Don't Divest Your GTM Efforts During a Downturn - Amplify Group

The current economic climate is a challenging time for many companies. To cut costs and extend their runway, a lot of businesses are actively cutting sales and marketing budgets. Divesting in sales or marketing efforts now can have dire consequences for your company's overall annual revenue and long-term growth. As a CEO or founder, it's important to consider the repercussions of such a decision, especially during challenging times.

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Here’s why you shouldn’t divest in sales and marketing right now.

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The numbers speak for themselves

According to a recent survey by SaaStr, 82% of sales teams are missing quota right now. Your sales team needs the support of your marketing and RevOps teams because those numbers certainly won’t improve without an even more aggressive and targeted strategy and effort.

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Furthermore, our friends at VentureBeat cited that –

• During the 2008 financial crisis, a study found that 60% of the brands that “turned off the lights” to marketing for six months saw brand use decrease 24%, and brand image decrease 28%.
• Another study of 600 companies from 1980 to 1985 found that businesses that chose to maintain or raise their level of marketing during the recession had significantly higher sales after the economy recovered. Specifically, companies that decided to advertise aggressively during the slowdown had sales 256% higher than those that stopped. 

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You'll be left behind and lose momentum

One of the most significant consequences of divesting in sales and marketing is that it can put your company at a severe disadvantage compared to competitors. Consistently keeping up with sales efforts, even during a downturn, keeps your brand top-of-mind with your target audience, regardless of whether or not they're making purchases during this time. Without an effective sales strategy, you'll likely lose out to competitors who did not stop their sales efforts.

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Divesting in sales can be akin to hitting the pause button on your company's momentum. Once sales slow down, regaining lost momentum takes more time and resources than you may think. It’s like your first time back at the gym after a few weeks off. It ain’t easy. This momentum is important for your brand to be able to weather future potential crises and survive in a competitive marketplace.

It shows a lack of confidence in your company

Cutting down on sales and marketing efforts sends out a negative message to your clients and investors. As they say, perception is reality. It demonstrates that a company is unable to stay resilient in tough times and leaves the image of incompetence. Investors and buyers generally support companies that believe in their ability to weather downturns or setbacks.

Sales recovery requires more sales efforts, not less

When the trail gets steeper, you need more traction to make it up the hill, not less. Efforts to boost sales growth can be more effective, meaningful, and cost-efficient when carried out during difficult periods. For example, sales and marketing agencies as well as technology vendors might be more willing to negotiate on price with you during these times. This can allow you to get more support for the same (or less) investment than you could otherwise in good times. Once the market is favorable, it will then be easier to maintain growth momentum.

There will be negative consequences on your long-term growth

Finally, it's crucial to note that reducing sales and marketing efforts during challenging times can have far-reaching consequences that extend well beyond the immediate downturn. This is primarily due to the fact that sales efforts and customer engagement play a pivotal role in fostering strong relationships with potential clients. Divesting in sales during difficult times could lead to poor brand awareness, loss of leads, and poor customer retention. Consequently, any possibility of future revenue growth reduces significantly.

To wrap up, while it may seem viable to cut down on sales efforts to cut costs when faced with a downturn, it's always better to invest in your sales and marketing efforts instead of divesting. However, it’s also important to be extra diligent in how and where you’re investing. Carefully forecasting and measuring the ROI of your efforts to maximize impact is critical. The consequences of divesting in sales or marketing may seem small at first, but we caution you to reconsider due to the impacts both during and after the downturn. Through resilience, flexibility, and a clear understanding of the repercussions of any decision, your company is guaranteed to stay resilient and emerge stronger from any crisis.

If you’d like to learn more about the way Amplify helps our clients assess and prioritize their sales and marketing investments, we welcome you to schedule a strategy call with our founder.

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