What Product Leaders Should be Focused on during COVID19 Crisis

Tami Reiss is the founder of The Product Leader Coach where she works with product leaders and teams to realize their potential by focusing on their strengths.

As CPO in Residence at Insight Partners, I have access to career operators who have managed many companies through crises. The managing directors and operating partners at Insight each have decades of experience helping tech companies thrive, and that doesn’t include the excellent leadership across the portfolio that I get to interact with daily. The items I outline below are a combination of the advice I have heard from the experts at Insight and others in the tech community who I have been lucky enough to learn from.

1) Cash is King

Your first priority needs to be making sure you have enough cash in the bank to survive this crisis. Many companies will go out of business, try your best not to be one of them. Practically every company’s sales are going to slump to near non-existent status in the next few months and many customers will churn, both will greatly impact your runway predictions. If you cannot pay your employees, you are bankrupt, don’t get to that point. Raising money will be very difficult in the coming months. Therefore, it is critical that as an executive, you make hard choices about cuts right now (staff, salaries, bonuses, tools, expenses, etc.) to maximize your runway even without new income. One thing to note here is that the cuts should be thoughtful should be balanced with investing in making your product and teams better (HBR Roaring Out of Recession study). It’s pretty much the corporate equivalent of flattening the curve. You have to survive before you can thrive.

2) Retention should be your primary focus

According to Profitwell (which monitors SaaS for both B2B and B2C companies around the world), new sales are still happening right now, but churn is outpacing it. They call it the Profitwell Growth Index and they don’t anticipate it improving anytime soon.

It’s a general rule that it’s easier (or at least cheaper) to keep a customer than to find a new one. If new sales aren’t going to happen, you need to maniacally focus on retention efforts. It’s OK TO BE THINKING IN THE SHORT TERM, if you don’t you may not get to the long term. The primary thing you can do as a product leader which impacts churn is rolling out features that will quickly impact your customer’s value realization of your product. Generally if your product can save them even more money or time, you’ve got a shot at improving your retention.

Hopefully, your roadmap prioritization process tagged all the feature ideas in a way that you can easily identify those which will impact retention. Clear away the current initiatives that are supposed to help with generating new logos and make room for those items. This is where your leadership will be key. Your role will be to help your product team understand that the grand ideas they have for innovation will come later, but that this is the right decision right now. You’ll also have to help them realize that the more agile and nimble they can be through the “change is the only constant” period, the better the results will be. By reducing their ambition to expand your product feature set, and instead improving what you have, they may just help save your company.

The second thing the product organization can do to help reduce churn is provide offer mechanisms within the product to keep customers who are attempting to cancel. Ever tried to cancel Audible or SiriusFM or quit the gym? They are all experts at this sort of thing. Before you can actually stop paying for your subscription, you must go through a gauntlet of enticing offers to stay. Find a way to give premium add-ons for free and other bundling options which might keep more of your customers. Don’t worry about capping your LTV with unlimited plans or other discounts and promotions, try to get anyone to close that you can. Your goal should be to get to 50%+ of retained customers who were attempting to cancel. Though you can’t control for involuntary churn if your clients go out of business, you can fight your hardest to keep everyone that isn’t.

Finally, even though minimizing churn should be your primary concern, look for opportunities to take your product into new markets that have surfaced which require minimal investment. Also, keep an eye out for easy acquisition targets like smaller competitors that aren’t managing their cash well. Setting yourself up for success after the crisis is over will set you apart.

3) Time is of the Essence

Cliché as that maybe, the longer you wait to make the changes above, the worse your condition will be. No decision is the worst decision you can make. Help your team learn to choose direction quickly and confidently. Ensure that the priorities they are setting forth have impact in a matter of days or weeks, not months.

You will have to shift resources to make that happen, so mentally prepare the R+D team now that current team structure is going to shift to help with quick execution of the most critical initiatives. This is what Ben Foster calls Wartime Product Management. Also, if it’s cost effective, there are a lot of talented people that are about to be out of work. You can hire top tier freelancers to assist you with getting the job done. If you can reduce the time it takes to get a return on investing in something, it may be worth it.

Finally, this is not the time for analysis paralysis. Pull back on your optimization experimentation efforts. The current time period is a spike of fear and uncertainty, especially if your customers are in highly affected industries (tourism, restaurants, entertainment, or retail). Your researchers won’t learn about normal customer or user behavior from experimenting right now. Focus on improvements to your primary user flows that you have good confidence will improve things and roll back only if you’re very wrong.

4) Transparency builds trust

If there was ever a time to over-communicate, this is it. Your employees and customers need to hear from you. The more clear you are with your team about what is going on and why, the more they will have faith in your leadership. Be transparent with them about how change is the only constant. Block off more time so they can reach you if they are stressed or have questions, they can’t stop by your office right now and knock on the door. When you model strong communication, they will follow suit with their teams. In the case that something is very wrong (i.e. someone on your executive team contracts COVID-19) have direct communication with your employees about it and the actions you are taking; don’t let them find out in the Washington Post.

The same goes with your customers. Be clear with them about the actions you are taking to serve them during these uncertain times. Empathy will go along way. Pause and update all of your automated marketing to make sure the messaging and positioning is appropriate for the current situation. You want your customers to feel that you are with them through this crisis, not tone deaf to what’s going on. This may also mean delaying a product launch if you think it might be disruptive to your clients’ efforts to survive right now. If you do change release dates, explain why and offer beta access to anyone who needs the feature sooner. Your customers will understand that you are in this with them and remember that when it’s all over.

5) This too shall pass

This maybe your first crisis to navigate as an executive, but it will not be your last. Consider it training for the next time something unexpected happens that impacts your customer base. Here’s a little preview into the next year or so…

• There will be a few more months of the current everything is crashing and burning phase. It will get worse before it gets better.
• Then there will be a period of a new normal of the recession.
• Finally, the recession will end and economic prosperity will return.

Your #1 focus (after the obvious staying safe) is on survival and getting through the first two phases above with as many customers and as much cash as possible. If you accomplish that, you will be part of the few companies left to serve the post-recession economy.

Good luck and God speed!

Hi! I’m Tami, the founder of The Product Leader Coach where I work with product leaders and teams to realize their potential by focusing on their strengths.

If you enjoyed this post, I am available for product leadership coaching or team training. Learn more about my services and upcoming children’s book.