Traditional sales and marketing strategies won’t see you through this crisis

I recently got an email from a company that once sold me a pair of jeans. They wanted to talk about COVID-19. I’ve gotten a lot of these emails over the last few weeks, as more and more companies are blasting their contacts, expressing concern, making commitments and vowing that we will get through this together.

I used to run communications teams, so I get it; no one knows what to do these days, and all of us are looking for ways to help. But as comforting as it is to know my insurance company, food delivery service and apparel retailers are looking out for me, I find myself hoping that there’s more to the plan — that they are helping the people who actually need it (not me).

As an investor and advisor to founders, I’ve spent the last couple of weeks as part strategist, part therapist. This crisis is unlike anything that has come before in our lifetimes, but there are things we can learn from other crises and from each other to navigate the uncertainty ahead. This is not a post about layoffs or expense planning, although there are important things to say about both. Instead, this is a collection of ideas that have come out of brainstorming sessions I’ve had with startup founders over the last few weeks focused on how to think about sales and marketing in the time of COVID-19.

No one has a playbook for this. But we can experiment. We can stop a bunch of activity that was normal just weeks ago. We can learn from each other. We can plan for both short-term disruptions and long-term realities. And we can give each other some actionable steps to take at a time when everyone is trying to figure out the best way forward.

To that end, here are a few things I’ve brainstormed with founders, divided into three categories:

1) Things to reconsider or stop doing;

2) Strategies you may want to start using;

3) Places where you can double down.

Stop:

1. Using outdated automated marketing. Audit your automated marketing workflows to make sure that messages don’t allude to in-person gatherings or other sensitive topics. Much of your canned marketing is going to sound stale — take a thorough look at everything you are sending out publicly.
2. Relying on top-down sales. It’s critical to understand who has time for you. In this new world, C-suite executives have more demands on their time than ever, making it less likely that they’ll be able to focus on top-down enterprise sales. Mid-level execs may find themselves with more time, so consider engaging them with lower pricing, more training, more targeted outreach. Same with individual users, creating an opportunity for a more bottom-up approach.
3. Talking about the same things. The universe of people who are interested in feature releases and business updates has shrunk dramatically. At the same time, the news cycle has become less predictable or controllable. As a result, most large companies are holding off on big announcements and instead focusing on value-add messaging uniquely catered to the current situation. You also can target your benefits to a specific audience instead of going wide with speeds and feeds.
4. Using the same voices. Very few people want to hear from vendors right now. Several companies I’ve talked to have had success transitioning to messaging coming from the customer perspective, particularly if those customers are leveraging your product (e.g. testimonials, best practices, how-to guides, etc.). Instead of you talking, highlight your customers’ success on your social channels — feature your customers on Facebook, retweet their successes, etc.

Start:

1. Retention marketing. It’s going to be harder for some companies to attract new customers, which means keeping existing ones will be more important than ever. Make retention a real focus of the team. That could mean offering new features, releasing enterprise features, examining churn and experimenting with user education, or even softening your messaging for customers who may need to postpone payment. It will help drive value and increase long-term loyalty.
2. Expansion marketing for subscription SaaS. Marketing more directly to internal champions with content and virtual events about how your product can help inside organizations where your product already has a foothold.
3. Conducting micro-experiments. There are lots of downsides to an uncertain economy, but one silver lining is the opportunity to try new things on a small scale. Once you find something that works, you can put more effort and resources behind scaling it up (Jim Collins calls this “firing bullets, then cannonballs”). Think smaller virtual events, value-add partnerships with customers, etc.
4. Boiling down events. In-person and digital events are not created equal. Taking your in-person run-of-show (e.g. five-hour seminars) and moving it directly to video is ineffective, not to mention boring. The best approach is to identify the most interesting parts of an event and turn them into consumable video content for a more narrow, specific audience in a more creative format (AMAs, fireside chats, shorter expert roundtables and other more interactive forms of communication with live Q&A).
5. Finding new ways to fill the funnel. From a channel perspective, most companies are seeing declines in paid search traffic and leads and email marketing is not nearly as effective as it used to be. SEO and social channels are negatively affected, but less so. This creates an opportunity for companies to think creatively about ways to bring in new customers and fill the top of the funnel. For some it’s doubling down on video, especially YouTube, since viewership hours are going up. For others it’s exploring Messaging channels.
6. Creative pricing structures. It’s possible to help existing customers who may be struggling and provide additional value with no (or very limited) impact on your gross margins. New pricing structures may also make your product accessible to new groups of users.
7. Rethinking near-term relationship with your channel. Channel partners are likely to have more bandwidth right now. That creates an opportunity to change the incentive structure — making it worth their while to hold online meetings, sit through a demo, etc. You don’t have to wait until the final step to offer a reward.

Double down:

1. Be sensitive to the situation. Above all, make sure that all sales and marketing campaigns are thoughtful and more focused on supporting your customer rather than appearing to capitalize on a stressful situation. People want companies that are looking for ways to help, not get ahead.
2. Switching from a position of selling to a position of teaching. Because decision makers have less time for you (or anyone), it’s especially important to support existing customers. You can do this by offering new features or releasing enterprise features to free-tier customers, or by being more flexible with customers who might need to postpone payment, etc. It might be a good time to offer free training courses to make your existing users into power users. As the top of the funnel becomes narrower, focusing on the needs of existing customers can drive value and increase long-term loyalty.
3. Tracking metrics. A number of metrics will tell us when the recovery starts — including things like demos increasing, meetings completed, cycle times dropping, etc. You might want to look closely at churn — and understand who it is that’s churning. Consider looking at it from mid-March forward, since that may be most accurate to what you might see in the next six-eight weeks. That’s why it’s going to be even more important than usual to track all of these metrics. You’ll want to know when the tide is turning and it’s time to start investing again.

There’s no question the next few months (and maybe years) are going to be difficult for companies everywhere, and especially early-stage companies. Nothing you do can change the fundamentals of the economy, but there are some steps you can take to take advantage of small opportunities, and set yourself up for success. No one knows what the new normal will look like, which means now is your chance to prepare for — and maybe even shape — what’s coming next.

Most of all — be safe and be well.

The information contained in this blog should not be considered investment advice from Coatue Management.