This post continues our series that explores how companies are responding intelligently to the economic downturn.
The following is from an interview with Stephanie Valenti, CRO at SmartBug Media, an inbound marketing agency that partners heavily with HubSpot. Stephanie has more than 15 years of experience leading and building international B2B sales organizations and operational departments of 50-500 across the U.S, Australia, and Europe. She started her career at Staples Business Advantage and has since worked in various roles at Vari and Loftwall and is an ambassador with Pavilion.
The following has been lightly edited.
What are you most concerned about in light of the market turn?
Right now, there is a collective holding of breath, waiting to see what happens next. That’s terrifying for revenue or operational leaders because we can try to control as much as we can and be proactive, but we can't control the market. We’ve got qualitative and quantitative information, and we have to do our best with it, but we don’t have a crystal ball.
Unknowns cause fear for people, so I am focusing on the mental health of my team as they navigate the fear that comes with a rapidly changing economy. I am doing this through active listening skills and empathetic leadership. In addition to supporting the fear of the unknown, I’m focused on training my team for efficiency and proficiency so that we are always doing the best we can with what we have. People make our business run! So in a market turn, that is where I focus!
“People make our business run! So in a market turn, that is where I focus! “
How has SmartBug responded to the current economic downturn?
From a revenue acceleration standpoint, SmartBug prides itself on being an inbound marketing engine. We focus very little on traditional prospecting and instead work on driving inbound lead generation through the adoption of the inbound sales methodology. If you are not familiar, it is a smarter, more customized approach to support the buyer's journey.
When it comes to inbound marketing, it’s easy to throw the kitchen sink at the issue and try all these new tactics when economic downturns come, but that's risky. The last thing you want to do is risk your baseline of consistent business for the possibility of getting a spike. So we're assessing efforts more frequently and investing in the areas that are yielding success while pausing activities that have diminishing returns.
What's a commonly held belief about how to respond to an economic downturn that you personally disagree with?
The key to responding to an economic downturn is flexibility. Organizations that stay true to their north star, but don't revisit their ideal client profile, industry focus, product mix, etc., are doomed for failure. On the flip side, those that go rapid fire without metrics to measure successes and failures fast are also at risk of demise. It is all about listening, discussing, and responding—not just listening and reacting!
“... It is all about listening, discussing, and responding—not just listening and reacting!”
Where do you acquire your data and analysis to support headcount planning and compensation practices? (Note: SmartBug is not an OpenComp customer at the time of this interview.)
We utilize a financial tool that can do some headcount planning based on assumptions and perpetuals you input. We know that headcount is just like forecasting; it's quantitative and qualitative. We have to look at existing data, future data, and trends of churn and attrition. There are a thousand data points required to be exceptionally good at capacity planning. Right now it's very manual, and we definitely need some help. It's done in spreadsheets by our executive team.
“You have to look at existing data, future data, and trends of churn and attrition. There are a thousand data points required to be exceptionally good at capacity planning.”
What attention, if any, have you paid to pay ranges as a part of your strategy?
I have been with my current organization for six months, and a lot of the original pay planning and bands were created prior to my joining the team. That said, it’s clear we’re starting to get more formalized in our processes.
In the past, our ranges have been based on historical reports, such as from the HubSpot ecospace. I know we did some level setting about a year ago based on a few undermarket situations. We're a very database-backed organization from a decision-making standpoint.
What is your team doing to increase revenue?
We are known as the leader in inbound marketing generation strategy, so it would be silly not to drink our own Kool-Aid! So as you can imagine, we are continuing to invest in our own inbound marketing efforts.
In addition to our own inbound strategy, client success is always top of mind, so a part of our growth strategy starts with diving deep into ROI-driving activities for our clients. When our clients are successful, they invest more into their growth strategies and other supporting services! It is a win-win!
We are also assuring that we are flexible! During an economic downturn, clients' needs may pivot. Our sales team is opening their ears and listening to the needs of our prospective clients. If it is not a service we typically provide, instead of saying “no,” we are saying “maybe?”
What is your team doing to conserve cash?
SmartBug is a long-time profitable company, so we have goals to continue that.
With that, if you're looking at any sort of reforecast in a business, it's not just the top line. A reforecast includes top-line revenue reduction and budget restraint since you want your EBITDA (earnings before interest, taxes, depreciation, and amortization) to remain around the same amount.
We're diving into every single line of our budget with the chief financial officer, asking ourselves what we’re willing to get rid of and what we’re not. Guess what didn't go away? Our sales and marketing budget. That’s because getting rid of your sales and marketing budget while saying you want to accelerate revenue is a contradiction. You can't accelerate revenue and cut your sales and marketing budget.
“... getting rid of your sales and marketing budget while saying you want to accelerate revenue is a contradiction. You can't accelerate revenue and cut your sales and marketing budget.”
Zoë Rose is a Content Marketing Manager at OpenComp and has held roles at Fuel Cycle, CorePower Yoga, and TrueCar. She pens the monthly High Growth Matters Spotlights. Connect with her on LinkedIn here.