Sales During a Recession: Navigating Uncertain Waters

It's not an easy time to sell. Customers are postponing purchase decisions. Decision-makers are harder to reach and may not be receptive to sales pitches. Individual organisations and entire market segments have shifted priorities. More decisions are being made based on price. Having recovered from the initial shock of recession, companies in Poland are trying to determine how to act in new market conditions.

There are a number of core principles that can help sales leaders navigate these troubled times:

• Focus on the customer: It's more important than ever to cultivate strong customer relationships. A customer-oriented (not product-oriented) mindset should permeate your sales activities. No one would argue that building loyalty in your client base does not increase sales over the long term. But earning that loyalty takes discipline and a mandate that allsales activities reflect this mindset.
  
  
• Set a clear strategy: When competing for the same dollars, the better salesperson wins. Salespeople cannot succeed as "order takers", counting on a prosperous market to provide opportunity. Rather, sales must be cultivated in a methodical, logical manner. When the environment is in flux, a clear strategy for markets, for accounts, and for the sales organisation as a whole is critical. Only with these tools can sales organisations be flexible, adapting to changing conditions while maintaining progress toward goals.

Lessons worth revisiting

Fortunately for leaders today, the lessons learned by the sales organisations in the 1980s and 1990s are well documented and accessible:

• Prepare for the next wave of prosperity: Previous recessions forced sales organisations around the world to re-examine themselves. Many began to restructure around the customer rather than their own products. The resulting paradigm shift was enacted throughout corporations, with a notable impact on sales, service and marketing. When prosperity returned, they were aligned to better meet customer needs and, accordingly, enjoyed greater financial success.

  From a training perspective, organisations learned their lesson from over-cutting budgets during the 1982 recession, and during the early 1990s downturn instead chose to maintain or increase training initiatives as a source of competitive advantage.

• Learn from the best: Look at some organisations that chose to invest in future sales growth rather than cut spending in challenging limes. Consider the success stories from Bain & Co.'s survey of 365 companies before and after the recession of the early 1990s.

  One involves Solectron, an electronics manufacturer that chose to devote increased resources to its customer-satisfaction programs during difficult times. That move eventually resulted in market leadership, the Baldrige Quality Award and a 50% revenue increase.

• The bottom line: Successful sales organisations don't take a "wait and see" approach. They pursue activities that result in long-term prosperity. They keep in mind that although many external factors are beyond their control, they can and should address today's challenges.

What can you do now?

• Hone sales call skills: During times of economic uncertainty, successful organisations drive their sales forces to capture sales in a competitive market. They arm their salespeople with revised market intelligence - customer, competitive and performance data - and equip them to use it.

  Well-trained and prepared salespeople not only exude confidence. They also instil it in their clients. A thorough analysis of customers' business and personal needs gives salespeople an understanding of what customers are feeling and why. Prepared salespeople also understand customers' potential objections and can address them.

• Initiate and advance the sales process: In industries with long sales cycles (typical of many business-to-business sales), successful salespeople will firmly establish the sales process with customers now. When the economy improves and customers are ready to spend, those who have already launched the process will be positioned to quickly close the sale.

  Industries with traditionally short sales cycles (more typical of business-to-consumer sales), might find that the process is becoming longer as customers adopt a wait-and-see attitude. Sharp salespeople will quickly identify and control this drift.

• Emphasise account management: Top salespeople will create additional contacts within existing accounts, not only because existing accounts are a richer source of business than are new accounts, but also because it reduces the chance of losing the account if current contacts are laid off.

  Top salespeople also communicate regularly and often with key account contacts. Salespeople who are tempted to cut back on sales calls to save on costs and because of frustration with poor closure rates are inviting failure. It's better to maintain, if not increase, contact with such accounts, thereby reaping rewards over dormant competitors when the market improves.O I N T

  Salespeople who can also cost-justify their products' or services' value, describe finance-based value propositions to high-level stakeholders, and negotiate mutually beneficial deals are better positioned to close sales in our volatile environment.

• Reassess and manage markets: Successful sales organisations rethink the positioning of product and/or market sets to adjust to a new environment and find new pockets of opportunity. For example, a product once positioned as a revenue generator or strategic necessity may now be better presented in terms of cost reduction.

  Forward-thinking sales leaders assess prospects in the pipeline to see how the recent crisis and downturn has impacted them. As the impact differs depending on industry and product, they need to conduct a market analysis and match the right products with the right markets. When there are fewer big prospects, methods have to change, and it becomes imperative to identify and engage those few.

• Coach and reinforce processes and skills: In tough times, strong sales managers run coaching sessions to motivate salespeople and reinforce processes and methodologies. Salespeople now face more rejection than in the past and need the additional support. Fighting negativism can be a challenge, but it brings a clear advantage, as motivated salespeople interact with customers and prospective customers.

  Strong managers also seek ways of reducing sales costs through, for example, improved time management and efficiency rather than by taking choices that in fact intensify the downturn (for instance, reducing lead-generation activities or sales calls).

Training and development

Training of your sales organisation reduces costs, increases sales success, and provides a head start on future revenues (when the recession ends). A well-trained sales force can achieve the following:

• Foster customer loyalty: Using time-tested behaviours to advance their role from transactional sellers to consultative sellers, successful salespeople increase their chances of getting face time in the near term and ensure better pull-through over the long term.

  Under current circumstances, prospects who are not ready to purchase won't make time to see salespeople who are "transactors," but they will continue to value and grow relationships with trusted business advisors.

• Better control the sales cycle: A formal method for assessing and progressing the sales cycle along a set of defined stages enables trained salespeople to approach prospects with solutions already tailored to their current business issues. They ask the right questions at the right time and eliminate non-productive discussions.

• Operate efficiently and productively: By adopting a formal account planning process that includes specific goal setting, trained salespeople systematically identify buyers and assess their buying potential during a given period or condition. This assessment enables them to gauge where they should spend their time and prompts them to continually re-evaluate their prospecting lists and call plans as market conditions change.

• Deepen account penetration: By identifying key contacts (including the contacts' decision-making roles and personal and organisational issues that will impact the buying decision), trained salespeople understand the business issues and realities of account contacts and take appropriate action. They use a formalised strategy for moving the account forward that includes anticipating and alleviating objections and building a long-term presence in the account.

Just as important, well-trained sales managers can:

• Motivate their teams to handle rejection and maintain confidence: Skilled sales managers lead by example, maintain a perspective on long-term goals, and use a systematic approach in addressing issues in a mutual exchange. It can't be overemphasised how crucial this is under current circumstances.

• Help control costs: Skilled sales managers can immediately diagnose and correct unproductive, inefficient behaviours.

• Boost productivity: Skilled sales managers maximise opportunities for their teams by realigning territories and managing markets. By clearly assessing performance and recommending behaviour changes, and by providing the stimulation, focus and information needed to succeed, high-performing sales managers can increase productivity substantially.

The bottom line

No one can say for certain when or even if business will ever return to what we once considered "normal." What's certain is that the economy will cycle as it always has and that prosperity will return.

The key, then, is to be close enough to customers to rapidly detect and adapt to changing attitudes and concerns in an effort to secure business in the short term while strategically positioning yourself for long-term success.

Hibernation strategies are not the answer. Successful organisations undertake multiple initiatives today. Developing your sales force to carry out these initiatives will cultivate meaningful customer relationships and position you to surpass the competition - critical principles of success in any environment.