The global COVID-19 pandemic combines the life-altering scale of natural disaster and the severe disruption of sudden, sharp economic downturn in a single event. For revenue leaders, the challenges are particularly acute. As in any economic downturn, effectively managing the business requires intense focus on top- and bottom-line results. However, the ability to drive these outcomes is diminished due to social distancing and abundant economic uncertainty. In consultation with many of our clients, Alexander Group (AGI) has assembled a list of actions for tech revenue leaders of marketing, sales and service functions. This list will undoubtedly evolve and grow as the crisis endures.
AGI conducted a survey of revenue leaders across industries to gauge responses to the pandemic. Over 25% of the respondents (60+ companies) were from the tech industry. 70% of those respondents tell us that they’ve shifted all commercial activity exclusively to phone. We expect this number to rise as more states and municipalities mandate social distancing for all non-essential personnel. As such, revenue teams must be able to perform their functions digitally.
Sales managers should ensure that field sellers have the ability and access to tools required to work remotely. Tools include:
AGI recommends that sellers be reimbursed for any approved digital enablement technology they do not currently possess.
Field sales managers should adopt management techniques utilized by inside sales to improve productivity and share best practices.
According to our COVID-19 survey, 41% of tech companies are forecasting at least a 6% reduction in YOY revenue. 53% tell us the impact will be negative, but cannot quantify it yet. During times of severe economic disruption, our clients often ask us which levers they should consider pulling to be responsible fiscal stewards without risking the livelihoods of their employees and emerging from the downturn flatfooted and under-deployed. 70% of tech respondents indicate they are keeping staffing at current levels; however, 62% say they are curtailing or considering curtailing new hiring. Meanwhile, just over 50% of our respondents say they’re considering quota relief and/or compensation guarantees for sales people.
Adjustments to sales compensation and quota should be aligned to organizational compensation philosophy. The most common actions we see (with the underlying compensation philosophy in parentheses), appear below.
In normal times, a robust customer success function builds strong, vibrant user communities, secures renewals and creates a platform for upsell/cross-sell expansion. In disruptive times, customer success is on the front lines of preserving revenue and mitigating churn. In a recent AGI survey, approximately 80% of tech companies told us they had invested or were investing in a customer success function. Whether your organization has formalized the function or has other post-sales resources (renewal reps, account managers, customer service), it is vital that companies protect existing revenue streams now.
Tech companies should utilize and supplement customer success resources to identify and mitigate potential revenue churn risks in the existing business. We have captured some of the actions we believe to be best practices below:
AGI will provide more information as this situation develops. We are available to answer any questions or provide additional insight on how organizations are managing through and eventually, out of this crisis. Please contact us.