Smart Sales: Powering Through the Recession
July 14, 2008
Fall back on creative strategies, and avoid hitting the panic button
By Dave Stein
There's plenty of disagreement over how best to label what's going on here in the U.S. Well, I'm no economist, but let's not split hairs: We're presently in a recession.
I've been through a few of them before (most recently, the collapse of the dot-com bubble) and they're most assuredly not fun. But with a down economy comes opportunity, assuming you know how to properly leverage it.
Consider the following strategies, all of which I've learned from the best-of-the-best VPs of sales. These require courage to execute because they're bold and, in a few cases, counterintuitive:
• Take a serious look at reducing your SG&A (sales, general and administrative—a P&L statement expense item) by cutting the bottom 10% to 20% of your sales team. Reps who haven't been productive through a strong economy won't be productive during a recession. You already know who these people are. You also know that if you keep these people aboard, especially now, the drag they put on the rest of the organization will be multiplied. Sit down with your HR director, put a short-term plan together and execute. I've been on both sides of this situation; it's painful for all parties involved, but it needs to be done.
• Be on the lookout for top sales reps from your competitors' companies who may be ready for a change. Backfilling your now-open territories with strong reps will enable you to make the most out of the down economy, as well as to be in a good position when business picks up again.
• Provide your salespeople with some tactical training and ongoing coaching so they are comfortable (and credible) discussing the current economic situation with executives—specifically, the impact it is having on the industries into which you sell.
• Present your salespeople with new approaches for getting access to targeted executives who are busier than ever before. Add to that step-by-step guidance on how to uncover those executives' specific recession-related challenges. Again, training is required here, but it's a wise investment.
• Provide coaching on building recession-tempering value propositions that will compel the customer to buy. Your prospects and customers will perceive value differently during a recession. If your marketing and salespeople don't understand these changes, their pitches will fall on deaf ears.
• Market and sell to new businesses only within your sweet spot, unless there is a compelling reason not to. Expanding into new geographies and markets is costly in terms of time and money.
• Don't arbitrarily eliminate line items from your marketing budget without carefully assessing the impact. I've seen companies pull out of important industry trade shows, only to find their competitors raising financial viability issues about them with prospects, resulting in lost sales. Another example: If you've already been building momentum through marketing initiatives around branding or increasing market share in certain territories, think twice about stopping entirely. It may cost you dearly to recover that momentum next year.
• Help your customers to buy from you. Reconsider payment terms, like minimum quantities for ordering. Since selling to existing customers costs considerably less than new ones, pass some of your margins back to the customer in ways meaningful to them—additional support or a product upgrade, for example.
We may be in a recession, but that's no reason to panic and make hasty decisions. Consider all reasonable possibilities. Make no mistake: The actions you take now will determine how your company will fare when we come out the other side.
Dave Stein is the author of "How Winners Sell" and CEO and founder of ES Research Group in West Tisbury, Mass (www.esresearch.com). He can be contacted via e-mail at edit@salesandmarketing.com.
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