraging– there’s no getting around that fact. But there are things that GTM leaders can do to keep their teams’ spirits up. A lot of that comes down to being transparent, but still setting challenging goals.
When coming up with goals and quotas, you need to recognize the climate you’re in. That may be easier said than done, but basically – be realistic. We knew in November and December that 2023 was going to be a tough year, but even so there were a lot of companies that raised quotas significantly coming into this year.
It’s tough because you have to find a balance. You can’t just drop goals to nothing, because despite everything it’s still a business and things need to keep running. But you also shouldn’t set goals that are doomed to fail. Motivating people is putting a goal in front of them that is challenging, but that they can attain. You don’t want to set a goal that they can only meet at 20-30%.
5. Get the whole organization involved
In the past, when money was cheap, companies would buy tools that didn’t fully fit their needs if there was one feature they loved. Now, B2B customers have to be more choosy with their purchases. So the company needs to adjust their mindset. Everybody in the company needs to become very customer-focused, even those in positions that aren’t customer-facing. The whole company needs to mobilize around the GTM organization since that’s ultimately what drives the business.
What does that look like? For us, it means that we’re doing so many more calls where we’ll bring in a representative from the product department or the VP of R&D. We’ve had some great wins from things like bringing in the legal department early on in the discussion when we knew there would be a potential issue the prospect would want addressed later in the opportunity. It’s something we did previously, too, but especially in this climate it’s important to keep in mind that if you can sense you’ll arrive at a roadblock, then mobilize as many of the troops as you can to help.
In an economic crisis you can either put your tail between your legs and just shut down, or you can figure out how to be smarter and more efficient. It’s not easy, but it’s an opportunity to figure out how you can be better as a business.
Key Takeaways:
- Go-to-market strategies need to shift to be more efficient. Cutting ad spend and moving toward an outbound initiative can bring success in a tough economy.
- You can motivate your teams by setting goals that are realistic but still a challenge.
- The whole organization needs to make sure they are customer-focused to help remove roadblocks.
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