AUGUST - 2023 9GOVERNMENT CIO OUTLOOKor service may need to change. CAC payback should be your north star. Every company will define an efficient CAC payback differently. We like to see it less than six months and, ideally, on first purchase. If yours is greater than 12 months, your opportunities to grow may be hamstrung by your cash balance. 4. Maximize expansion opportunities with current customers. This can be the least expensive way to increase revenue. Although you're limited to your current customer universe, maximize these opportunities first as they are less expensive than new customer acquisition.5. Reach out to your customers to get their candid feedback about your product and suggestions for improving it. Listen to what they say and focus on common themes you hear. Incorporate this feedback into your product. First goal: make your product a must-have for current and potential customers, something they simply can't live without. This will not only improve customer satisfaction but also help attract new customers. Second goal: improve customer retention. When customers know that you value their feedback, and may incorporate some of it into your product, your logo retention will likely increase. 6. Reassess your cash flow projections to ensure that they are realistic in today's environment. Clean up your sales pipeline, getting rid of dead leads. Make sure your sales team is focused on the leads with the highest likelihood of closing. 7. Keep your investors updated and ask for their assistance. Many founders have a tendency to only share good news with their investors. Fight this urge. Your investors will be much more understanding than you anticipate and are eager to help you. 8. Take a close look at your vendor relationships and identify opportunities to renegotiate payment terms. Your vendors all understand the challenges of today's market (after all, they are going through it too!) and want to keep you as a customer. Ask them for better payment terms. Doing so could provide you with additional runway. 9. As the saying goes, "buy when there is blood in the streets." An economic downturn with a tight fundraising climate is an ideal time to acquire a company on attractive terms. Look at competitors and other companies that are complementary to yours. If you can acquire them for little or no cash, you may not only be able to enhance your revenue and product mix, but also add valuable team members with relevant industry experience and contacts. 10. Explore alternative funding sources. As traditional funding sources dry up, it's important to explore alternative funding sources. This might include crowd funding, grants, and revenue-based financing. Fortunately, more of these sources exist today than ever before. 11. Leverage technology. Technology can be a powerful tool during an economic downturn. Look for ways to automate processes, reduce costs, and increase efficiency. This can help you weather the storm and position your business for growth when the market improves. 12. Stay positive. Remember that tough times don't last, but tough people do. Stay focused on your goals, stay nimble, and stay optimistic. With hard work and determination, you can survive and thrive during even the most difficult times. Use this moment as an opportunity to build, a stronger, leaner, and resilient company. Following these action steps can help you protect your startup and ensure its long-term success. The greatest danger in times of turbulence is not the turbulence -- it is to act with yesterday's logic.
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