Q: Your sales manager is under great pressure to increase sales. At a recent meeting of the entire sales staff, this person said, “We have to hit our numbers no matter what it takes!” Does this emotional appeal change your way of dealing with customers?
The struggle to hit the base plan can indeed produce some less than ideal behavior in sales teams:
- “Churn and burn” deals, where customers are promised functionality that doesn’t really exist just to close them. The customers depart as soon as they realize it. A bit more on this here: 5 Tips To Minimize “Churn and Burn” Behavior in Your Sales Team | SaaStr
- Discounts that explode — with a threat. Discounts do need to have an expiration period, usually, to create urgency. But a sales rep recently told us if we didn’t take the discount this month, we could never buy the product. Mediocre sales reps especially sometimes add threats to exploding discounts. It can sort of work, sometimes. It will leave a very bad taste in the customer’s mouth, however.
- Hiding cheaper editions. Sales can be incented to hide or downplay cheaper editions that might work just as well.
- Going after customers “cheating a bit”. Do some of your customers share licenses / seats? Do some have more seats than they are allotted? If so, does it matter? In tougher times, sales will go after them to get them to pay up more. Done carefully, this is fine. Done aggressively, it creates customer resentment.
- Excessive spam-level candence. Spamming everyone in your customer base too many times doesn’t help.
- Aggressive “break up” emails that border on threats, or at least come off as hostile or too pushy. This does your company no favors, even if it helps the AE or SDR get quick certainly on a deal.
- Forcing multi-year and annual deals. Sales will often force longer deals and multi-year deals if that helps them hit a tough number, even if a monthly contract is really what the customer wants for now.
- Forcing / threatening early customers to pay today’s prices. This is never worth it, but when it’s hard to hit the base plan, sales teams will often go back to early customers with large discounts and try to get them to pay up to today’s prices.
All this type of behavior can happen at anytime. It just is heightened under the pressure to hit the base plan.
The typical “break-up” email:
Great for SDR. Move on.
Good for AE. Manage your time on accounts.
Bad for Prospects. I don't need a subtle threat.
Bad for Company. You might still close them later.
— Jason ✨BeKind✨ Lemkin ⚫️ (@jasonlk) January 22, 2021
The real problem with all this behavior is it creates less happy customers. And we’ve learned that the top SaaS and Cloud companies all succeed with higher-than-average revenue retention, often in the 120%-140% a year range.
So be on the alert for … well .. perhaps a decline in “sales ethics” if the team is struggling to hit the base plan. And a few other thoughts to help:
- A great VP of Sales will lessen the amount this happens. They may still be too aggressive here if the base plan seems just out of reach, but they also intuitively know if you go too far, it will backfire over time.
- Listening to AEs’ calls on Gong or Chorus or similar apps will also help.
- Audit and read SDR and AE emails. You have to audit and listen to a certain amount of every rep’s customer communications.
Really, the best thing to avoid a lot of this questionable sales behavior is to beat the base plan and be going for the stretch plan. That makes everyone feel more win-win about things.
A bit more here: