CRO EJ Freni On How To Successfully Navigate A Recession Or Challenging Economy
For those working in Revenue Operations, high inflation or signs of a possible recession can be worrisome. But even during a challenging economic environment, there are steps one can take to try and ease the blow. What are the strategies that CROs and financial experts recommend to successfully navigate a recession or challenging economy? As part of this series, we had the pleasure of interviewing EJ Freni.
Thank you so much for your time! To start, can you tell us a bit about your ‘backstory’ and how you got started?
I’ve been in the Digital space since 2005, working at a mix of big companies like Yahoo! and Adobe, and smaller startups at different stages of growth. I love working with enterprise marketers and their partners to understand their unique challenges and coming up with solutions. Marketing, advertising and all things data have always been a passion of mine and I enjoy how fast paced this industry is. There is always something new to learn and someone new to meet.
How did I come to Claravine? I had overlapped with Verl Allen, our CEO, and Chris Comstock, our CPO, while at Adobe. Chris and I worked closely together on the Audience Manager (Data Management Platform) business and he reached out back in early 2019 to let me know about his decision to join Claravine. Eventually that led to a meeting in NYC with Verl and Chris, where they walked me through the value proposition and business in general.
I was shocked that no one had developed a solution to solve the data standardization problems Claravine is uniquely positioned to help with. Verl, Chris and I spent some time talking about ways to take the solution to market, one thing led to another and I joined the team in January 2020.
It has been said that our mistakes can be our greatest teachers. Can you share the funniest mistake you made when you were first starting?
This goes back to one of the first meetings I had with a Marketing Executive while I was at Yahoo!. I was still early in my digital career and spent countless hours prepping for my presentation to this contact and her team. I had the presentation and the story down cold. I was so confident in the solution we were about to present and the slide deck we had prepared with product marketing.
Right as I started to get into a great rhythm in the conversation and meeting, the customer stopped me at the first slide that had industry data on it and asked where the information was sourced from. The meeting went to a screeching halt for about 30 seconds of uncomfortable silence as I stared blankly and admitted I wasn’t sure where the data came from. I had missed this critical part of preparation and didn’t think to ensure every slide that referenced third-party information or industry stats actually had the source material referenced.
To her credit, the contact used this as a teaching moment and advised me to always make sure the data is sourced. The presentation still went on to be successful and I thanked the customer for her advice. What I learned that day was that you can never be too prepared for a meeting and paying attention to every detail in the material you are representing is vital.
I still think about this meeting any time I prepare for a presentation or when we are developing a new set of market material. In the moment, this might not have been the funniest situation, but thinking back on the meeting I cannot imagine what the audience was thinking as I stared blankly into the abyss for a good 30 seconds.
None of us are able to achieve success without some help along the way. Is there a particular person you're grateful for that helped you?
I’ve been fortunate enough to have worked with so many great people over the course of my career that I could list a number of very influential people that have helped and made an impact. I will say that my first manager in my first sales role, Jim Chisholm, was really instrumental in helping me get my career going. Jim took me under his wing right out of college and gave me a great business foundation, including a big focus on essential business best practices and meeting preparation.
He challenged me very early on and put me in client meetings and negotiation situations that most entry level sales people would have to work years before they get the chance to experience. Some of it was “trial by fire” for sure, but the experience really accelerated my business sense early on in my career and I still think about many of these early experiences when I approach my work today.
Can you share a time that was challenging for your business based on external factors like the economy?
I’m sure you have heard this from many of the people you interview, but one of the most challenging experiences was starting a new role right as the Pandemic changed the world. I started at Claravine in January 2020 and just about 3 months into the role, the entire world shut down. We had to think quickly as a company and as a leadership team and make some very difficult decisions. At the end of the day we knew we had a great business and amazing customers, so the company rallied around “protecting the house” to ensure we could make it out to the other side of the economic slowdown that ensued.
I don’t think anything can prepare you for this type of situation, but the leadership team came together immediately and focused on making decisions to protect the businesses long term health and to ensure our customers were getting the support and help they needed in uncertain times.
Was there anything about the whole experience that surprised you? What was your expectation and what was the reality?
I think the most surprising thing initially was how the pandemic completely changed the way we needed to engage with customers and our employees in an instant. I had just been to a customer on-site the days before the travel shutdowns started to happen and things really started to shut down in general. Gone in a flash were on-site meetings and in-person time with customers, prospects and employees. We had to quickly learn how to communicate over video calls.
Is there anything you would do differently in future downturns? What would be your advice to others navigating a recession for the first time?
