The COVID-19 pandemic has had a widespread impact on the very nature of business; organizations went virtual, sales activities turned remote and firms ramped-up their efforts to digitalize parts of their offerings. While offline-retail, restaurants and hotels struggled to adapt, the tech sector prospered; e-commerce, cloud services, online grocery and streaming services all surged under staying-at-home-orders. Zoom, the cloud-based video conferencing platform, went from ten to two-hundred million daily users in three months, all while global air traffic shrank 85 percent compared to last year. Although the examples above represent outliers, we have all been affected to some degree. Many firms took quick decisive action to get a grip on the uncertain situation and adapted their organizations for the “here and now”. But as the immediate impact of COVID-19 has struck, and the dust starts to settle, companies must begin to look ahead. What should business leaders do next? When should executives shift from crisis mode to more strategic management? How should efforts required to ride out the storm be balanced with moves to position the organization for the future?
In this article, we share our view on key activities and success factors for managing in, as well as through, the crisis.
There is a high degree of uncertainty of what lies ahead for business in the face of COVID-19. Scenarios range from a rapid bounce back to more prolonged, severe and widespread problems. As we have seen, The US stock market fully recovered from its initial downturn this spring and, a bit surprisingly, struck an all-time high.
Not all countries, industries and companies have been, or will be, impacted the same way. Nevertheless, for most sales and marketing executives we foresee a need for similar lines of action with three horizons in mind – getting a grip, adapting for the short term and repositioning for the future.
Based on this, our research and experience on drivers of commercial excellence, as well as learnings from previous economic downturns, we have summarized what we suggest are key activities and success factors in a crisis management framework (click to enlarge):
Horizon 1 - Getting a grip
For many sales and marketing organizations, the first tangible impact of COVID-19 was a sudden stop in the ability to access customer decision-makers – even more so in opportunities with potential new customers. Paired with the general uncertainty of how things would develop, many executives experienced a negative impact on the morale in their teams.
Additionally, the meeting cadence in most organizations was not fast enough for a highly uncertain and rapidly evolving environment. In short, executives needed to act quickly to get on top of the situation - including:
- Ensuring the safety of employees
- Reaching out to the CEO and CFO
- Assembling a team to lead through the crisis
- Setting up more frequent meeting cadence
- Freezing non-essential spend (e.g. events)
- Assessing the validity of the revenue forecast
- Defining likely scenarios and related responses
- Adapting the strategy and revenue plan (for the near term)
- Developing a plan for communicating with key stakeholders
- Reassuring members of sales and marketing teams
- Connecting with customers, channel partners and other key external stakeholders (to display strength, availability and partnership)
Horizon 2 - Adapting to weather the storm (short term)
In an article this spring, we summarized what we learned from speaking to more than 30 sales and marketing leaders in our network on how the outbreak had impacted their businesses. Most took decisive swift action to get on top of the situation and adapted their organizations for the “here and now”. Many described short-term adaptations as being their main focus at that time. To protect revenue streams, customer relationships and other key assets in the midst of the crisis, they were:
- Redeploying sales capacity (towards relevant market segments, current customers rather than prospects, later stage opportunities etc)
- Allocating top talent to priority customers and opportunities
- Aligning sales quotas, incentives and compensation plans
- Adapting offerings, value propositions and marketing content
- Ensuring that information in digital channels is easily accessible
- Providing sales teams with tools to sell effectively from a
distance (and training them to excel in remote interactions)
- Investing in relationships with key customers and in finding prospects for the future
- Preparing for making additional costs cuts (if / when needed)
It is obvious that being able to meet and collaborate effectively when geographically dispersed has quickly become more important than before - both internally as well as with customers and prospects. No surprise then that many we spoke to have focused on strengthening the ability of their people in this area. As seen, organizations responded with adaptability; most offices turned virtual and remote as employees worked from their living room. As a consequence, Zoom’s daily user base grew from 10 million people to 200 million in three months. Some are also using the momentum from having to adapt to the short term to accelerate the shift towards more digitally enabled marketing and sales motions (e.g. through doubling down on marketing automation, e-commerce and social selling initiatives). This could also be the time to launch scaled down and less expensive versions of offerings as well as revenue models based on subscription, usage or success.
In times of crisis it can be difficult to resist pressure from customers to lower prices. To the extent possible this should however be avoided - especially indiscriminate changes to list prices or other widespread adaptations that impact the entire revenue base. Payments terms, warranties, trial periods and other concessions that are not directly connected to prices can used as alternatives to meet customer needs.
Either way, a key success factor here is being able to refocus activities, people and ways of working as the situation evolves towards (e.g. to high value and low risk customers, the most important sales opportunities etc). Key customers is the starting point for most - both to safeguard revenues in the short term as well as to solidify relationships for the future.
Some that we spoke to describe it now being easier to access key customer stakeholders. This may sound paradoxical, but for some executives the crisis has freed up time and as a result they are more available. Additionally, external uncertainties typically increase the level of perceived risk associated with investment decisions - in ProSales research described as “buying complexity” - providing opportunities for well positioned vendors to enter earlier in, frame and guide customers along their buying processes.
3. Repositioning for the future
Lessons from previous economic downturns are clear – post-crisis winners moved earlier to position themselves for the future. As the initial opportunity for immediate firefighting has passed, what sales and marketing leaders do next will be crucial for their position post-crisis. Leaders need to take the time to redefine how the future will look after the dust has settled. Will customer needs have changed? Will they buy in different ways and through different channels? What will the competitive landscape look like? It is a mistake to assume that the same conditions from which the pre-crisis strategy was developed will still be valid.
New decisions will need to be made regarding which markets, customer segments, offerings and channels to focus on. Based on that, executives can define what the go-to-market model should look like in the future and then ramp up efforts to make them winners “after the storm”. Not only does this require financial strength but also that enough attention has been paid to the first two horizons (Getting a grip and Adapt). Those that have earned the right should start to accelerate preparations for “life after the storm” - including:
- Mapping trends,, revenue potential, customer, buying behaviors etc in the post-crisis market
- Redefining go-to-market strategies (including which combinations of offerings, market segments, customers and channels to focus on)
- Reassessing the structure and size of the organization
- Redefining processes and ways of working
- Assessing which digital sales and marketing tools to invest in
- Reprioritizing the project portfolio
- Identifying and starting to fill talent gaps (e.g. upskilling existing staff as well as recruiting for needs of the post-crisis environment)
Whereas shifting focus from the first to the second horizon, which typically is a sequential shift, repositioning for the upswing needs to be done in parallel with adaptations “here and now”. Despite limitations and uncertainties - success in balancing this tradeoff is one of the most important factors when managing in and through the crisis.
To help firms succeed in the future of a New Normal, ProSales has developed ”COVID-19 Response Diagnostics” - an effective tool to quickly and with precision assess your starting point, define what moves to make and decide on a direction. Click to enlarge.
In this article, we have discussed how sales and marketing executives should manage their organizations in, and through, the crisis. In summary, we recommend balancing actions across three horizons - getting a grip, adapting to weather the storm and taking steps to reposition the organization for success in the future.
Joakim Rönnblom, ProSales Consulting