Software purchases and renewals are under scrutiny. Here's how to adapt.
Right now, the climate is uncertain. We’re all probably feeling that in some way. We’re unsure what’s happening with COVID-19, we’re unsure how long a partial/full lockdown will last, and we’re all unsure of how this global impact will affect our economy and our loved ones.
This uncertainty naturally leads to caution. What was a no-brainer 3 weeks ago is now under scrutiny across the board, and we’ve seen most companies finalize (or almost finalize) aggressive plans to control spend.
How does that impact software buying and software renewals?
Here's what we're seeing across the board:
|Net-New Software Purchases||Software Renewals|
On the flip side, most companies aren't evaluating alternatives - there’s too much up in the air. Right now, the focus of most conversations is how can we save money within the current spend vs. taking on the additional lift of replacing tools.
Challenging headwinds, to say the least.
We're also seeing (and - candidly - advising) companies do the following:
Auditing current spend with a fine-toothed-comb is a critical reality for Finance leaders right now. The intention with this audit is to take full stock of what's in the ecosystem and make a determination - is this critical, or is this discretionary? This doesn't mean that all discretionary spend will be cut. It's an exercise to determine what could be cut.
Proactive Vendor Outreach
Auto-renewals are embarrassing in the best of times. Now? They're inexcusable. Sharp Finance teams are requiring much earlier, proactive outreach to their software vendors to gauge what the renewal will look like, if it goes through. Historically, we've aimed for around 3 months of runway leading up to a renewal to allow for optionality (so if a customer needs to migrate, they can). Now? We're looking 6+ months out.
What does that mean if you're selling in this environment?
Be smart. Be human. Be kind. Consider the following variables going into any conversation:
Industry Impact - how has your prospect's industry been impacted?
Company Impact - how has your prospect's company been affected?
Value Impact - how critical is your solution to their business?
Prospect Impact - How have your prospect's priorities changed?
It's very likely your old messaging won't cut it. If you don't change your messaging to match the current reality of your customers, you'll fall on deaf ears (or start trending on LinkedIn for the wrong reasons).
Now, you can still build a compelling "why now" story, but it requires creativity and authenticity in order for it to work. Our recommendation? Every CEO should be sitting down with sales leadership to construct their new “why now” story and immediately roll out training across the organization. If not, pipeline will organically stall.
When you assess your prospects through that lens - and arm yourself with the appropriate messaging - you'll be better equipped to understand where the near-term opportunities lie and where you need to simply build trust.
To help us navigate our own net-new prospecting conversations, we built a "why now" framework with different play-calls. We've found it helpful in weighing the potential impact and how we should tailor our approach. You're welcome to make a copy of our version and update it for yourself - email me at email@example.com and I’ll shoot you the link.
We also held a webinar with Troops.ai that goes in on this topic more in-depth - you can watch it here: https://info.troops.ai/webinar-vendr-covid-19