My advice to business owners is to make proactive scenario planning a part of your operations and general strategy. Always be prepared to assess the business and talk through different scenarios and potential unknowns or threats even when the business is growing and seems to be in a great place. Doing monthly or at least quarterly business reviews and retrospectives across teams is very important.
Do you believe that businesses can prepare in advance for such occasions? Is it about being appropriately proactive or reactive?
Businesses must take a proactive approach to these situations. It can never hurt to have a contingency plan in place or talk about threats to your business, even in times when things seem to be going incredibly well.
In your opinion, what is the telltale sign that a recession is looming?
I typically trust the standard definition of key indicators of a recession looming: a period of economic decline, characterized by a decline in gross domestic product (GDP), employment, and trade.
What are your thoughts on the current state of our economy? Is there anything you’re anticipating or preparing for now?
The current state of the economy is a mixed picture. On one hand, many indicators such as GDP growth, employment, and consumer spending have been recovering since the pandemic-induced recession in 2020. On the other hand, there are still challenges and uncertainties such as inflationary pressures, supply chain disruptions, and other challenges that need to be addressed.
Based on your experience, what are the five most important things a business should do to successfully navigate a challenging economy?
1 . Effective Cost Control - closely monitoring and controlling costs, re-evaluating expenses, renegotiating contracts and finding more efficient ways to operate the business. Even things like reviewing the travel and expense policy can make an impact.
2 . Innovation - Encouraging a culture of innovation can help businesses stay ahead of the competition, especially in challenging economic times.
3 . Flexibility and the ability to adapt - Businesses that are flexible and able to quickly adapt to changing conditions are better equipped to weather economic storms
4 . Diversification of revenue streams - Diversifying a business's offerings, customer base, and revenue streams can help insulate it from economic downturns
5 . Strong Cash Flow Management - Good cash management is essential in any economic climate, but it's especially important in challenging times. This might involve conserving cash, improving collections, and reducing outstanding debts.
Can you share some of the most common mistakes you've seen other businesses make in difficult times? What should one keep in mind?
- Cutting costs without considering the long-term impact: In an effort to conserve cash, many businesses make hasty decisions to cut costs that may hurt their operations in the long run. For example, reducing marketing or research and development budgets may seem like a good idea in the short term, but it can harm the business's ability to compete and grow in the future. To avoid this, you need to prioritize cost cutting measures that won't harm the company's long-term prospects.
- Neglecting customer relationships: In difficult economic times, it can be tempting to focus inward and prioritize cost-cutting measures over customer service and support. However, neglecting customer relationships can harm the business' reputation and customer loyalty, which are critical for success in the long run. To avoid this, businesses should continue to invest in customer relationships and strive to deliver high-quality customer service.
- Failing to stay up-to-date with industry developments: In a rapidly changing economic environment, it's important for businesses to stay informed about industry developments, tools and trends. Failing to do so can put a business at a competitive disadvantage and make it harder to adapt to changing conditions. To avoid this, businesses should make a concerted effort to stay informed and attend industry events, read trade publications, and network with other professionals in their field.
- Not seeking outside help: Finally, some businesses make the mistake of thinking they can weather economic difficulties on their own. However, seeking outside help, whether in the form of professional advice or additional funding, can be critical to navigating challenging times. To avoid this, businesses should be open to seeking assistance and support when they need it.
What would you say is the most critical role of a leader during challenging times?
The role of a leader during challenging times is crucial and can have a significant impact on the success of an organization and the well-being of its employees. You need to provide guidance, stability, and support to the team and organization all while making informed and effective decisions that will benefit the team and organization in the long run. Great leaders communicate openly and transparently with their teams, show empathy in difficult situations, make difficult decisions quickly, adapt to change and inspire others even in tough times.
Lastly, are there any silver linings or opportunities that can come out of a recession? We’d love to finish on a positive note!
- Cost savings: Recessions can provide an opportunity for businesses to renegotiate contracts and reduce costs, which can lead to increased efficiency and profitability in the long run.
- Acquisition opportunities: During a recession, many businesses may struggle and be looking to sell, providing an opportunity for other businesses to acquire them at a lower cost. This can help expand a company's reach and capabilities.
- Market share gains: In a challenging economic environment, some businesses may struggle and go out of business, providing an opportunity for others to gain market share and increase their footprint in the industry.
- Innovation: Recessions can be a time of increased creativity and innovation as businesses look for new and better ways to serve their customers and stay afloat. This can lead to the development of new products, services, and business models that can drive growth in the long run.
- Talent acquisition: In a recession, talented employees may be more likely to be available for hire as companies downsize or go out of business. This can provide an opportunity for businesses to build a stronger and more talented workforce.
How can our readers further follow your work online?
You can stay up to date with Claravine on our website, or by following us on LinkedIn!
