Responding to a Crisis: A New Revenue Framework
The global pandemic caused by the coronavirus (COVID-19) had repercussions in the business environment unlike anything we have ever seen. Marketing and sales organizations have had to adjust to new ways of working and communicating with buyers with a previously unimagined degree of speed and agility.
TOPO has created a three-phase strategic framework for revenue growth to help companies come back from a crisis event with a plan to scale for growth.
The revenue functions of every organization are the drivers of growth in any economic climate. While we do not expect another once-in-a-lifetime economic catastrophe to occur again, TOPO has created a New Framework for Revenue Growth that organizations can use during any major crisis affecting their markets or target regions. Below are the initiatives to take within each phase to ultimately return to revenue growth.
PHASE 1: STABILIZE
The first phase of any crisis starts with realizing the scope and magnitude of the challenges that lay ahead. In the case of the current pandemic, this was a gradual discovery process, but other crises can happen in an instant. Before sales and marketing functions begin their own changes, the executive team and company board must review and reset revenue objectives and the budget spend allocated to achieve them.
Organizations must make structural and tactical changes to stabilize the business, including rebuilding pipeline by shifting from broad-based programs to focus only on strong segments, changing the focus of SDRs and sales reps to targeted prospecting focused on strong accounts, and the creation of a targeted 100% digital demand generation portfolio. Risk of churn is increased in a crisis and organizations must embrace existing customers with the attention of the entire organization. Strategies and tactics must be created for engagement with customers from sales, customer success, customer marketing programs, and new product offers.
PHASE 2: REINVENT
After one to two months of emergency measures, organizations begin to make more permanent changes to reinvent their revenue functions. Everything is under review to optimize for a new reality. Segments of the market may continue to be impacted, forcing a long-term re-evaluation of the target market, Ideal Customer Profile, and target accounts as well as specific target stakeholders.
While product-market fit is always a consideration, it is now more critical than ever. Design and repackage product offerings to address the current needs of the target market, including developing new products to support changing buying environment, packaging products to reflect the new market reality, and creating packages and offers that reduce risk for the buyer. This is also the time to ensure value is being offered across the entire lifecycle.
PHASE 3: GROW
The third phase of the framework is when organizations build upon their three- to nine-month period of reinvention and begin to scale up for growth. Sales and marketing teams are normally focused on growth, but following the crisis, their focus is more on rediscovering what works to create any revenue they could. Once new strategies and tactics are established, it is then time to accelerate customer acquisition by analyzing the target market again as previously removed segments come back online, increasing demand generation and SDR budgets to capture reinvigorated segments, and expanding rep coverage to all segments by shifting sales resources back or hiring new ones.
Teams should analyze all prior tactics and activities that worked before the crisis and update them based on what drove results during the previous phases. The organization that emerges from the crisis is lean, resilient, and forward-looking. This is also the phase when organizations should adopt revenue operations, which defines a seamless, end-to-end revenue process that supports the strategic framework.
The global pandemic caused by the spread of COVID-19 had shaken society on so many levels and nearly every industry had been affected. Organizations can learn from this recovery process to prepare for any crisis. Whether everything changes in an instant or gradually, companies must shut down non-essential elements of their revenue functions and focus on segments with mission-critical alignment. This stabilization sets the foundation for how to move forward.
Organizations have an opportunity to reinvent themselves following a crisis with new go-to-markets, tactics, and metrics. Prospects and customers look different on the other side of a crisis, and sales and marketing teams cannot expect the same activities to have the same results. And finally, a return to revenue growth is the goal of any framework that helps companies see their way through turbulent times. The knowledge gained during the previous phases drives the creation of a resilient organization that can more easily navigate its way through future crises.