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Go-To-Market Optimization During an Economic Downturn

During this time of uncertainty, many revenue leaders (even of “recession-proof businesses”) are finding their businesses to be affected by COVID-19 in ways they could not have anticipated. Considering most customer-facing representatives have a tenure of less than eight years – and thus have never sold during a recession – leaders are having to make difficult decisions, coach their teams and navigate unprecedented uncertainty. Gainsight’s survey of CXOs highlights the expected drop in gross revenue retention (GRR) that most companies believe they will experience – even more deeply if (1) their retention was already low, and (2) they are selling into SMBs.



Source: 12 Learnings From a Survey of SaaS CXOs by Nick Mehta, Gainsight

Rather than reinvent the wheel, we’re turning to revenue leaders who made it through the 2008 recession. Jackie Schneider was VP of Sales and Customer Service at Proto Labs during 2008, and helped take the company public four years later. Adam Feigenbaum was Chief Customer Officer at iCIMS, which remained profitable and strong through 2008 to date. Their summary recommendations:

Optimize resources   Focus on revenue retention and upsell to existing accounts
  Reallocate resources to existing customers, prioritize customers based on value
  Optimize marketing spend
  Eliminate underperforming investments (e.g. headcount, systems, processes)
Manage teams   Increase activity metrics
  Revisit quota/comp as applicable
  Refine sales training/coaching
  Retain, nurture, and selectively hire top talent
Clean the data   Update customer health monitoring
  Update contacts as people leave positions
  Identify advocates
Adjust your selling approach

  Focus on your value proposition
  Offer concessions selectively and thoughtfully
Assess your competitive landscape

  Analyze whether certain competitors more vulnerable
  Identify new threats from competitors that previously did not exist

A year after I (Jackie) joined Proto Labs (manufacturer of customer parts for prototyping and short-run production) as VP of Sales and Customer Service, we found ourselves in the 2008 recession. Even though the effect of the downturn was felt by virtually everyone in sales, we pulled through. We went through a major restructuring, but found success by incenting employees to our revised strategy: we compensated teams for winning business from new customer contacts within existing customers; we opened doors by leveraging our relationships and referencing successes with customer advocates; we redeployed a few customer service reps to look for additional opportunities by focusing on mid-size customer needs. Our success was integral in our preparation to go public as the economy recovered. I later joined Field Nation (online matching service for IT contractors and other freelancers) as CRO, where I implemented similar solutions.

I joined iCIMS (cloud recruiting platform with end-to-end talent acquisition platform) in 2001, just weeks before 9/11. Almost immediately, our fledgling start-up was faced with rather stark economic realities.  At that time, we did not have any brand, and only a handful of customers – so there was not much to lose!  We were privately funded and knew those dollars would soon dry up, so turning the business profitable became mission number one.  We needed to be extremely efficient in our operations and disciplined in our spend.  Those early lessons served us well during the Great Recession in 2008-2009 – then as a business at a greater scale.  Our answer again was focus – on what made us great, efficiency across all aspects of our operation.  It was our strategic precision on cutting spending intelligently that allowed us not only to manage financial targets, but also to increase certain investments that would eventually establish iCIMS as the market leader in our space.

Here are some lessons that you can apply today:



    Protect your foundation – AKA your customer base. This source of recurring revenue is your lifeblood. Do you have appropriate coverage to defend and grow your base? At iCIMS, we decreased emphasis on new customer acquisition and reallocated to existing customer growth. Most businesses aren’t excited about changing vendors during downturns, unless they are trying to drive down costs or secure better credit terms. Look at return on marketing/sales investment by channel for new customers – many investments likely no longer make sense.

  • “Right-size” your customer facing teams

    Identify key players and determine the coverage and workload required to retain and grow the existing business, as well as the investment and coverage needed to pursue new customers. If you have a Sales Development Representative (SDR) prospecting, consider having your Business Development Representatives (BDRs) do their own prospecting and qualification, then temporarily redeploy SDRs on initiatives that will help grow the existing customers. In addition, consider temporarily redeploying high-performing employees from roles not needed during this time to higher impact roles. When we did this at Field Nation and Proto Labs, we increased ROI on new logo acquisition and improved revenue retention and growth in existing customers, but also internally developed top talent.

