OPINION | Creating a sales culture during downturns

Maybe the world will enter a recession, perhaps it won’t. The truth is that it does not matter because what’s sure is that the next few quarters will turn ugly—especially for tech companies coming from at least two years of complete bonanza, reckless growth, and complete lack of due diligence (by the VC that invested into them).

Companies will have to learn how todo more with less.This statement is true in any other crisis but the difference is that none of them had as many tech companies as the world does today. Hence, tech companies must build a sales culture (and sales teams) designed for outbound sales instead of inbound sales.

But before we dig into it, let’s do some basic hygiene of the sales-driven companies we can find today in the market and address each of their challenges.

Let’s say, for simplification, that the world is divided into:

1. Marketing / Outbound driven sales companies
2. Product Growth / Inbound driven sales companies

The A’s are the Oracles, SAPs, Pipedrives, and other similar SaaS companies of this world. These companies employ an army of sales teams, CDAs (Customer Development Associates), and customer support in various languages and across geographies.

The A’s are in much better shape than the B’s. They already have an innate sales culture built in since day one, and their businesses have a higher switching cost (changing from Oracle to SAP, for instance, is a huge investment of time and money for any organization). As they sell services that are imperative to run a business (decently sized companies can’t run without a CRM, accounting systems, HR software, and so on), they will be in much better shape to retain customers and their MRR.

However, the A’s will struggle in growing existing accounts as customers will ask for heavy discounts.  What A’s have to worry about is the threat of better offers from other suppliers and acquired new ones, especially as businesses will wait to be in a better financial standing before investing or opt for cheaper, less “famous” options to reduce the cost.

The A’s will need to refresh their sales teams accustomed to easy sales, a big pipeline, and potential customers with lots of money to spend (VC money). They will need to teach their teams to achieve less with more; they will have much less money to spend on a marketing campaign to generate inbound leads and tell their teams to use free or nearly free platforms that should generate outbound leads. The A team will need to become more consultative sellers than just sellers, their sales cycle will be longer, and both the duration and value of their ACV (average contract value) will be smaller.

The B companies are more like Slack and GitHub. These companies have grown to a considerable number of users and valuation without basically any marketing; their amazing product and their capacity to market with free channels like developers’ forums and so on gave them momentum and exponential reach. Slack is even notorious for not having made any money when Microsoft offered them $1 Billion—and they declined.

The B companies have one USP that is very difficult to replicate: loyalty.  People started using Slack because its product was made by developer teams for developer teams; even after Slack started their paid version, users were so happy to pay for it that giants like Microsoft (with Teams), Google (Google Chat), and others tried to replicate it for free and failed. Ultimately Salesforce (which knows a thing or two about SaaS software), purchased Slack for $27.7 Billion just 1.5 years after being listed. That is a power that is nearly impossible to replicate, yet product-driven inbound companies are rarer than a unicorn.

B companies are filled with extremely skilled engineers, product designers, and UX/UI experts but small or even non-existent sales teams (often coming from engineering). B companies have waived the ten years of reckless growth like very few companies could have done in the past. They will be in much worse shape to build an outbound sales culture as they need to build a sales culture first (unlike A companies which were born with it).

Ok, so how do we create a sales culture?(Please note that these are tools at a very personal level. This advice should be adapted to your persona as you may want to transfer this knowledge to your team.)

1. GET OUT OF THE VIRTUAL MEETINGS CULTURE

Face-to-face interactions like meetings, businesses, lunches, and dinners are more important than ever in the post-pandemic world. You can’t beat a face-to-face meeting, especially if you sell a highly complex B2B product. So, get out of your office or WFH arrangement and head back to the plane! Even if you primarily sell your product overseas, if you are lucky enough to live in an international financial center that hosts many decision-makers, then you should try to take people out for lunch as much as possible (just control your calorie intake and drinking).

2. LEADS ARE EVERYWHERE

While the most obvious places to lead-generate are industries conferences and forums, never miss the chance to go to that chamber of commerce event hosted in your city and/or GALA dinner. You never know who will sit next to you.   I can give several examples of incredible people you can meet before and after a social event who are useful in business-related deals. If you want to take an extra step on a quarterly basis, host a luncheon with industry experts, bring media (they love this stuff and you may get free coverage). Your first hosting will not be easy but the more you do it the better you will become at it.

When I say leads are everywhere, I mean it: I have generated leads in steam rooms of 5-star hotels worldwide (even 3-star hotels, for that matter).  A concrete example from my past: I met a Chinese businessman in the gym that ended up investing in one of my companies and presented me with more investors. How did I notice him? Not difficult to notice somebody that shows up with four bodyguards to the gym!

3. JOIN EXCLUSIVE CLUBS (High-end gyms, members-only clubs etc.)

DISCLAIMER: At your level (over 30 years old) you should be able to afford most memberships into the most exclusive clubs.

