One of our top vendors just got a new CRO
He got on the phone with us and said he was doubling pricing because "their costs are up". No heads up, just to make his plan.
Now, we are looking at their competitor.
Before … we weren't.
Worth it for them?
TBD
— Jason ✨Be Kind✨ Lemkin 🇮🇱 (@jasonlk) March 14, 2024
So we had yet another uncomfortable renewal call the other day. This one, with a vendor where we’ve been a case study on their website for 5 years. Where we’ve referred them tons of other customers. Where we are already one of their 5 largest customers. One where we helped them spec, architect and ship one of their top product enhancements.
The renewal call wasn’t going to fun in any event. It’s 2024. Every renewal call is an attempt to just raise prices. But this one was worse: a new CRO joined the call.
“We’re doubling prices”, the CRO said.
What? We asked why. He said “inflation”, and that “our costs are going up”. OK, but double?
We asked him if he knew we were a reference account. He said, “No, I’m still getting to know the business”. I see.
We asked him if he thought doubling pricing with zero notice was fair. He said, “It doesn’t matter.”
Yes, this sounds awful, and it was awful. But it was his job. A new CRO that owns renewals and upsells at a business whose growth has slowed is going after your top customers. Like a heat-seeking missile. If new deals aren’t closing, and there is pricing pressure, the obvious target for the new CRO is actually your top, largest customers. Get them to pay more. That moves the needle the quickest in tougher times.
So here’s my basic point, the impacts from this new CRO’s strong-handing a large existing customer:
- First, we haven’t renewed yet.
- Second, we reached out to their competitor that day, that we haven’t talked to in years. So this CRO, if nothing else, put the deal into play with a competitor. If they hadn’t forced us to do a call and try to double pricing? We never would have looked. We would have just paid.
- And third, we’re gone as a reference forever.
Is all this worth it? It is for the CRO. He has to put points on the board this quarter, and he’s got a tough hand.
But is this good for the vendor overall? I’m really not so sure.
Go long. And sometimes, these days, you can’t fully trust a CRO or sales team or renewals team to do the right things. You gotta get more involved. The short-term pressures are just too intense.
A related post here:
4 Recent, Very Bad, Truly Terrible Customer Success Experiences. Just This Week.
(payup image from here)
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Jason Lemkin, Khareem Sudlow
