Bringing in more revenue from customers:

The advice we’re sharing with First Round companies:

When it comes to interacting with prospects and existing customers, every move can feel like it might be the wrong one. Bandwidth and budgets are limited, so you don’t want to be a burden, but you also want to shore up certainty in your sales pipeline as you adjust your projections.

There has never been a more critical time not to lose customers. Consider undergoing a complete customer review to understand the health of your customer base. For many enterprise companies, the reaction of customers is all over the place. Some want to deepen partnerships, while others are freezing everything. Bucket each customer by potential risk of churn, and look at this dashboard every week.

Focus on getting paid upfront from your stickiest customers. Especially if you’re a SaaS business, ask for pre-paid contracts and give discounts to get them. Push the sales team hard to get pre-payments of 12 or more months, and reward them with bonuses for doing so. This is your cheapest form of funding.

Learn from your customers as much as you can. They’re likely focused on their own survival, so understanding how this is affecting them is key. Rework your positioning as much as possible in response. “Start with the person you're selling to. Understand their psychology and fears about survival. The best companies are able to reposition around what their buyers really care about, which is very, very fast ROI and taking costs off of their books, fast,” says First Round partner Bill Trenchard.

Advice from recession-era founders on revenue:

• Pitch a “buy instead of build” message. As Jud Valeski, formerly of Gnip, alluded to earlier, he saw the 2008 sales crunch as an opportunity to focus on the product. “We got to build the product we needed to build, without a ton of market distraction in the form of prospects telling us to do this and that with the functionality,” he says. “When we did emerge after several months of heads-down building, our message to the market certainly included how our product helped them save money. Many of our customers had laid-off engineers of their own, yet their business demands still required the functionality we provided. So, what they were once deciding to build, we were able to easily offer in a ‘buy’ package. Our pitch was deeply rooted in ‘It’s a good time for you to buy this stuff rather than take on the headcount expense of building it.’”
• Shift your mindset from “dollar-led growth” to “product-led growth,” says Jade Van Doren, former CEO of TechForward and AllTrails. “In bull markets, our focus as founders tends to be on growth above all else. Downturns force you to take on the harder challenges of building a more efficient business through product innovations, funnel optimization and organic customer acquisition channels,” he says. “While financially-disciplined growth through product and funnel improvement is often slower than throwing money at ads, the value of the business will be higher at any given revenue number because of the increased capital efficiency.”
• Go for more value over lower prices. “This is no time for business as usual. If you're sending outbound emails in an eight-email sequence, nobody cares. No one wants a 30-minute call with your SDR right now. They already had an excuse to ignore you before, now they really have an excuse,” says Gina Bianchini (of Mighty Networks and Ning). Many startups might focus on attracting new customers with freemium models or discounts, but she disagrees with that approach. “It may feel good at the time, but it can accelerate the death of your startup even faster. You may think you’re locking in value for later on with a free trial, but the conversion rate will likely be much lower than you expect with people who are used to getting something for free,” she says. Instead, think of creative sales and marketing efforts for the network you already have. “How can you restructure your packages to give the folks you already have relationships with a crazy amount of value for a premium price? Take this example: If you’re a hair salon, could you switch to an annual subscription model for haircuts and throw in additional products? This is the moment to go to anybody you have on the hook right now and make them a deal that they cannot refuse. You want cash upfront, and if you can get creative with what you’ll give for that over time, you might be able to strike a deal that’s a win for everyone (and before you do a massive layoff). If you come from a place of ‘I am grateful for our relationship. How do we get you more value?’ there will be a subset of your customers who will not just stick with you but fund you. It’s not going to be everybody, but at least spend some time on this effort before you start slashing prices.”

Get customers over the finish line with a “shock and awe” approach to delivering value.

Revenue tactics recommended by current CEOs in First Round community:

• Identify the two to three deals for each Account Executive that could close with a deeper discount.
• Offer more flexible terms, from a later start date to quarterly payments to opt-out options for a specific time period. It’s critical to retain the relationships, even if at a reduced level.
• Consider creating a hierarchy of different tiers of customer offerings: three years upfront prepaid contract, three years of annual payment, one year of annual payment, and so on.
• Share your company's business continuity plan and how you’re mitigating risk with prospects and renewals.
• Re-validate all of the basic elements of your engagements, from your customers’ priorities, to your solution’s impact, to who the buyers are — all of this might have changed.
• See if there are any customers you’ve built good relationships with whom you can go to for advice on how to handle the crisis or restructure your product offering. It may increase the strength of your relationship — and the chance that they’ll stick around.

Additional resources on revenue: