Updated: May 16
Current sales culture has a bit of a problem. The 'deal factory' mindset values predictability over everything else, and when this meets head on with a massive chaos factor, like we're living through at the moment, the wheels come right off. Why?
There are a few reasons for this. Forecasts are 'best guess'. Regardless of how much a customer may have committed to a deal , it's not 'bankable' until the the paperwork is signed. The quarterly revenue numbers are themselves a 'forecast' of sorts, they aren't audited until the year end, so saying stuff like "it's how we report to Wall Street" is to create a process point which improves investor confidence. In our effort to deliver consistency, sales people tend to focus on the process point, the 'booking event'. This is usually when the champagne gets broken out and the congratulatory e-mail get's sent. If the deal was big enough (or the quota small enough) the quarter is 'done', the number is banked and that sense of accomplishment can be enjoyed at leisure. In the world of SaaS, this is exceptionally dangerous, because the revenue is received over a much longer period. It's not one massive invoice that the customer pays in one or two tranches relatively quickly, it annual or semi annual billing over a multi year period. The invoices get sent out, and they have to be paid. But when the really unprecedented happens, if companies really can't see very tangible value, they can decide it's worth the risk to just stop paying. If you're measuring 'booked revenue' as a combination of renewed business and new growth, sales forecasts are actually pretty useless. You've got to find a way to also measure Delivered Value. Is the customer getting value? What is that value? How can YOU quantify it? Does the customer agree with your assessment of that value? This is not Net Promoter Score, it's something a lot deeper. "The Really Important Question (RIQ) is 'If we turned off this service right now, what impact would it have on your business, and how would you recover?" Most organisations have no idea how a customer would answer that question. They're focused on growth, not value. Best case scenario, they know what the reply might be in a quarter of cases. So when chaos is unleashed, and business are forced to make 'really difficult decisions', budgets get re-examined in a different light. Spend that was tolerated, either because someone did a really good sales job internally or externally and pushed the 'potential value', or because there was a measurable return on investment in the past, that gets cancelled pretty quickly. Right now, a lot of sales people are working on revised quarterly forecasts. Many of them haven't led with empathy by understanding what the customer values and how they measure that value. They're basing their forecasts on things like usage stats (has the customer logged in?) and the previously mentioned Net Promoter Scores.They don't know what really matters right now to people making decisions about the budgets they relying on. They can't answer the RIQ, and they don't have the skills to empathize with the customers predicament, they're only focused on the deal.
So yes, empathy is missing, and right now is a really good time to examine how you can add it. Because, with empathy, you're in a much better position to understand your customers, anticipate their challenges and come up with mutually beneficial solutions, regardless of what your entwined future might hold.