3 ways to optimize SaaS sales in a downturn

My first month with a sales quota was September 2008 — not the best month for a 21-year-old to start his career by cold calling strangers and convincing them to buy a $10,000 piece of software. The economy was in free fall, companies were slashing workforces nationwide and all budgets were frozen.

Against all odds, I ended up doing well. Well enough to be the best salesperson globally (out of nearly 1,000) and breaking the 10-year record for most sales in a single year. How? After working on the first Obama presidential campaign from 2006-2008, I had a fresh perspective on how to sell. One that works regardless of whether we’re in a bear or bull market.

There’s tremendous opportunity in a recession for growing revenue. But first, you have to fundamentally change the way you approach sales.

Here are some quick tips for founders and salespeople to help keep SAAS revenue growing during these tougher times.

Adapt your sales pitch to the current market

When capital is cheap, growth is the primary metric all executives and investors target. For the last decade, capital has literally never been cheaper.

All that has changed, though. Today, companies are unable to spend more than they make. That means that your old sales pitch of “We can help you grow faster than ever!” must change, too. The new message that will resonate is, “Let’s get more out of your existing resources!”

If you can show someone how your $30,000 SaaS subscription is going to save them $150,000, that’s an investment any company would consider regardless of budget freezes. If a company can’t hire any new people, they need to boost their efficiency per person in order to grow. If you can frame your product as a way to boost revenue or cut costs, people will find a budget.

All this might sound obvious, but a shocking number of salespeople and founders struggle with this. It’s hard to throw away a well-tested marketing pitch that has fueled several years of growth. It’s hard habit to break for a salesperson. Even in a market where your product needs to do one thing, show them the money.

Make your customer a hero

There’s a piece of unexpected psychology that allows some sellers to thrive in recessions: Your customers are nervous about losing their jobs, too.

Companies look to cut costs during downturns. They try to decide which departments are most critical to success, and that exercise creates a unique environment where leaders need to prove they are more valuable than ever before. In this environment, you can actually increase your close rate by making your buyer look like a hero and helping them look good in front of their boss.

Think about it like this: If my product costs $30,000 but it saves a company $150,000, then by purchasing it, a buyer just netted their company $120,000 in additional savings. That’s something they can hold up in front of their CFO or CEO. Your customer has just demonstrated to their company that they are essential to the company’s revenue stream.

In a downturn, money saved is worth even more than money earned.

Acknowledge, reframe, urgency

During an economic downturn, it’s critical to both resonate with your customer’s emotional state and move the ball down the field. This is why I developed a three-step strategy called ARU: acknowledge, reframe, urgency.

Let’s say you sell a SaaS CRM platform. Following the ARU strategy, you phrase your pitch thus:

1. Acknowledge: The economy is shaky and most companies have frozen budgets. Some are even dropping existing tools. I’d imagine your team isn’t even looking at new tools for this quarter at least? (Note: “Getting ahead of the objection” is critical to sales. Say what they are thinking first, and you get to play offense.)
2. Reframe: When there is a ton of cheap VC capital in the market, it’s an arms race to grow. When money dries up, that’s when you see which teams actually built excellent GTM motions. Our CRM helps you get more from the existing salespeople, leads and process you’ve already invested in. When times get tough, you see which sales leaders and teams can actually sell.
3. Urgency: The downturn won’t last forever, and when VC capital starts flowing into the market again, we’ll have more spending to grow again. This is a unique opportunity to steal market share by executing better, which is exactly what our solution helps your sales team do.

This method is profoundly more effective in a recession, because it is tailored to the market situation. By acknowledging reality, and then providing an unexpected opportunity from it, you gain both trust and respect from a prospect who is used to impersonal outreach from sellers.

Timeliness is the final ingredient. By presenting the opportunity as unique to the economic situation at hand, you prevent them from hedging their bets or waiting until the recession is over to decide what to do. This strategy was key to my success in the 2008 recession and the smaller downturns since.

Be honest about reality

In a recession, maximizing profit is top of mind for everyone.

If you’re willing to swim against the current of traditional sales tactics and recalibrate your strategies to address the market rather than ignore it, you’re already ahead of most other revenue teams. Tailor your approach, show prospects unexpected opportunities and focus on the money.

Happy selling!