After the longest expansion in U.S. history, the economy appears to be softening. In Europe, it’s already slowed and the balance of the global economy is teetering on the brink of recession.
The doom-and-gloom prognosticators will recommend heading for the hills. But, by all indications, we are entering a slowdown, not a recession. The economy will continue to grow, albeit more slowly and with it comes opportunity.
For sales leaders, this means it’s time to change your strategy and tactics — both so your firm succeeds during the downturn and prepares for the inevitable economic recovery. Here are my three recommendations for selling in this environment.
Recommendation 1: Accommodate changing customer behavior
Customers behave differently in a slowdown than they do in an economic boom or bust. Your sales strategy should be tailored to this reality.
- Customers will still spend, but they’ll spend differently. In a slowdown, spending does not stop; it shifts. Customers will focus their spending on maintaining existing operations and driving out system inefficiencies.
- The number of shoppers will exceed the number of buyers. There will be plenty of customer activity, but it will be clustered at the top of the sales funnel. Customers will spend more time researching, educating and evaluating opportunities before making a purchasing decision.
- Financials will drive decision-making. Customers will want to hear less about your product or service’s features, and more about how it will benefit them financially. Their focus will be on return on investment (ROI), savings and tangible benefits to their bottom line.
Recommendation 2: Shift your tactics
To survive a downturn, sales teams should pay attention to customer service and retention rates. But to thrive in a downturn, sales teams need to embrace these contrarian tactics.
- Increase demand-creation activities. There are active buyers in the market; you just need to find them. Instruct your sales teams to cast a wider net so they can meet with more prospects earlier in the cycle. Now is the time to sharpen lead definitions, lead scoring and qualifications metrics; to ensure seamless hand-offs between marketing and sales; and to tighten your inspection process so every qualified lead gets the attention it deserves.
- Change your message. Your messaging needs to match the moment. Shift the emphasis of your sales pitch from increasing revenues or market share to increasing operational efficiencies and containing costs. Update your marketing and sales materials for financial buyers by including total cost of ownership and tangible ROI statements. And make sure there is alignment in communications across the sales organization.
- Sell parts instead of the whole package. Buyers are more likely to be wary of big-ticket-items or new suppliers in a slowdown. Take advantage of this mindset by partnering with current customers to optimize existing products with add-ons and complementary components. Create new sales materials focused on cross-sell and up-sell opportunities. Consider short-term compensation and recognition programs to motivate salespeople.
- Equip your salespeople with new training and tools. Prospects are going to start asking tougher questions, raising new objections and demanding deeper concessions. To prepare your salespeople for these challenges, provide them with more training, collaboration tools and knowledge resources.
- Focus on the quality of interactions. In a downturn, it’s not enough to focus on sales results. Go deeper by monitoring lead follow-ups, cold calls, first appointments and proposals to ensure sufficient activities are taking place. To improve the quality of interactions with prospects, give salespeople access to high-quality sales content, encourage collaboration with subject-matter experts and provide good old-fashioned sales coaching.
Recommendation 3: Develop your salespeople’s “survival skills”
Now is the time to invest in your people. By developing new sales competencies, you will enable your sales teams to prosper in hard times and position your company for growth once the market rebounds.
- Train your employees for ROI selling. Work with your marketing team to create and communicate a framework that justifies costs based on ROI, and then train your salespeople to use it. If you need more sophisticated applications, consider investing in ROI tools developed by external vendors. These tools can also help you develop a stronger business case for buyers.
- Encourage reference selling. In a soft economy, the best way to reduce buyer hesitancy and risk avoidance is by sharing the success of current customers. Develop a reference management program to help salespeople pull together references quickly, improve the quality of references and ensure that references don’t become fatigued.
- Improve negotiation skills. As customers become more price sensitive, salespeople often like to discount to keep a deal moving. However, this strategy can hurt your margins. To remedy this, offer your salespeople a negotiation skills module or seek out negotiating consulting. In addition, consider creating a strategic pricing team — comprising sales, marketing and finance leaders — that can facilitate special deals and provide a valuable window into the market’s real-time dynamics.
In an economic slowdown, salespeople who acknowledge and adapt to new realities will thrive, while others will merely survive or make excuses. Embracing tactics best suited to your environment and accommodating new purchasing dynamics will help your sales organization optimize its performance. It will also position your firm for success when the economy eventually recovers — as it always does.