Increasingly popular around the world is the “private members club”. Soho house, (born in London and now in multiple locations around the world) is the perfect example of a business & social club you should be part of. If Soho House is not available in your city, find the equivalent in your city or a city you often travel to. Also, private members’ clubs have reciprocity with others in another city; hence by joining one in your city, you can access others in another city.

These clubs love to have young, creative talent in their pool of members (and of course, rich bankers), so play your cards well to position yourself as a must-admit.

4. ALWAYS HAVE BUSINESS CARDS & ALWAYS DRESS FOR THE OCCASION

So, I am flying from Milan to Hong Kong (in business class) and next to me sat a gentleman wearing an amazing piece of art—a watch. It was a Patek Philip Nautilus, market value approx. $150,000 – more details later on this).

So, while I was wearing a decent (but not comparable) watch, I broke the ice by saying “amazing watch”, and the rest was history. Long story short: after eleven hours of flight and talking about watches, cars, and the “Bella Vita” of Italy, we exchanged business cards. Turns out that the guy runs a big investment fund in HK. Out of courtesy, he will even introduce me to a colleague of his that might be interested in investing into a real estate project I am looking at.

Lesson learned? Firstly – again – leads are everywhere. Second, having some “big boy” interests such as cars, watches, golf, etc. is a pickup line with pretty much any businessman. I can guarantee you, 99% of them will have interest in at least one of these items. Third, always be dressed for the occasion: I was on a long-haul flight yet dressed just the right balance of formal and casual for the occasion—oh, and always, always, always have a business card on hand.

5. YOUR NETWORK IS YOUR NET WORTH, CREATE NETWORK EFFECT

My friends that know me well always highlight perhaps my strongest skill set: “relentless networker”. I pretty much have connections, friends, and people to go out with for a beer in every corner of the world.

Networking is a continuous exercise. It may not always be efficient but with enough experience, you can get sharper and sharper at it (i.e. targeting only specific events, scanning the room, and looking for the important people etc.). You need to invest a considerable amount of time, energy, money, and patience in building a strong network in life, contacts may be not immediately useful, but you never know in life.

Also, my friends named me as the “Human LinkedIn”, because I am not only good at making connections but I am also good at connecting them to each other. If you make the effort to be the first one to offer to connect someone with someone else then you will gain tremendous social value. People will look at you as an asset.

A simple calculation: commit to make 10 connections a month among your network (of course there has to be a clear match between them). In 1 year, you will have made 120. In 5 years about 1200 people owe you a favor—after all, you made efforts to connect them. (120 connections a year x 2 because you connect at least 2 people x 5 years = 1200).

Note this is a more long-term tool. You will not create a strong network or the network effect in a few quarters.

6. Get accustomed to the “NO’s” and make the “YES’s” count

It’s unlikely that you’ll be a Mark Zuckerberg type that has a hit with their first company.  Hence, you will need to try tens, hundreds of times in life to succeed. Life and money are both numbers games in the sense that the more you try, the more chances you have in life. Hence, you need to learn that you will get way more NO’s in life than YES’s, but the few YES’s that you get are the ones making the difference.

I want to use my former colleague Paul Malicki (Polish/Swedish) and his Brazil-based aviation start-up Flapper as an example.  Here are his YES’s and NO’s:

• Seed Raise, spoke to 228 VCs closed 1 (0.4% Conversion)
• Series A, spoke to 530 VCs and closed 2 (0.4% Conversion)
• Extension of the Series A to raise $5 Million spoke to 40 to close the 2 (5.0% Conversion)

The increase in conversion rate was due to a proven and profitable business model, hence VCs felt safer to invest.

Being able to accept defeat in a business deal, venture, and even in personal life is a strong skill set. By “accepting defeat”, I get the punch necessary to understand what went wrong. But what’s crucial is to pivot/improve so you can get started with the next move.

ABOUT THE AUTHOR

Mario Berta is an Italian who currently resides between Manila and Madrid.  He is an experienced CEO in the tech industry in the Southeast Asia region with extensive knowledge in building, scaling and training multi-cultural teams.  His areas of expertise cover a masterclass skill set in sales, peak performance training, strategy, and corporate culture-building.

Berta has a solid track record as a founder and sales professional, with added experience in the academe.  He is currently country managing director at Igloo, founder/Chairman & CEO of Flyspaces.com, and an Endeavor Entrepreneur.  Previously, he was Rocket Internet’s regional managing director for Asia, IDT Telecom’s Asia Pacific business development director, and AFA Press media holding’s project director of international operations.  He is also a visiting professor at IE Business School in Madrid, Spain. 

As an international resource person and thought leader, Berta has been interviewed by more than 40 local and global media around the world.  

Berta holds a master of Business from IE Business School and University of Turin.  He graduated from the Owner Scale Up program of IE Business School and Stanford University.  He is fluent in English, Italian, Spanish and Portuguese.