    The results were similar at iCIMS, especially when the strategic redeployment of resources was based on the unique skill sets of the individuals involved. In our case, making blanket changes by moving SDRs to Account Management (AM) was unsuccessful. Human Resources became a critical partner. Our pre-existing performance review processes gave us insight into skill strengths so we had confidence in who could perform better in particular roles. Neglecting skillset in your temporary redeployment can lead to low morale and underperformance. Also, changing times created new opportunities for people to step-up – and they typically did!


    Prioritized metrics can include margin, revenue contribution, strategic value, monetary potential, and advocacy. Happy, vocal customers with tremendous success stories, that contribute less revenue can still be valuable assets. Such customers can serve as brand advocates and be activated into go-to-market assets with high ROI. Customer-facing roles should disproportionatly spend time and energy maintaining high-value and high-potential relationships.


    At Proto Labs, our marketing team worked in tandem with sales to create customized content (e.g. nurturing campaigns, educational content, and thought leadership that sales can leverage, etc. ) aligned with the needs of our prioritized, existing customer list. Our cohesive marketing and sales approach improved ROI: 70% of our revenue that year came from targeted account selling within existing accounts. While half of our competitors went under, we experienced slight growth.

    At iCIMS, doubling down on customer marketing efforts during the downturn led to net-revenue retention between 110-115% during the recovery We were able to manage costs efficiently by leveraging our partner ecosystem. As a result, we built a great program for customers and approached reductions in prospect-focused spend with a precise scalpel (vs. an axe).


    Micromanage the remaining budget. At Proto Labs, we analyzed spend by need-to-have versus nice-to-have. We eliminated the latter, which for us included travel expenses, prospecting tools, PPC, direct mail, tradeshows, and more. We focused investment in existing customers, via tools more impactful for AMs. As CRO at Field Nation, we cut back on consultants, PR, events, and demand generation content – but increased digital spend.




    Any selling organization needs to have the confidence that they can win. When goals and compensation are misaligned with market opportunity, you create a negative climate where pessimism will prevail. Consider adjusting quotas on a monthly or quarterly basis; dynamically adjust new quotas (up or down) based on current trends.

    Determine the amount of variable pay that you are willing to spend for the remainder of the year. Outline the desired behaviors and create commission plan motivating those behaviors.

    When changing commission mid-year, communication is essential: communicate not only the specifics, but also you are changing the plan. Don’t assume the reps will understand the reasoning for creating a new plan nor the impact on the business. Encourage reps to submit questions, then provide written responses to the entire team. Transparency builds trust and reduces rumors.

  • Maintain or increase expectations for sales activity metrics that are within representatives’ control

    Activities such as phone calls, emails, and connects are within a sales representative’s control. While the messaging should likely change (especially if your customers are in industries affected by the crisis or downturn), the extent of outreach does not have to be in tandem. When thinking about these activity metrics, emphasize messaging with clear, appropriate value to the intended prospect/customer. More activity does not necessarily lead to more results.

    Other metric expectations such as pipeline, conversion rates, and new customer counts should be adjusted based on current trends. It’s important to keep sales activity strong during this time, or else you can be quite certain of lower results. Because we increased these expectations at Proto Labs, we significantly increased Account Manager (AM) productivity and maintained sales velocity to the best extent possible.


    Customers will behave differently and make unusual requests during this time. Sales representatives should be uniformly trained on how to handle discounts, RFPs, competitive threats, and requests for credit terms. Arm your team with consistent responses delivered with confidence. Specifically, regarding concessions, sales reps should be given guidelines on what they can and cannot offer along with your reasoning (more on this below – “Instead of blanket discounting, leverage alternative concessions”).


    Over-communicate how things are going and be sure to celebrate successes. This economic environment is unsettling for employees. Being transparent about how the company is addressing the situation, even if you are making tough decisions, reduces employee fear because they know you have a plan. Positive reinforcement encourages the right behaviours gives reps the confidence and motivation to execute.

