Episode 022: Recovering in a Downturn with James Avery
While we hope that every episode of the SaaS CX Show is prescient for CEOs and founders, today’s episode With James Avery is far more relative to today’s marketplace than most other times. With the novel coronavirus shuttering many companies and forcing brands to cut back or shut down entirely until the worst has passed, we thought we’d talk about recovering from a downturn.
James Avery is the founder and CEO of Adzerk, which he bills as the “Twilio for ads.” Rather than rely on a third party like Facebook or Google to run your marketing campaign, Adzerk enables you to build your own platform. We talked a bit about the need for such integration, as well as how businesses can turn misfortune into a long-term planning strategy.
Here are some highlights from our conversation.
Avoiding the Digital Serfdom
Adzerk really came about because of the need for companies to remove their dependence on third-party platforms. While Facebook and Google are useful in many cases, the reality is that your business exists at their disposal. You could be making big money right now, but a single update or rule change can kick your brand to the curb. If that does happen, you might lose massive amounts of revenue overnight, through no fault of your own.
James calls this digital serfdom, although I’ve heard it as digital sharecropping. Regardless of how you name it, the gist is that you can’t rely on other people to help grow your business. Essentially, you’re outsourcing your profits, which can become highly dangerous.
It is a bit of a conflict of interest to recommend Adzerk to get around this problem, but as a business, you need to become much more autonomous. Basically, what happens if your keywords suddenly don’t work for SEO, and you have to start from scratch? You need a plan B. That brings us to our next segment-
Preparing for the Worst
Fortunately, James Avery is in a valuable position to provide detailed insight into how a company can recover from a major downturn. As he recalls, about seven years ago, when Adzerk was in its infancy, James and his team booked a substantial client. While that business paid for the first month, they were still using the software but not paying the bills. When James realized what was happening, it was a shock to the system.
Seemingly overnight, he had to turtle up – protect the most valuable assets of the business while trying to avoid the worst damage and survive. So, the management team got set on cutting costs and increasing revenue. Here are the tips he shared from this do-or-die moment.
Utilize Your Existing Customer Base
If you’re a startup, you may not have many customers, but it’s always better to sell to someone who knows the brand than attract a new lead. While that doesn’t mean you should jack up prices, you can talk to your customers about potential revenue streams.
For Adzerk, salvation came in the form of another high-ticket client. However, they wouldn’t be ready to launch for four or five months. So, the trick was to figure out how to stay operational until then.
Don’t Nickel and Dime Your Costs
For whatever reason, perks are always the first thing to go, such as snacks in the breakroom. However, while this would make sense from an individual standpoint, it doesn’t do much for your business. Saving $200 a month on snacks isn’t going to right the ship – you have to focus on the big costs first before worrying about the little things.
Not only does keeping small perks make financial sense, but it can help improve morale. Your employees are going to have to work hard during the downturn, so you want to make sure they’re happy. If they’re miserable the whole time, it’s going to make the situation so much worse.
Finally, if you cut perks, then staff members see that you’re focused solely on the numbers, not the value. Then, if you ask employees to go beyond their job description, their response will be, “how much more am I going to make?” Perks show that value isn’t relegated to only money, and your staff will return the favor.
We talk more about how James Avery and Adzerk were able to survive their first big test, so check out the episode here. You can also find out more about Adzerk at www.adzerk.com.