Can Software Founders Grow Their Business in a Recession?
It’s no secret that the post-COVID economic boom benefited most software founders as sales targets were being met, workforces expanded and businesses looked to software for cost efficiency.
However, as 2022 is coming to an end, so is the honeymoon phase with a recession in 2023 looming. No one can argue that dark days are ahead for the tech sector with further expected layoffs after Meta and Shopify slashed their workforce by +10,000 staffers. No doubt, other major tech players will follow as they monitor the landscape very closely.
The question on every founder’s mind right now: How worried should you be as a founder? What are the steps you can take to grow your SaaS company in 2023 with a recession looming?
In this article, we’ll be exploring in detail advanced growth marketing strategies you can explore to make better use of your resources, strengthen your brand and maybe even grow sales.
Talk To Customers Like You’re Dating
Okay, forgive us for injecting a little bit of humor into an otherwise very serious topic. In 2023, it’s expected that new customers will become harder to acquire and your deals currently in progress will take even more time to close because the economy is slowing, interest rates are rising and inflation cuts into our profits.
Don’t Panic, You’ve Been There Before
Client relationships are like relationships with your significant other; you get along fantastically in the beginning (honeymoon phase), then things start to normalize (getting comfortable), and then slowly, small issues start to surface (fight night!), etc. Sounds very similar to the average client lifecycle, doesn’t it?
Treating your customers like you’re dating can open up your perspective to finding mutually beneficial ways to make it work. With enough experience, we all know too well the key to any relationship – marital or business – is communication.
Talk To Your Customers
When we bring up speaking with customers, founders usually frown. They don’t want to disturb their customers, they fear that they might run out of favors, or it’s been way too long since anyone has actually spoken to them, yadi yadi yada. The reasons for not speaking with the very same people that puts food on their table are endless.
So, let’s highlight 5 reasons you should talk to customers:
1. Reduce Customer Churn in a Recession
A founder’s main concern is always customer churn (high churn = higher customer acquisition costs). But how do you reduce customer churn in a recession?
You need to get ahead of the frenzy by getting in front of the customer and working out ways to solidify your partnership in the months ahead.
Ask pertinent questions as to what is happening in their industry, what’s changing internally, who’s staying onboard, and who’s leaving… what you ask is really up to you, the point is to show them you care and collect information that will benefit your organization.
If our word isn’t enough to convince you, rest assured that 86% of your customers might look to another provider if they feel their business is would be more valued elsewhere.
2. Find Areas for Mutual Gain
As noted, communication is everything in a relationship. When times are tough and customers are not getting the full value of your product or services, providing them with a shoulder to lean on might just keep you at bay from customer churn.
Speaking with customers provides your customer experience team opportunities to find weaknesses in your current delivery of service, seek out new opportunities for your start-up, and even better, understand how their customer profile is changing in a recession.
If budget cuts are on the horizon, and your company is next, you might just be able to get ahead of the curve and work out an agreement that makes sense “right now”.
The added bonus here is that you’re improving your brand’s customer loyalty in the process.
3. Increase Customer Retention in a Recession
If the first 2 points did not drive the point home, this one should. By getting ahead of the panic around the recession, understanding your customers’ evolving needs, and adapting your strategy, you’re in a much better place to service your customers. Studies consistently show that proactive customer calls boost customer retention, minimize churn, and provide an amazing feedback loop.
Who knows… you might find that next billion-dollar feature!
4. Identify New Selling Propositions
Selling propositions are not static – they change with the times, type of customer, industry, vertical, etc. The most successful companies in the world continually test existing and new solutions with a cohort before launching to the entire market.
Discussing with customers gives you an opportunity to do reverse-demo; let your customers show you how they use your platform, product, or service, and identify ways to recalibrate your message. Learn more about this technique using our guide.
5. Aligns Sales, Marketing, and Customer Success
When companies grow fast, the downfall is that departments start operating in silos, with less time to communicate with each other and leading to misalignment in messaging, selling proposition, and brand direction.
Talking to your customers, especially in a recession, and recording your calls with them, gives your company the unique opportunity to “playback the tape” and derive useful training materials for new – and existing – sales, marketers, and colleagues.
The most legendary athletes in the world, like Tom Brady, review their performance to quarterback their teams to championship after championship, so why not you?
We can keep going on the endless reasons why you should communicate with your customers during a recession, but we’ll save that for another article. Let’s uncover other ways to unlock value in your organization and grow sales during the recession in 2023.
Focus Your Marketing & Sales Budgets on Key Opportunities (Only)
Ever hear of intent-based marketing? It’s the secret marketing weapon that the biggest technology companies (Facebook, YouTube, Netflix…etc.) don’t want you to know about.
Simply put, it’s focusing your marketing and sales efforts on companies that demonstrate purchase (read: intent) behaviors for products like yours. Using cookies and various other methods, B2B data intelligence companies monitor signals coming from IP addresses looking at specific companies and sell them to marketers like us.
Ever wonder how YouTube is able to push an ad very relevant to something you previously looked up? We’ve compiled a list of the Top 5 Rated Intent Data Providers for reference.
To give you an example of how you can grow your ROI on cold emails and targeted ads on LinkedIn, let’s walk you through an example.
Ex: I have a software that helps companies manage their audit procedures. I work mainly in Florida and my business services only Floridan businesses in healthcare.
Using intent-based software, I can filter for companies that are displaying buying behavior for internal audit needs in the Florida Healthcare market. I also want businesses that show strong intent behavior, so I can filter the intent search using a scoring system from 0-100, with 80 being a good benchmark.
In doing so, I’ve found 160 businesses that match these exact criteria.
A Step-by-Step Process on How to Use Intent Data for Lead Generation
Step 1: Download the list
Step 2: Prospect on LinkedIn for the decision maker and end-user
Step 3: Create unique and hyper-personalized emails that address the problem you solve in the context of the healthcare market.
Step 4: Upload the list on LinkedIn and target them with awareness ads.
Step 5: Task a salesperson with proactively calling and nurturing these leads as they go through your email and LinkedIn funnels.
Leverage The 3 Degrees of Separation Strategy
Numerous studies conclude that the average person is now connected by just three degrees (read people) within a social group. Anyone who owns a LinkedIn account has at some point recognized this very fact.
Knowing this, we can automatically generate a sales pipeline for free, with no ads, no cold emails, and just about the best sales tool in the world: friendly introductions. Full disclaimer, this strategy was brought to my attention some years ago, and don’t recall its exact source.
Step 1: Make a list of everyone you know
Step 2: Segment your list in the following columns
- Current customers
- Former customers
- Friends & Family
Note: At this stage, you might have a list of at least 50 people. If you’re really popular, who knows, that range is probably 10X!
Step 3: Call each member on that list, tell them what you do, who you serve, and if they can think of 3 people who might be interested in learning more.
Step 4: At this point, you might have 150 potential leads, time to warm them up by name dropping the person who referred you. Don’t sell, be casual and offer to get better acquainted.
Hey John, Adam T and I we’re catching up, and he told me a little about you. He insisted that we should connect and at least get acquainted. Are you free for a virtual coffee this afternoon?
Step 5: Speak to John, and explore if there is a fit. This is not a discovery call, you’re just getting to know the person.
Step 6: Ask John if he knows 3 people who might benefit from this. Keep going until you land that whale!
The compounding effects of this referral strategy are incredibly lucrative – trust me!
There are so many more ways we can grow business organically, but for the purposes of simplicity, we’ve given you three. We have 7 other ways to unlock sales growth in your organization. Stay tuned for upcoming blogs.
If you have questions on specific strategies or how they might apply to your business, reach out to members of the Acquisent team and we can provide more content on this.
To Summarize: A recession in 2023 is coming and any business founder needs to take the appropriate actions to minimize customer churn, improve customer loyalty, focus their marketing budget on key opportunities, and generate traction organically
- Interview your customers
- Use intent data to maximize your ROI on marketing and sales
- Leverage the 3 Degrees of the Separation strategy