  • Focus on performance management and selectively hire top performers

    What? Adding talent in a downturn? Yes! A key to coming out of a downturn while thriving is efficiency. Some companies have laid off the majority of their teams, others are struggling, and top sellers are on the market. Make room for new top talent via aggressively managing performance on your own team. Move quickly and decisively on low performers.



  • Determine metrics that allow you to monitor your customers’ health

    If you don’t do this already, this is essential to mitigating risk to your company, as well as ensuring your customer success managers and/or account managers are focusing on the “right” customers. For Proto Labs, our metrics included:

    Receivables/days outstanding (DSO) Increase (e.g. 90 days past due)
    Put accounts on credit hold to collect payment before processing additional orders
    Credit lines Increased utilization Use to inform updated segments and concession negotiations
    Customer’s financial performance Decrease Be proactive about talking to customers about their financial health
    Employer churn Increase Track new contacts
    Overall product usage Decrease CSMs should reach out and teach how to use stickiest product features – ensure customer is seeing value

    For a more comprehensive list on health scoring, refer to our Growth Hack, Boosting Revenue Growth By Scaling Customer Success.

    In SaaS environments, “customer health” can have different definitions. In iCIMS’s world, we supported recruitment within corporations, so we saw the impact of downturns immediately. Fewer jobs were being posted; fewer recruiters were accessing the system. We knew which customers were being impacted before they told us, so we took proactive steps to engage customers and offer assistance. Bringing these discussions to the surface, led to positive outcomes for the customer and iCIMS. We were able to control terms of negotiation by getting ahead of the issue. Customers saw us as a valued strategic partner that understood and cared for their business.

  • Ensure sales representatives identify and update CRM with contacts

    As your high-value customers and potential customers go through layoffs, make sure contacts are updated for whoever is taking over the prior contacts’ responsibilities. Sales representatives should use this time to start building and nurturing relationships with the new contacts, updating them on your offerings and most importantly communicating the value you provide to their organization. Any buyer that has left is also now a potential advocate – help them find their next opportunity and bring you with them (see “leverage customer advocacy” below).


    As the economy loosens up, watch for certain trends that act as harbingers of recovery: projects coming off hold, competitive intervention lessening (reduced RFPs), a willingness by customers to pay premiums, etc. When we noticed sales reps activities start to drop yet our win rate started to improve, we began hiring. When we started to see the number of leads pick up, we started to reinvest in new logo sales roles and increased our marketing spend.




    Focus on what makes you different from your competitors, and how your offering directly adds value to your customers. Quantify that value. At Proto Labs, we differentiated our value proposition on time-to-value (called “quick turn,” or QT). During the downturn, smaller competitors bought business in an effort to keep the lights on. Engineers relied on our unique value via QT as well as our ability to consistently fulfill our delivery dates. If an engineer worked with a company that was not around post-downturn, there was risk they would need to start their project over, adding to delays and added expense. In addition, we focused on our ability to provide “design for manufacturability feedback” through our quotes and our sales engineering team to help shorten our customer’s time-to-value.


    Avoid blanket discounting and instead find alternative ways you can provide your value to your customer while protecting your margins. A default to blanket discounts or over-granting of concessions can anchor your customers and prospects to a low price point, or worse, a focus on price over value.

    Consider using a formal concession matrix (see below), which provides a framework for which concessions to offer first, with quadrants that inform how reps should negotiate concession offerings with which customers. Offer an initial concession that is lower value to both you and the customer, then, as needed offer a secondary concession that is higher value to the customer, but lower value to you (e.g. extra training, support). Finally, for high-value customers that keep pushing, offer a concession with higher value to both the customer and you (e.g. deferral of payments term or x month loyalty credit) – but then stop conceding.

    Source: Defensive Pricing by Eddie Hartman and Serene Papenfuss

    At Proto Labs, we segmented our market and provided “concession offering” guidelines to direct customer-facing teams in how they should approach concessions. As a result, we maintained similar margins compared to pre-downturn. While it is okay to offer concessions in some cases (assuming it is offered methodically, selectively, and post-negotiation), be mindful of the effects of any concession: unless it is executed effectively, your company will feel the adverse effects even after the economy is in recovery. You may have a disgruntled or confused customer when you try to boost net retention via price down the road.

