PART 2: Never Waste a Crisis - How to Leverage your Sales Team in An Economic Downturn
Ensemble Advisor Spotlight: Brian Hagen, Head of Sales at Airtable
By: Collin West & Katalina Veal
If you missed part 1 of our 2-part Advisor Spotlight with Brian Hagen, be sure to check it out here. Brian shared a guide for evaluating sales talent and a framework for when and where to make changes to the team. In Part 2, Brian provides several risk management strategies and explains how to pivot a product's value proposition in periods of economic uncertainty.
Don’t Over-Index on Headwinds - You’ll Miss the Tailwinds
Does letting people go hurt the company’s culture?
Letting people go is always difficult, but if you have the right management team in place and a consistent process for performance management - you can maintain a strong culture. I love the way Jim Collin’s characterizes this in his book ‘Good to Great’ - first who, then what.
First, you must have the right people on the bus - which sometimes means getting the wrong people off the bus. Top talent recognizes who isn’t carrying their weight. If under-performers stay on too long, they can ultimately have a negative effect on the culture. Getting the right people off the bus will actually be motivating for others. Make a plan to keep your “A” players on the bus; they want to – and will - step up. Equally important, make sure you manage the right people out of the organization.
What are some mistakes that founders may make during a downturn?
The old adage, “Never waste a good crisis!” comes to mind. One of the biggest mistakes is over-indexing on the headwinds created by the downturn, and as a result, not taking advantage of potential tailwinds. Don't panic. Resist the urge to fight against those headwinds and step back to see what new opportunities exist. Whenever there are big changes, there are both new problems as well as new opportunities - you must look for both. For example, your sales team may suddenly start screaming, “It’s getting tough out there! Everyone is going with cheaper Competitor B. We’re going to lose every deal if we don’t do something!” Resist the urge to lower prices or offer deep discounts to be more competitive. It may work for a while, but what happens when your existing customer base finds out? Will your most loyal early customers feel like they have been overpaying? This may result in a loss of trust - and could damage your reputation. Plus, you will never get them back to the original price. Instead, offer incentives (waive fees, provide credits, additional months to create cost savings to keep those people on board) to your current customer base rather than use deep discounts and offers to acquire new customers.
Reposition Your Product’s Value Proposition
What opportunities may a founder want to consider?
The big opportunity in this climate is to find new ways to position your product’s UVP (unique value proposition) and then pivoting the sales strategy to focus on those opportunities. To make it very simple, consider the following. For any product that is being sold, the value driver is either that the product will:
Drive growth,
Reduce costs, or
Mitigate risk
Every product in its simplest form is doing one of these three things. So, if your value proposition today is driving growth, but your clients’ risk tolerance has gone down, then you may need to focus on how your product might reduce cost or mitigate new risks produced by the shifting climate. The new pitch is about positioning how you create value for the customer in the current environment. Listen to their concerns, and what has changed, and figure out where you can add value. Focus on the tailwinds that exist because the rules of the game change in a downturn. Don't be afraid to set the old playbook aside.
Can you give an example of how to reposition a product’s value proposition?
The fundamental value prop for Airtable is that our platform enables anyone, regardless of their technical ability, to build custom applications on top of shared data to keep teams aligned and doing their best work, together. So, in a high growth environment, we might focus our value messaging on how Airtable enables a content production team to work more efficiently and therefore, grow their business faster. For example, if your team creates and monetizes content, Airtable might help you create more content and drive more revenue.
It’s all about growth. In a downturn, perhaps your team now has had to reduce headcount - but still need to produce the same level of output. The value prop might shift to how Airtable can help your team work more efficiently while maintaining the same level of output efficiency. The value prop is no longer about growth - but risk mitigation - i.e. making sure that your team doesn’t get burned out and risk losing your best people.
Do you have a final word of wisdom for our founders out there, struggling with reducing risks in a downturn?
This is a tough sales environment. As a founder or leader, I recommend you use this time to get closer to your sales team. They have invaluable feedback that will help you better understand the new landscape so you can make wise decisions. In this environment, it’s going to take more work and more up-front research to get meetings with new customers. As a leader, you need to work with your team to re-prioritize the pipeline by weeding out struggling industries and thus narrowing your team’s focus.
The news (digital, trade journals, TV, radio etc.), is a treasure trove filled with companies talking about new initiatives and how they are responding to the downturn. That is gold to a salesperson because companies are literally broadcasting their top priorities and if you can attach yourself to them, you will find success. The salespeople that take initiative by committing to the upfront research instead of running with the old playbook, are the “high-will” sales people that will grow with the business over time (see part one for more info on how to identify “high-will” salespeople). As a founder, if you are hearing only about the headwinds, and you’re seeing the team throwing up their hands - it may be time to re-evaluate your value prop and/or seize the opportunity created by a strong talent market to get the right people on the bus.