Recession Defense Strategy: Leveraging Your CRM to Avoid Slow Sales

We're seeing net new acquisition slow down in our customer data. You're probably seeing the same with longer sales cycles and lower net new close rates. The good news is there's actually a way your CRM can help your company grow during a downturn if you play it smart.

It's the too commonly neglected portion of growth... expansion. The mythical land where many companies seem to not do it at all, or have unbelievably high close rates (according to them). The reality of expansion is still lucrative if done correctly, and your CRM can hold the key to tapping this growth channel.

Many companies think they're doing something with expanding existing accounts. But when we look into how and where they're doing it, the truth ends up being a little more mysterious. Naturally, asking how and where expansion is happening, surfaces the who question. And that's where a few more problems show up since someone might technically be responsible, but their incentives tell a different story. Let's dive in.

Key Areas Services Companies Mess Up

It's tough to win new logos. Each and every day it gets tougher to win them. More noise from AI in the inbox, on social, on the phone. And that's not me saying that you shouldn't be working channels even though they're getting crowded.

Instead, it's to call out that you must not ignore the potential a net new logo has once it is won. That you need a systematic approach to identify and capitalize on growth opportunities after a set period of time. That this is only the beginning of the business you should win with that logo.

Typically this is where service companies mess up:

1. Not having a formalized process captured inside of their CRM to capture and create expansion opportunities after the very first sale
2. Lack of clear responsibility around expansion ownership via incentives and explicit process
3. Clear data capture and measurement of expansion vs. net new in the CRM

If you don't experience any of these shortcomings; congratulations you are the 1%. For everyone else, there are gaps in one of these three areas that lead to huge chunks of missed growth. Think about it. You have the biggest differentiator needed to close more business by having an existing client, with an existing relationship, and a (hopefully) human touch. It's the perfect recipe to expand the account in a world of AI noise and volume cannons.

Your team is literally in front of a prospect who already trusted you to buy, without any distractions to discuss doing more business together.

Make the most of that situation.

Using the CRM to Avoid Recession Woes

I think nailing an expansion motion is such a critical part of growth stage services companies that we've focused our whole offering on this. Especially when times are getting more difficult. It's the highest ROI activity you can do during tough times. It's an easier feat to leverage existing relationships and find where else you can provide real value to clients, compared to breaking through the noise and building trust when everyone is on edge.

Take a look at a net new motion. More top of funnel volume isn't an option when CPL goes up, sales cycles get longer and close rates drop. If you want to stay profitable or continue growing during a recession. That recipe naturally leads to lower efficiency and profitability and isn't sustainable. So instead you have to see how you can help your clients win more in tough times.

Knowing this, the organization must dig into every nook and cranny. They must make sure that no lead has been dropped and no opportunity has been unexplored. The CRM will have these things. Even if you've had bad processes, definitions, and chaos.

Expansion opportunities in the CRM are there in one shape or another. We've gone into very bare accounts and with a couple days of imports and light enrichment, expansion opportunities are identified and re-activated. Do you know where to look to find these?

What We Typically See

Expansion opportunities have somewhere between a 10-15% higher close rate compared to net new when tracked from first identification of an opportunity to close. Teams that claim they have 60%+ expansion win rates typically are only tracking when the opportunity is nearly entirely scoped and being negotiated. But 10-15% above net new is a more realistic expectation based on our data.

Expansion effort is real effort. Organizations that don't track these in the CRM are typically losing hundreds of hours per year (via AMs, AEs, or someone similar) to expansion scoping that never comes to fruition. They're also losing hundreds of thousands or more in revenue because these additional opportunities are forgotten about or lost in hand-offs.

Reasons vary as to why this gap happens. No visibility across the org on the deal at hand. The employee left and didn't transition the expansion opportunity to the new account manager. Other projects get busy and they forget about the additional work that could be captured. The list goes on.

How to Do It

When net new business is closed, a formal tracking setup for capturing data around expansion opportunities must be implemented going forward. You can even backfill this to a degree. Syncing old emails between your sales team inbox and the CRM records. Adding all old digital notes, docs, and meetings. It all adds up.

Once all this is done, you can cater your "evidence" of case studies, testimonials, and whitepapers directly to the contact you're trying to nurture.

Then it's just old school selling that will take you the rest of the way. You can layer on additional AI workflows, nurture sequences, etc. to automate some of the process. But you have to be careful since these are existing accounts and you don't want to make it look like you're automating your relationship.

And now you're using your CRM to tap into expansion.

Implementing This Change

Typically changes in systems are viewed as a top-down approach. Enforce processes and require behavioral changes to make the CRM and other systems collect the data needed. Is this how the 3 shortcomings are avoided?

For us, we approach it more like a sandwich. A combination of top-down and bottom-up influences that lead to the desired outcome (more expansion revenue). You can do a similar approach (or hire us to do it, duh).

From the bottom (the CRM configuration), add in required inputs at certain "gates" in the selling process. These should capture whether expansion opportunities exist. You can segment this with options for specific, broad, and no expansion opportunity labels. Automations can be built to assign these to proper team members and create future opportunities. Reports can be built to track the results of these data points.

From the top (leadership), alignment of incentives around expansion coupled with organized trainings for the sales and CS teams to identify and collaborate on these opportunities.

And when the two pieces of bread of the sandwich come together, the growth can be delicious.

Where to Start

How long did it take to nail down your net new process and channels? Are you even "there" yet? Expansion is no different. It takes time, expertise and a heavy risk of burned accounts and burned out team members if you get it wrong.

Skip the risk and hassle, book a call with me to get it right the first time: https://www.mergeyourdata.com/#book-a-strategy-session

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