    Manage negotiations to drive contracts you will be proud of over time and not just in the moment. Discounts can attract customers that value you for the discount vs. your desired value propositions. This misalignment can be devastating, as the balance of expectations have now changed. At iCIMS, this meant a class of customers that balked at buying future services or buying products at market rates, and ultimately negatively impacted logo retention. For a period, this misalignment resulted in business disruption and lower employee morale at iCIMS. Why? Employees began to lose confidence in our value proposition and differentiation. All those values were still there in spades! However, they were not understood the same way by specific segments of our customer base that we started to attract via discounts.

    Discounts can create false narratives that eventually have genuine effects on operations. Discounts are not inherently bad! But, lack of pricing integrity or inability to target the right price to your ideal customer profile can compromise your ability to follow your strategic north star.


  • Leverage advocacy within the customer base

    Advocates are buyers or power users that will actively recommend and sponsor your product at their organizations.

    Through advocates, you reduce marketing spend and foster a community of support. At Proto Labs, because of our focus on our existing customer base, we leveraged strong contacts in our larger organizations to navigate the account and understand where there was potential business. We used these contacts’ testimonials and success stories to open doors; we created customized content around the organization’s ROI from our solution to communicate advocacy. During the recession, nearly all revenue growth came from these activities.

    Our advocate pool was essential to our growth at iCIMS. Advocate events helped drive product utilization, foster a community that placed us as an industry thought leader, and introduce prospects and customers in a way that drove new business. Advocates leveraged correctly can be the gift that keeps giving: they can be a great source of new business, especially as people change jobs in a recessionary environment. Keep close to buyers and users – they can become your next customer.



  • Are there new opportunities now available?

    A downturn has a way of leveling the playing field that can allow the strongest products and services – most capable of demonstrating value – to stand out. During the Great Recession, funding dried up for a lot of iCIMS’s competitors. They were forced to learn efficiency under harsh economic conditions, with added pressure from investors expecting their return within their investment window.

    Companies slow to change were rampant in our space, resulting in mass layoffs, companies going out of business, leadership changes, and increased M&A activity. Running profitably and without excessive debt, we were able to use the downturn to attack the market in new ways. We targeted the customer bases of vulnerable competitors and were able to lure those businesses to iCIMS – not through promotions, but through our message of differentiation at a time that they were ready to listen.

  • Are there new threats that didn’t previously exist?

    Fading competitors will not go quietly. You will see desperate acts, so it is important to arm your team with rebuttals. At iCIMS during the most recent downturn, a competitor ran a promotion for companies that signed five-year contracts with them…year 4 would be at 50% cost; year 5 was FREE! To a buyer, this might be enticing, right? Our sellers would use such offers to funnel sales discussions back to one of our strengths – stability. In uncertain times, companies are reluctant to partner with unstable businesses. In this instance, the competitor was sacrificing long-term revenue for short-term gain. What would it mean for that customer come years 4 and 5? Could they count on that provider to continue to deliver? Often, the answer was no and the deal would swing back to iCIMS.


In summary…

  • Strategically re-allocate budget and headcount from new logo acquisition to existing customer expansion, in particular taking advantage of your top talent.
  • Keep your team productive via adjusted metrics and potentially compensation, as well as focus on culture (emphasis on successes, learnings, etc.).
  • Performance-manage your existing team and stay on the lookout for top talent now willing to consider new opportunities.
  • Align on what concessions you are willing to give, and to which customers. Lack of structure can lead to unnecessary discounts or make your job when returning prices to normal more difficult down the road.
  • Closely monitor trends (e.g., increasing win-rates, more RFPs, etc.) so you can increase investment to fully participate in the recovery.
  • Assess the competitive landscape and determine how the new climate should change your go-to-market strategy (i.e. via attacking vulnerable competitors) and any changes to your ideal customer profile.


Adam Feigenbaum

Adam Feigenbaum

Proud Dad. Suffering Mets Fan. Space Enthusiast. Believer that Luck Happens when Preparation Meets Opportunity.