The Upside of a Downturn: 10 Tips to Winning in 2019
Here’s to a great year ahead! Well, we certainly hope it will be great for our tech clients though it likely won’t be as robust as the last couple years.
The New York Times quotes John Higgins, chief markets economist of Capital Economics, “while we aren’t explicitly forecasting a recession next year, we wouldn’t rule out a mild one. At the least, we expect a significant economic slowdown.” The article goes on to cite that “nearly half the chief financial officers surveyed by Duke University’s Fuqua School of Business foresee a recession by the end of next year. And by the end of 2020, 82 percent do so.”
As marketers, how might we create an upside in a possible downturn? I’ve listed below a few tips that we’ve seen work well to mitigate risks. In fact, when Jeff Thompson and I co-founded Aventi Group in 2008, in the middle of the Great Recession, we did so not because our respective firms were struggling…but for quite the opposite reasons. We merged our practices because we needed scale to handle the demand from forward thinking companies at the time, such as Symantec, SAP, Swan Systems, Postini, Untangle, etc. who actually increased their program spend in specific areas while holding headcount flat. We’re now seeing similar signs as we head into Q1 of 2019.
Shift spend from creative to mid-funnel boosting content marketing
By “creative” I mean spending on beautiful brochures, highly produced videos, print/digital advertising, original photos, new artwork, iconography, etc. We had a client spend four times as much on creative than on the content marketing itself last year which crowded out spend on campaigns that could have put that content to work building pipeline. So we’re recommending fewer assets but doing more to activate and amplify them through social media, search marketing, blogging, webinars, and more.
“Atomize” and amplify your marquis assets
One 3,000-word white paper can be the source of dozens of derivative pieces that all tie together beautifully to reinforce your core messaging. Think of bite sized “atomized” content such as blog post series, tweets, infographics, checklists, scorecards, point of view pieces, paid search copy, and so much more. Use social media, email marketing, and paid search to amplify the content.
Shrink floor space at trade shows to free up dollars for regional events
Booth space at major industry events like RSA Security, VMworld, and Dreamforce can cost many tens of thousands of dollars. As an example, the difference between a 20’x30’ booth and a 10’x20’ one at RSA Conference 2018 was $52,000. That’s enough to fund several small customer events. Why not trim floor space to free up bucks to fund a few more regional customer events such as “lunch and learn” seminars or a webinar series targeting specific verticals? These tactics often have much higher ROI than big industry events.
Leverage your channel more
We favor co-marketing with value-added resellers and managed services providers over distributors offering events (e.g. Ingram’s “blitz days”). Think highly focused joint campaigns with select channel partners, the smaller, the more focused, the better. Take a look at the CRN Next Gen 250 listing which profiles channel players who we’re sure are quite hungry to partner with relevant tech vendors. We recommend co-funding by focusing on higher growth verticals such as health care, financial services, media and entertainment, retail, government, and energy. As an example, see this Business Insider article on cybersecurity industry growth hot spots.
Intensify focus on your installed base programs
Even in downturns your most loyal customers will turn to you first for solutions. We’ve helped our clients with installed base programs that drive more seats/licenses by proactively targeting their customers’ expansion into new geographies, new organizations, and hooking into new initiatives such as digital transformation, AI, and IoT.
Tune your value prop to more conservative purchase drivers
Again, we look to 2008 when we saw vibrant IT spend due to compliance requirements (e.g. Sarbanes-Oxley, HIPAA, PCI, etc.). Add to this list GDPR, NIST, PCI-DSS, and more. See this ComputerWeekly article on cloud computing compliance requirements. Besides compliance, emphasize how your technology saves OpEx and CapEX. And check out this example from Pure Storage which nicely demonstrates cost advantages over hardware expenditures.
Shift campaign spend to greater emphasis on account-based marketing (ABM)
We’re sure you’re already running ABM campaigns by now and are getting good results. But if you haven’t already done so, now’s the time to spin up your ABM campaigns. This LinkedIn article “What Is Account Based Marketing, Why You Should Adopt It, And How” is a great primer. We’ve experienced ABM campaigns delivering 10x ROI within the same fiscal quarter because of the very sharp, deliberate focus on a limited set of named accounts and targeting very specific contacts within those accounts.
Invest more in your sales team with deeper training and enablement
One of my former clients, Kevin Chapman, was VP of Worldwide Sales at Symantec during the Great Recession of 2008 when he used the opportunity to invest heavily in his enterprise sales team. In the sales kickoff meeting, Kevin referred to an old Jewish proverb “when business is slow paint the shop.” In effect, invest in your own business. Consider deep dive training on topics such as how to lead discovery sessions with prospects, handling objections, articulating powerful value propositions, setting competitive traps, closing skills, and so much more.
Revisit your pricing, licensing and monetization strategies
Marketers often look to their product managers for all things pricing related but that’s a big missed opportunity for leadership. Did you know you can impact your top line and/or margin by ten percentage points or more by adjusting key levers such as optimizing features into good/better/best tiers, pricing for different use cases, rationalizing discount tiers to avoid discontinuities and irrational steps, standardizing contract terms, and so on. We highly recommend our partner, Software Pricing Partners, for a deep dive on your monetization model. Check out their software pricing grader to see where you may have opportunities for improvement.
Offer sales promotions tied to solution selling
Instead of offering discounts to all customers, focus them on specific customer segments that perhaps have high penetrations of some of your technology partners. For example, Okta offers a 50% discount to VMware customers who have deployed Workspace ONE. The advantage of such joint promos is that you isolate price discounting from prospects who would otherwise not need a promo while getting a partner to share in the investment. You can run a similar joint promo with specific channel partner tiers such as this one Fortinet is running their anti-virus resellers.
We hope you find these ten tips helpful as you plan your yearly investments. Naturally, all tactics we’ve described here are ones that we, Aventi Group, have devised and executed on behalf of many of our clients. So, we know they work! Please contact us here if you’d like to brainstorm how we might help you take advantage of a potentially cooler market in 2019.