Never Have a Tough Conversation Over Email

So perhaps the best management advice you’ll hear again and again is this:

#1.  Never Have a Tough Conversation Over Email

Yes, you probably know this.  As tempting as it may be to avoid conflict, headaches, and hearing things you don’t want to hear — never have a tough “conversation” over email.

And yet, most of us only half listen. And these days, when almost all of us run distributed teams, this advice is ignored again and again. We’re all so used to communicating all day on Zoom and Slack … that why shouldn’t tough news be delivered that way?

Well, the reason is there is almost 100% chance it will be misinterpreted.  And there’s zero chance to inject any human element into things.

Now, there are a few exceptions. If you have to fire someone for clear issues, email is probably a better way to do it. It makes sure the problematic employee knows for sure the relationship is over.

The bottom line is email “conversations” are ripe to be interpreted in the most negative of ways.  And they can break relationships instantly — that were never intended to be broken.

Be careful.

You can take back almost anything said in person, at least in a business context.  But it’s really, really hard to take back an email.  Almost impossible.

And a few other basic Unforced Management Errors — that we all still make.  Including me.  At least be aware of them, and break these rules intentionally.

Let’s start with one important learning: angry customers usually aren’t lost customers. If they’ve already decided to leave you for another vendor, they generally just go dark instead.

So you still have a shot not just to save them and keep them, but turn it around.

A few basic thoughts:

• Have the CEO talk to them — and if possible, make a commitment to fixing one issue (even if small). This isn’t magic. But customers do appreciate talking to the CEO. Especially if she or he commits to solving at least one big headache.  This is 100x better than the CEO hiding from the issues.
• Let them vent. The customer isn’t always right. But the fault is always yours. Sometimes, they just need to be heard.
• Share your product roadmap 1-on-1 with them, at least 1–2 times a year. This gives them a chance to provide input.  And also, even if they are unhappy, is shows maybe there’s enough coming down the road that it’s not quite worth the effort to really work on switching.
• Give them your mobile phone number. A classic tactic to show you care. Salesforce used to put custom physical “hotlines” in the offices of their largest customers. You picked it up, it connected you directly and immediately to top-tier customer success.
• Invite them to your VIP customer advisory board, if they are a Top 10 customer. This engages them more. It’s almost always appreciated.
• Go visit them in person (if you can). Now that we are returning to in-persons meetings, go get on a jet (vaccinated) and go meet them. This almost always saves an angry customer and restores some trust.

Up Next: Wednesday, January 24th @ 10AM

Topic: Dropbox, Klaviyo, Lightspeed Commerce: 10 Things that Change in Marketing as you Scale

Speaker: Kady Srinivasan, CMO @ Lightspeed Commerce

Workshop Wednesdays is new series where we’ll be bringing some of the best SaaStr speakers to you LIVE, every Wednesday. 

Each workshop will be hosted in a live, interactive 30-minute format at 10am Pacific each and every Wednesday. This workshop will be 100% LIVE, not pre-recorded, and will be hosted in an, interactive 30-minute format, including Q&A.

My advice: Don’t.

It’s too many calories expended for not enough benefit.

Let me explain what I mean …

Large customers only pay via invoices, especially for any deal of any material size (>$10k a year).

Invoices have their own annoying set of characteristics (they can be Net 60+, you have to deal with procurement, etc.). But. Usually, you can get an annual deal here. The last thing a VP in a Fortune 5000 company wants to deal with is credit card payments or monthly invoicing. They want to budget annually for stuff.

The smaller the customer, the more important micro-cash management is. And the smaller the price per month, the more practical is it to put it on a credit card.

So products that are < $99-$299 a month, many if not most of your customers will pay monthly.

So what do you do to maximize annual prepayments (which you do want)?

For smaller customers, offer a 20% discount for prepaying annual. The folks that care about price will take it. The folks that care about micro-cash management won’t.

For larger customers, make annual contracts the default, once you’ve gotten a few under your belt. But — you may need a good VP of Sales to help you make this stick, so don’t be too dogmatic here until you have a real VP.

And incent your sales reps to close annual deals, with either a larger commission, or a smaller one for non-annual deals, and/or clawbacks on any deals that don’t last a year.

In many ways, our sales skills have arguable atrophied the past few years.

 In the peak Go Go Days of 2021, sales wasn’t exactly easy, but it was often closer to order-taking than we’ve seen in a generation.  Budgets rapidly inflated, and many inbounds were ready to buy before the first call.

Fast forward to the last 12-18 months, and at least for some, sales has gotten so much harder that we’ve lost a bit of our way, from overdiscounting (bad) to threatening prospects (very bad) to threatening existing customers to upsell (worst of all).  

Have we lost the picture?  

Is sales still first and foremost, the guide and ally of the customer in SaaS?

With that, it seemed time to dust off our Top 10 Simple Tips to Close More Customers. They work especially well now.

I struggled with this myself a bit in the early days, in my first start-up job.  I realized once I was an exec for the first time that a lot of us we working just as hard as the founders. At least, a few of us were. No way I deserved to make as much. 

But were they really doing so, so much more than the rest of us?

Yes.

Because, in the end, the CEO is the one responsible for the entire plan. Everything. ALL the revenue. ALL the profits.

That includes … everything. Hiring the entire management team. Getting everything right that matters. Taking enough of the right risks.

And at that level, you get power law effects when the CEO delivers.

If a SaaS company under a great CEO grows from say $1m to $100m in ARR … the valuation and value could easily grow from $10m to $1b.

That’s $990,000,000 of added value — when done right.

A lot of CEOs don’t deserve their pay packages. There is a lot of room for disalignment and issues. It can seem crazy how much more a CEO can make than a top engineer or marketer or support professional working almost or even just as hard. Sometimes, market pull really matters more than what any CEO does, especially in the short-term, and especially in B2C.

But at the end of the day, someone has to be responsible for adding that $990,000,000 in value. Someone has to be in charge of getting that done.

That’s the CEO.

And a founder CEO? You’re not only responsible for all that.  But you also can’t quit. You’re always responsible. Forever.

That’s a unique job.

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