Written By: Rich Mesch
June 30, 2022 – 6 min read
If the last few years have taught us anything—change is constant. An agile business model that can rapidly adapt to changing market conditions separates leaders from laggers. Many forward-thinking leaders shifted their business strategy during the recent pandemic to engage customers in new ways. Likewise, with the threat of a potential recession looming, you have one of two choices—give up or step up.
According to MSNBC and the former Federal Reserve Vice-Chair Alan Blinder, there’s a 50% to 60% chance of a mild recession in 2023. As we saw during COVID-19, leaders who were able to adapt quickly and plan effectively achieved higher success levels than their competitors in the same timeframe.
During the financial crisis of 2007-2009, you may have experienced first-hand the challenge of trying to drive revenue growth amid much economic uncertainty. More than a decade later, and on the coattails of a three-year global pandemic, sales leaders are now looking at adaptive strategies to accelerate growth during a potential economic downturn.
Recession-proof your sales organization with these four strategies:
During a downturn economy, look for ways to reduce spending. Procurement plays a significant role in driving down vendor costs. Budgets are more scrutinized, and every dollar spent is put under a microscope. As a result, your team will likely see an increase in the number of proposals going to bid, even with clients with whom you have an established relationship. This extra activity translates to slower sales cycles and introduces competition where there was none.
Create a Sales Scorecard
Before chasing every RFP that lands in your inbox, develop a scorecard that evaluates the likelihood of winning a potential piece of business. When creating these criteria, consider the following:
When you set requirements to determine “bid/no-bid,” you can save your team hours, days, or even weeks of unnecessary work. By setting specific criteria, you avoid pursuing deals with a low probability of winning and focus resources on the most viable opportunities you have.
If you want to impress executive-level decision-makers, ensure you are laser-focused on the outcome, impact, and future state of what your solution will provide their organization. This will help you stand out from most sellers who focus solely on features/benefits and not impact. Yes, detailing features and benefits are essential, but the message should be the future state of what your product/service will help them achieve.
Lastly, provide a real ROI with evidence to back it up. The clearer and concise your ROI modeling is relative to their worldview, the better the chance to win the business. A word of caution on ROI: many sellers become too aggressive and promise that if they buy the ‘x-y-z’, the client will achieve spectacular results with little or no evidence to support it. Be judicious, realistic, and conservative in your approach to ROI, and you will increase your chance of standing out and showing your in-depth knowledge of their business and your solutions.
When business is good and leads are flowing, it’s easy to become more relaxed around your sales process. However, during a recession, it’s even more critical to follow your procedures and be flexible to the changing market conditions and buyer behaviors. When budgets are being scrutinized, more people become involved in decision-making, introducing additional complexity and time to the sales cycle.
To ensure set yourself up for success, consider following these tips:
By following a disciplined sales process, sellers will gain agreement more effectively among multiple buying influences, build and communicate maximum value for each buyer, accelerate the sales process, and minimize the number of deals that result in losses or no decisions.
During a recession, it’s even more critical for sales teams to focus on current clients. It can cost as much as five times more to find a new client than to retain one. Also consider that the probability of closing business with an existing customer is 60-70%, while the likelihood of closing a deal with a new prospect is between 5%-20%. In an economic downturn, it can be the death of a sales quarter or even a year by losing a high-value client, and even more challenging to make up the deficit in a slow economy. Most sales organizations spend only 18% of the time on retention/client relationships versus 44% on new customer acquisition.
During an economic slump, consider the following strategies to strengthen relationships and identify new avenues of growth within an account:
Account planning meetings can yield surprisingly great results with additional insight and increased collaboration from the broader engagement team. Often, customer service or project leaders have more frequent communication with a client after the sale and can offer valuable information that could otherwise go unnoticed without a monthly account planning meeting. It might take additional time to initiate the first one, but they require minimal effort, and the reward always outweighs the effort.
Selling effectively during a recession depends on many factors; however, the list above represents practical and easy-to-implement approaches that you can implement now to create impact.