When times are right, many B2B products are considered mission-critical. This year, as the ambitions and forecasts of many companies fade, and goals spin, that term rings hollow. Value is now carefully measured against changing business goals. As a seller of mid-market technology, you might consider aggressive discounting, or cutting your own costs to the bone. In the long run, however, these approaches can lock a mid-market company, whose brand is less well established than a larger enterprise, into a race to the bottom. In the best of times, it takes a lot to save accounts that are at risk of turning over. When the risk is widespread, and customer emotions run high both personally and organizationally, it takes much more. This article discusses three strategies that will help you save your accounts. When executed with a spirit of partnership and empathy, a lot of hard work, and a little improvisation, mid-market tech vendors can love more of the customers on whom their future growth depends.
In just the first four months of 2023, high-profile technology brands laid off nearly 170,000 employees. Well, the next cohort in line for the shock of the downturn are the B2B technology vendors whose products and services keep those high-profile tech brands running. Contracts are up for renewal, and renewal decisions will be heavily scrutinized. It’s going to be a bumpy ride, especially for mid-market companies whose pockets aren’t as deep as their entrepreneurs.
When times are right, many B2B products are considered mission-critical. This year, as the ambitions and forecasts of many companies recede, and their goals turn, that term rings hollow. Value is now carefully measured against changing business goals.
As a SaaS vendor, you might consider aggressive discounting, or cutting your own costs to the bone. In the long run, however, these approaches can lock a mid-market company, whose market is less established, into a race to the bottom. In my experience as CEO of ChurnZero, which helps subscription companies grow by keeping their customers, the right approach for mid-market sellers is to become “stickier” by working with customers to realize the value they need are and to solve the new challenges they face.
In the best of times, it takes a lot to save accounts that are at risk of turning over. When the risk is widespread, and customer emotions run high both personally and organizationally, it takes much more.
These three strategies will help you save your accounts. When carried out with a spirit of partnership and empathy, a lot of hard work, and a little improvisation, you can love more of the customers on whom your future growth depends.
Be your customers’ coach as their goals change
I spent the (horrible) weekend of the Silicon Valley Bank (SVB) bankrun thinking about a mitigation plan for our customers who used SVB. We would have to assume that they had no money, and that their organizational goals had changed to mere survival. How would we work with them to help them stay afloat?
Unlike a bank run, the shock of a recession occurs over months, but it is just as likely to change the goals your customers had when they signed with you. It is essential to understand those changes and partner with your customers as they adapt. That starts with your customer-oriented people asking one question: How has the economy affected your goals, and have any of your goals changed? Outside of a recession, when everyone has resources, it’s not a question people ask. Today it is the key to saving many accounts.
For example: say you have a client whose initial goal was to expand their own client accounts. However, if you ask the question above, you will discover that their new goal is to save money and be more efficient. That’s your cue to help them adjust. Can you provide them value from another part of your product? Do you have automation or AI capabilities that can save them time and money? If your automation and AI can save 20% of their time, you can take away one fifth of their busy work.
As a mid-market seller facing the same headwinds as your customers, you’ll often find that their new challenges and priorities mirror your own. Use this vantage point. You’re already looking for “better, faster, cheaper” in your own operations, so apply the same perspective to your customers’ needs. Lead with product features that offer speed, efficiency and scale, and prepare to accelerate your customers’ adoption of them through digital education or one-on-one coaching to make the customer self-sufficient in their use of your products as quickly if you can.
Address Underutilization Before Your Customers Do
According to G2, 30% of business software subscriptions are idle or underutilized. Outside of a downturn, that’s embarrassing, but largely harmless. Now, however, these errors feel bigger and harder for your customers, and currently they are hunting every non-essential software application.
For your relaxed customers, you need to get to them before they act, with your own plan of action. These customers may be unhappy, but everyone appreciates a salesperson who steps up to offer a solution.
Make sure your customer-facing team brings empathy to every customer call. Treat these meetings as second discovery conversations. Look to understand the concerns of your end-users and the concerns of their organizations. Listen carefully, read between the lines and ask follow-up questions before proposing the solution.
The right solution will be different for each customer, but you can predict what they might need by paying attention to your product usage data. A well-suited customer who is six weeks behind on product adoption can, for example, be brought back on track with additional onboarding or digital education. However, an account that is six months behind may require additional services or a discount to save the relationship. In a downturn, holes like this are bigger and harder to crawl out of.
Partner with your end users to influence renewal decisions
Even if your product is well adopted and provides value, renewals become more uncertain in a downturn because each purchase is scrutinized more heavily. This year, your customers’ controllers, CFOs, and even CEOs may need to approve contracts—which means your end users need to get better at communicating your value to the decision makers. You can help her in two ways.
The first is through relationships and reporting. Your customer-facing people should map the tree of decision makers in your customer’s business, and work with your end user to engage and influence them. Get hands-on setup and customize your customer reporting to communicate full value. Coach your end users on the tough questions their leaders will ask—and offer to participate in those meetings.
Second, revisit your product roadmap until the end of this year. If you can accelerate any improvements that add value to leaders and decision makers, now is the time. If your product is tied to revenue, for example, can you create a custom dashboard for CFOs? If your​​​​​​​​​​product is for customer success teams, but new business opportunities are popping up sporadically, can you build a CRM integration that keeps you top-of-mind with your customer’s head of sales?
Build these enhancements to work with the platforms that decision makers use on a daily basis. The average company uses 88 apps and I, for one, want to log in as few as possible.
Where should you start? Focus on your best-fit customers.
The customer engagements I’ve described above require significant time and resources, especially for mid-market salespeople who are already salaried. If your product usage data indicates need across your entire customer base, focus first and foremost on your best fit customers.
Cross-reference your historical and real-time data. What industries, or sizes of companies, tend to reach the most with your product? Which cohorts are hardest hit by the current environment? Update your customer health scores accordingly and go where the data points you. While it’s tempting to spread your resources evenly, it’s more effective to focus on the customers most likely to succeed.
Once you’ve identified them, don’t wait to put your plan into action. The longer you delay, the harder your accounts will be to save. Conversely, the sooner you act, the better. If you​​​​get to these situations before your customers do – especially if you have noticed the problem before they have – you transcend the sales relationship to become a partner, one that your customers can go the extra mile to saving
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