Performance Engineering Series: Mastering Financial Fundamentals
This Resilience Fundamentals series for startups post focuses on how to build a clear financial view of your business, revenue, and spending.
The fourth article in thePerformance Engineering for Startups series focuses on marketing and sales fundamentals.
History shows a measurable long-term performance delta between companies that maintain marketing and sales efforts and those that 'press pause' during challenging economic markets. Specifically, companies that continued to invest in marketing and sales experienced greater resilience coming out of the down market. These companies balanced costs and cash flow and recalibrated as the marketplace improved or worsened.
The reasoning for this competitive outcome is relatively intuitive. When times are tight, and other companies pull back on efforts to generate awareness, engagement, conversion, and sales, you have an opportunity.If you're strategic with where the expenditure goes (e.g., strategies, resources, advertisements, and people), you may have an easier time standing out as the brand people know and will buy from. They have fewer options, and there's less noise.
With slower buying cycles, there is also more space to think and strategize your marketing and sales strategy. More importantly, you will start to see your target buyers' priorities more clearly, as those companies dial back spending and only focus on buying products and services that are proven to deliver value. That's not to say that you should put too much stake in inbound. But rather than cutting off the spending altogether in hopes that ‘they will come,' determine where you will reduce, maintain, and increase marketing spend.
Presuming you have built your ICP and target market profiles and the value propositions that are most likely to resonate with them, you are well prepared to create a doable plan. And the good news is, just as with the financial and growth exercises, this work does not need to involve outside consultants or hefty spending. With a few hours and the tools below, you can transform your brand platform and methods of deepening relationships with your existing customers and prospective ICPs and target buyers into a high-performing machine.
Your brand represents your company, products, and services.It is a statement about who you are, what you do, why, and for whom. But as significant as your brand is to you, it can be diminished by the noisy, competitive environment. During economic downturns, when many companies view marketing efforts as ‘nice-to-have' line items that can be paused or cut from the budget, it's less noisy. Fewer competitors are actively vying for attention. If your brand identity is dialed in and everyone in your organization is aligned and orchestrated, you are better positioned to emerge from the downswing well-known and resonant.
Carefully assess your brand because it is the foundation and standard that will ensure your company, platform, product, or service resonates with the right customers at the right time(s) and in the right environments.
This can be a sweeping effort, but it doesn't have to be.The fundamentals of a strong brand foundation that you can use for crisp, consistent messaging are straightforward.
Put time and effort into strengthening relationships with existing customers because they can be the fastest way to lose revenue and the fastest way to expand it. As noted in the Growth Fundamentals article, retaining a customer can be five times more cost-effective than having to win a new one. What's more, if you can increase customer retention by5%, it's possible to increase profits, at a minimum, by 25%.
If you haven't done the exercises to understand who your best customers are, why they are your best customers, and what value drivers resonate with them, pause now. Read the GrowthFundamentals article and spend some time with the tools provided.It will make this effort more targeted and successful and keep you from wasting a lot of marketing dollars and time.
When your customers operate with less budget, it's vital to be crisp about the problems you are solving right now.Remember that the answer to that question may evolve more in a challenging economic climate than in a stable one. Pay careful attention to your customer's challenges and how those challenges are changing so you can evolve your marketing and sales efforts in line.
Particularly if you cannot have direct conversations with your customers, people like your CSMs (Customer Success Managers) and SDRs(Sales Development Reps) will be your most valuable portal into this insight.
While it's valuable to dial in your brand and make sure you're presenting it properly, it's equally important to ask the right people on your team to present it to people who are most likely to care. Make sure you have a plan to have the right people on the front lines. Your ultimate dream team should include the following:
While a fully-built org chart might not be possible, strive to at least have representation and planning across all three of these revenue channels.
Even if your pipeline slows, it's unlikely that it will stop. And it won't wait. When customers are ready to buy, you must be prepared to provide. When you started your business, hitting your targets required that marketing and sales hires were two of your priorities. As you're keeping your business going, it's just as important to keep those hires on board and focused on hitting realistic KPIs.
Your team should not only know how to manage the tactical efforts (e.g., running campaigns, building social, and maintaining assets), but they are also your communicators, customer correspondents, conversion experts, community builders, and brand advocates. Whether they are focused on nurturing your customers to avoid churn or getting more of the right kind of customers(i.e., ICPs) in the door, these are the leaders of your frontline force.
They will know what services and products are resonating, and why. They will understand how the brand is perceived in the marketplace and how to use your greatest ambassadors to sing your praises. They also will know what the hurdles to buying look like and the objections that people have to your offerings, pricing, and presentation, so you can keep honing your product market fit even after the economic environment evens out.