4 Ways Downsized Sales Teams Can Deliver Outsized Returns

The current tumultuous economic climate has led to a deluge of layoffs in the technology industry. A huge wave of companies have cut headcount to deal with the headwinds of inflation and shrinking customer budgets. Industry leaders such as Adobe, Microsoft, Google, PayPal and Shopify are making big layoffs, with a large swath of cuts focused on their revenue teams. In January, Salesforce announced it was laying off 10% of its workforce, and it was the sales team that faced heavy losses.

These bootstrapped sales teams are faced with a unique problem: an outsized pressure to produce more with fewer resources. As the downturn continues, many account executives are expected to be selling more and achieving better results in order to help their companies maintain trajectory. Consequently, some may be finding that their leaders are focused on buzzwords like “efficiency” and “effectiveness;” asking them to maintain lofty quotas, even as they wrestle with reduced resources and fewer hands.

At face value, this may seem like an impossible task. But there are ways to tackle the challenge and turn it into an opportunity for learning and growth. And I believe this altered reality is something all revenue-generating teams should adapt to — whether you are currently experiencing layoffs or it’s business as usual.

Based on my time as VP of business development at the venture capital firm Sapphire Ventures, as well as my previous role as a sales and business development leader for Dropbox, here are four strategies that I believe can help downsized sales teams deliver outsized returns.

1. Be ruthless in pipeline prioritization

When your resources are limited, you need to be smart about where and when you use them. For downsized sales teams, this means being ruthless about chasing the right accounts. This is the first area to address when it comes to operating a more efficient and effective team. 

The general rule is to avoid the extreme ends of the spectrum. For instance, it’s often easier to get meetings with prospects in the SME space, particularly startups. Sometimes a sales team will chase these accounts because they offer a chance of quick success and create a feeling of growth. But in times like these, small accounts will often mean higher churn and lower returns, leading to a revolving door of customers and revenue.

On the flip side, exclusively pursuing enterprise deals can be a very difficult strategy for an overstretched sales team. While they have the possibility to be very lucrative, the lengthy sales cycle involved can demand more resources and capacity than you can spare, all with the looming potential for the deal to fall through at the 11th hour. Chasing after only large annual contract value isn’t helpful if it’s draining precious hours from already time-poor teams.

In tough times like these, the smart option is to aim for the middle. Medium-sized accounts are often digital and cloud-native companies that can offer a thoughtful sales process and longer term value, with a faster decision-making process and lower churn. It’s the “Goldilocks” sweet-spot sale; something scaled down sales teams can still nurture, execute and most importantly, close.

To help land the right kind of deals, a data-driven approach to allocating resources and prioritizing the pipeline is key. Tools like People.ai, Gong, Xactly and Clari (a Sapphire Ventures portfolio company) can help teams with predictive forecasting and give granular insights into deal progression so they can make the most informed decisions. In a declining, volatile market, working with the most accurate insights available will make all the difference.

2. Make smarter territory choices

Hard times mean hard choices. For teams with reduced headcounts, that usually means better territory planning. What may seem like a “greenfield” opportunity with a large addressable market could actually be a time-intensive trap in disguise. It’s vital these are avoided when building an efficient structure for a pared-down team. 

It’s time for sales teams to take a good, hard look at their territory activity data and make a new plan for their smaller workforce. This territory plan must focus attention on the right places; teams need to be concentrating their efforts on the regions where they’re actually gaining returns. Now is the moment for sales leaders to be laser focused on account alignment and slow activity in regions which aren’t showing results. As mentioned earlier, with enterprise accounts, this isn’t time you can afford to lose.

Some sales teams may be reluctant to do this, as territory reach is seen as a marker of success. But it doesn’t matter what it looks like on the outside. Trying to operate fully across a large number of territories isn’t an achievement if it’s driving your cost of acquisition up and overall revenue and efficiency down.

3. Embrace the AI revolution

The rise of ChatGPT and release of Bard has ignited new interest and attention into AI and its potential applications in our daily lives. But tools involving conversational AI can — and already are — helping sales teams.

Classic ‘chatbot’ solutions have given the conversational AI sector a bad reputation in some quarters. But there is a new wave of sophisticated solutions out there that can augment the customer experience, drive efficiencies and lead sales teams to win more deals.

Just a few of the platforms leveraging conversational AI in go-to-market efforts include HubSpot and Outreach (another Sapphire investment), which offers call search and analysis to help teams identify key trends and signals while generating actionable meeting summaries and notifications to make work more efficient.

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Exploring conversational AI avenues is a route to help reduced teams expand their operations. With simpler interactions taken by sophisticated tools, salespeople gain back time which can then be reallocated toward more complex and critical tasks. And it’s not just task quantity that these tools can help with; conversational AI can also improve the quality of customer interactions so accounts are better managed and leads are better qualified.

4. Play the optimization, cost-savings card

Sales teams should remember that it’s not just their own resources that may be frozen — their clients’ may be too. Budgets were the first thing to be reduced before headcounts.

In a downturn, maintaining an account becomes an exercise in marketing, positioning and relationships. Teams that want to keep their customers should position themselves as the cost-effective measure needed to help them maintain velocity at a difficult and decisive time. Being your customers’ partner as they navigate headwinds can move your solution from an expendable luxury to a necessity.

As your customers struggle themselves with frozen headcounts and fewer internal resources, emphasizing the cost-saving benefits of your service can mean the difference between retention and churn. Establishing yourself as a solution that both saves money and maintains momentum is one of the strongest plays you can make.

Delivering outsized returns with a downsized team is this year’s challenge, as the market continues to be uncertain and workforces are affected at every level of the economy. But sales teams can rise to it, using key strategies like smart pipeline prioritization, ruthless territory planning, openness to AI and strategic customer positioning to build efficient and effective strategies. Using these headwinds as an opportunity to maximize sales efficiency will be the tactic that can help teams execute, both now and when the macroeconomic dust has settled. 

Abhishek Lahoti leads Sapphire Venture’s business development efforts in the European market, focusing on expanding its CXO network and helping portfolio companies accelerate their growth in the region. Lahoti works on initiatives around thought leadership, CIO and CXO networking, market penetration, GTM best-practices, and more.

Previously, Lahoti led business development in Europe for Dropbox, driving rapid growth of technology and distribution partnerships, all with the aim of increasing revenue through partner integrations and offers. 

  • Originally published March 13, 2023, updated March 29, 2023