3 Lessons for COVID-19 Selling from Andreessen Horowitz
There’s no sugar-coating it – times are lean for sales operations at technology companies. Half of all B2B companies have slashed their budgets by more than two-fifths, mass layoffs, and reduced IT spend have rattled our industry. Virtual selling and an uncertain market are twin challenges for tech sales teams, according to a new report about the COVID-19 selling landscape by Andreessen Horowitz.
But the authors also say that for B2B startups that survive, this period could be a boon. Downturns are when great shifts happen in market share. That means huge opportunities for companies that are placed – or can become so – to reap the rewards.
With information gleaned from CRos and founders, the firm is expecting a 30% drop in upfront cash, plus lower Total Contract Values, and a stagnant pipeline. “If you can do bottoms-up, product-led, inside sales selling or remote selling, now is probably the time to invest there,” author Martin Casado wrote.
1. Focus on Product-Market Fit
For startups, the firm recommends an emphasis on product-market fit with one caveat: Make sure that the behavior you’re using to evaluate is likely to continue as circumstances change. In other words, don’t build your whole strategy around how people are acting at this stage in the pandemic.
2. Scrub Your Pipeline
So you built that pipeline and we know you’re proud of it but the experts say you need to let it go. “Deals that were certain two months ago may have evaporated as budgets have been frozen or different signatory authorities are needed,” the authors said. They suggested sales teams qualify accounts by asking customers and prospects – even sure things – whether they still have budget.
3. Be Flexible With Subscription Customers
It’s August and our customers still aren’t paying! What do we do?
The report recommends “solving for long-term customer success” by being flexible and emphasizing customer loyalty. Remember: It’s easier to keep a customer than get a new one – especially in a downturn! The authors say they’re seeing cash deferrals of up to nine months for the hardest-hit sectors, and many companies offering flexible payment terms and professional services (rather than flexibility on price, which can be more damaging). “We recommend implementing a deal desk, usually in the form of a mailing list or a chain of sign-off for deals over a certain threshold, to maintain deal structure around incentives and discounts to prevent reps giving away too much,” the authors wrote.