Avoid 3 common sales mistakes startups make during a downturn

More than 150,000 workers lost their jobs this year as layoffs swept across the tech landscape since June. Constant news cycles have analyzed every aspect of these staff reductions for meaning and lessons. How did we get here? How are companies managing employees? Are there more layoffs on the way?

And, critically, what’s next for tech? Investors are now demanding profitability over growth. This extreme change in the business model investors want has left companies with difficult decisions ahead and no playbook. Without the liberty a low-cost capital environment affords, for investors, new ventures that promise uncertain returns are a thing of the past, or at least, a much smaller focus.

What every company needs now is efficient sales.

But there is a big difference between knowing that you need efficient revenue and knowing how to get it. Leaner teams, fewer resources, and a tough macro environment mean that CROs are forced to make big changes to budgets, staffing and how they market and sell.

But maintaining revenue while the CFO is cutting costs by 5%-20% is not an easy task for anyone — and doing more of the same won’t get you there.

The unfortunate truth is that unless you move beyond the same old buying group, you won’t move the needle.

The biggest mistakes to avoid

Preliminary data from Databook shows that an unusually high percentage of companies globally are in the midst of shifting their strategic priorities. Since these are typically multiyear commitments, this unprecedented shift dramatically changes the sales landscape for tech startups.

Holding tight to traditional sales incentives and levers won’t yield the step change that is needed to win.

Don’t raise pricing

Most startups are reliant on VC funding, and in today’s market, VCs are looking for a clear path to profitability. One seemingly “easy” way to improve margins is to increase pricing.

This is a fix you can only try once; you don’t want to keep raising prices in a competitive market. This is a temporary workaround at best, and it can easily backfire, as higher prices during a downturn can erode customer trust over the long run. It can also result in fewer renewals when there is less budget available.

Avoid 3 common sales mistakes startups make during a downturn by Ram Iyer originally published on TechCrunch

Pin It on Pinterest

Share This