Operational Truths: When a Free Pricing Strategy Killed Subscription
Every company has moments where things don’t go as planned. In this series, we share real stories, anonymously, and what we can learn from them.
One company built its entire business through indirect sales channels. When leadership decided to switch to a direct sales strategy, the impact on the sales cycle and revenue runway was dramatic.
Every deal went through partners, and the “sales team” consisted of partner managers. They were excellent at nurturing relationships, but had little experience hunting new business.
During an investment round, the board decided to change course completely and move to a direct sales model.
The company hired experienced enterprise reps. They were expensive and often brought additional support staff to process deals.
Before the shift, the average sales cycle was 3–6 months.
After the shift, it stretched to 12–18 months.
Within a short time, the company’s investment funds ran dry, and they had to cut half the staff to survive.
Takeaway:
Major changes to a sales strategy or go-to-market model require careful risk assessment, especially for startups with limited runway. And in startups, success often depends on people who thrive in fast-moving environments, not just impressive resumes.
Seen something similar?
Send us your story at hello@norriva.com. We’ll share selected ones anonymously in future posts. Everyone who submits will be entered into a lottery to win a copy of The Norriva Go-To-Market Recipe Book.