In today’s market, organizations need to be able to do more with less. Why? To continue to drive results while reducing costs.
Revenue leaders are under tremendous pressure to deliver compelling outcomes, with an increasing demand for greater efficiency and agility. Smart, forward-thinking go-to-market (GTM) plans must be put into place — then periodically assessed for effectiveness and potential improvement opportunities.
Mark Schopmeyer, CaptivateIQ’s Co-CEO and Co-Founder, sat down with a couple of revenue leaders from Fullstory and Alexander Group to learn how they’re evaluating organizational productivity across the company to identify specific opportunities for optimization.
So how are these leaders approaching GTM transformation? The entire conversation can be found here.
Below are some highlights of what Kelly Robinson Rue (Director, Alexander Group) and Jamie Garverick (CRO, Fullstory) discussed with Mark — a TL;DW, if you will.
How are changing marketing conditions transforming go-to-market plans?
“Markets feel like they are on edge,” shared Mark. And this feeling will continue as we move through 2023.
Jamie discussed how rising interest rates could hurt software-as-a-service (SaaS) companies; specifically, growth rates slow and customer churn increases. In addition, since cash is now more expensive, more organizations are conserving it (naturally).
Many companies are trying to manage OpEx — especially privately-held and VC-backed cloud software. There was a model that was ‘growth at all costs,’ and those growth models would often burn cash, which today is more expensive to go by. Companies are now trying to conserve. — Jamie Garverick, CRO, Fullstory
Jamie suggested a strong, clear focus on efficiency and value. This means “growing responsibly to reach profitability and retain/expand existing customers.”
Kelly agreed with the “proceed with caution” mentality but added the importance of ensuring any changes to the GTM plan are approached with long-term growth in mind, along with a “mindset toward profitable growth.” She sees leaders taking advantage of the current market to reevaluate the current state of the business, asking questions like, “Is our past growth trajectory feasible as we move into the next decade?”
How long will this downturn last? What signals will indicate changing times?
Kelly and Jamie led with the standard “we are not economists” disclaimer, but Jamie reminded us that the current situation — inflation with low unemployment — is unique.
We will know we are moving out of this downturn when the Fed stops raising — and shows signs of lowering — interest rates. Once interest rates lower, private equity VC-backed companies will look to invest more in their industry, and hiring will pick up again for the next growth cycle. — Jamie Garverick, CRO, Fullstory
Jamie discussed how we might never see 0% interest rates again, recalling how different the last downturn (in 2008) was compared to where we are today. The 2008 recession was tied to the subprime mortgage collapse and led to cascading financial impacts. As a result, unemployment in 2010 was close to 10%.
Today, we are trying to curb inflation, with unemployment numbers closer to 3%. And it’s impacting SaaS companies, as we all know, with the recent layoffs. But Jamie believes this “reset” is a healthy part of the economy.
We can learn a lot more during the downtimes by “forcing a rethink” of all aspects of your organization. Those who “fix” and move into a better position will emerge stronger.
Jamie also reminded us about the good that came out of 2008-2010: Uber, Slack, Airbnb, Qualtrics, WhatsApp, Square, etc.
Have you seen a shift toward improving operational efficiency?
Kelly has seen the most significant shift in companies focusing on efficient, profitable, and long-term growth.
This means maintaining — and expanding — current customers (which, in most cases, costs less than acquiring new logos). She’s also had more customers ask her for market benchmarking and insights: How does our business compare to our peers?
Business leaders are now more interested in what their competitors are doing, what the market is doing, how they stack up against competitors, and so on. — Kelly Robinson Rue, Director, Alexander Group
Jamie noted that a greater emphasis is now being placed on the value that can be delivered to customers. He invented a new acronym to motivate his team and keep them focused: AVE. This stands for Alignment, Value, and Efficiency.
- Alignment internally (employees) and externally (customers); key metrics; incentive and commission plans.
- Value: deliver customer's promised value.
- Efficiency: invest money efficiently — resources, software, and so on — with a much bigger focus on ROI.
Kelly agreed, acknowledging that in just one short year, there has been a considerable shift in prioritization and an appetite for change.
“We are attempting to reduce software OpEx. We see this as an opportunity to consolidate.” But, Jamie clarified, this doesn’t mean his organization no longer purchases technology — far from it.
He and his team are continuing to upgrade their tech stack to boost productivity and efficiency. However, he is only looking at tech with hard dollar ROI, with a fast time to value.
What are “must-have” tools for go-to-market teams?
Jamie again stated the need for ROI with a fast time to value but added the need for purchased technology to be proven before signing up.
“And you must have a reliable CRM as your foundation,” stated Jamie. The handful of sales tech Jamie relies on?
Gong for revenue intelligence. Clari for sales forecasting and opportunity management. CaptivateIQ for sales commission management.
Kelly agreed, especially with sales commission management software:
When teams don’t have a platform like CaptivateIQ, they waste so much time. It’s inefficient.
With the help of some new software and an honest look at the technology stack, GTM leaders can ensure things are running as smoothly as possible and shift their focus to providing excellent service to customers. AVE.
What should leaders consider about sales commission management software (and commission plans overall)?
Kelly said sales compensation plans must be tied to correct behaviors — yet still aligned with business strategy.
However, as a company evolves, sometimes plans get left behind.
It’s imperative sellers directly impact behaviors they are being measured on.
When reviewing compensation plans, Jamie said to prioritize customer retention, then drill into the leading behaviors that drive customer retention.
Jamie also believes multi-year agreements (tied to compensation plans) and auto-renewals (less work for customer and seller) is critical. But just be sure to keep plans manageable. Keep it simple.
What is the best way to approach the next few months?
Kelly had some sage advice:
Do not over-rotate in this market. Continue to think about the long-term trajectory and check the things that may have gone unchecked during the booming economy. Companies should maintain good hygiene but be a little more diligent about things like overlap in your tech stack and other areas in which you might be investing. We see our clients have inefficiencies, for example, in the sales compensation payouts. You might overlap in sales compensation plans or have sellers double-dipping or not driving the right behaviors.
Kelly continued that there’s an increased focus on sales productivity. Are people operating at the level that you expect? Are we efficient in our span of control? Do we have the right coaching and mentoring resources?
Ultimately, it comes down to ensuring that you maintain good business hygiene and adopt best practices that you would typically want to be on top of.
According to Mark and Jamie, the theme of fast time to value and accountability is also top of mind.
Jamie reiterated the importance of value-selling. Ensure the seller and customer have created a collaborative business case. Be sure you are talking to the “right” people. Remember: the ability to approve/spend money goes up a level in a downturn.
Listen to the entire conversation for more insights.