3 Ways CEOs are Preparing for Budget Constraints in 2023

SBI’s last CEO growth advisory board meeting of 2022 was held last month, and the conversation followed two big themes - recession and talent. CEOs in attendance are fielding questions about cost-cutting measures, and most are shifting operating expenses from compensation and Customer Success into Sales and Product. CEOs in attendance also agreed that pricing increases were not to be feared.

The majority of CEOs with whom we've spoken are in the middle or nearing the end of their growth planning for 2023 and working with their CFOs to allocate budget dollars across go-to-market functions in hopes of maintaining or possibly accelerating growth with decreased operating expenses. In facing this challenge, enhanced commercial self-awareness enables CEOs to optimize go-to-market models in anticipation of a recession.

When reallocating spend across the GTM capabilities, CEOs should consider the three key drivers:

1. Exercising Pricing and Packaging Leverage

   1. Analyze customer willingness to pay by segment and cohort to quantify additional wallet share that can be captured rapidly.
   2. Determine patterns in customer under-utilization of products and position compelling offers to create incremental customer value through additional usage, feature activation, etc.
   3. Establish pricing analytics to monitor altered conversion patterns and rapidly enact feedback.

2. Increase Customer Retention

   1. Revisit at-risk segment identification and scoring; establish revised at-risk cohorts and execute motions to retain proactively.
   2. Consider enacting a retention desk or similar highly-empowered commercial team to analyze shifting churn patterns and enact change across the business quickly.
   3. Develop and execute customer marketing motions aimed at customers entering typical churn windows and other churn behaviors (i.e., X# months of remaining contract).

3. Optimize the Go-to-Market Model

   1. Analyze and prioritize highest propensity-to-buy customers and reallocate existing sales and marketing resources toward those segments and markets.
   2. Get remarkably clear on commercial role definition and reclassify unnecessary responsibilities (and roles) into more impactful revenue-generating functions; revise coverage accordingly and align with HR, so they have clarity on the right profile for each role.
   3. Activate and enable indirect channels to improve scale and reach; deprioritize unproductive relationships, over-indexing on the healthiest and highest-potential partners.
   4. Retool the Enablement function shifting attention away from onboarding and new hiring ramping to driving incremental productivity across all quota-carrying roles.
   5. Enact more stringent performance management processes and upgrade talent, swapping out lower-performing talent for better talent.

Go-to-market planning for 2023 relies on CEOs to identify and lean into the looming recession. From a planning and mindset perspective, start championing that effort inside of the business and with the ELT. The sharpness on which people are making decisions for 2023 is better than times past based on those who “think” that a recession is coming versus “it’s here.” This way of thinking creates a decisive mindset and helps from a planning perspective which should be the council provided to your partners and business leaders. This certainty creates clarity for the team and helps enforce decision-making and tradeoffs.

For resources and tools on how to prepare for 2023, click here.