Sales people have to ramp it up during tough times. Kurt Newman explains how.
We experienced such positive growth over the past 17 years that it tended to spoil those of us in sales. The lengthy cycle has resulted in fewer than 50 per cent of today’s business-to-business salespeople ever selling during an economic downturn.
Those in sales during previous economic downturns in 1991, 1987 and 1982 will remember what it was like. Financial forecasters anticipate this current cycle will continue for at least two years; Microsoft’s Bill Gates says it could be 10 years.
This is enough to depress anyone, and it has already affected many salespeople, particularly younger ones. The selling environment has changed and we need to adapt in order to survive and grow.
So what happened in earlier economic downturns?
Risk aversion. Existing and prospective clients became more risk averse, preferring to deal with suppliers they knew, who had a good track record.
Sales access. Trying to secure an appointment with the decision maker was difficult, particularly with medium to large organisations. This was because the sales process became more complex due to the number of people involved in the decision process.
Sales profits. Margins were reduced and targets fell short because the selling cycle was longer due to the need for additional selling activities to secure the same amount of business. The decision-making process took up to 40 per cent longer in the downturn economy.
Excess busyness. The new protocol meant a dramatic increase in the volume of sales calls, proposals, demonstrations and presentations. Sales pipelines became full of mediocre opportunities that resulted in minimal, if any, impact on sales. Sales forecasts were often ‘rubbery’.
Clients were pushed to buy. They felt they were being high-pressured to buy. This lack of respect for the client, coupled with the limited selling ability of the sales person permanently damaged the relationship between them.
Discounting. Appearing as an easy fix to a short-term problem, discounting created other problems. Greater volume needed to be sold in order to generate the same amount of profit and, if it wasn’t achieved, the company would be in a weaker financial position.
More cold calls. Simply increasing sales activity levels without a sound sales strategy didn’t necessarily produce more sales. In the prevailing economic environment, prospective clients were reluctant to change suppliers and preferred to stay with those they knew, liked and trusted.
Tactics for the downturn
Taking advantage of opportunities presented in an economic downturn is possible, but you have to plan and put some things in place first.
Think survival and growth. Salespeople who are only in survival mode tend to overreact to problems, and their decisions are often fear based. To begin thinking growth, set clearly defined written goals for the next 30 days.
Re-evaluate your associations. You cannot afford nor would you want to be affected by people who are constantly looking for and speaking gloom. Only associate and develop networks with people who have a positive, uplifting attitude.
Build a wall around key clients. Concentrate on the best-selling opportunities and, even if you know who your key clients are, validate their position by ranking them in terms of revenue contributed from the highest to the lowest. The top 20 per cent (1-20) are category A, 21-75 per cent are category B and 76-100 are category C. You now know where to allocate most of your time.
Focus on selling value, reliability, security, stability, safety and peace of mind. Value doesn’t have to be tangible as product quality. Intangible value can build strong, loyal relationships. For example, send articles of interest that could be important to the client. It shows you are thinking of them and that you care.
Differentiate yourself by becoming more competent. There are six competency levels in Relationship and Consultative Selling yet the mean average across the many industries is three. Level 6 salespeople consistently outperform others with more sales.
Re-evaluate your prospecting. Develop an ideal client profile based on the attributes of your best clients. This can be used as a guide to prospecting. Use all paper-based and electronic tools available to you. Re-contact dormant or lost accounts. Develop hot referrals by asking clients for at least two people they know who would be interested in your product/service. Ask them to contact the referral. The referral will then be expecting your call.Giving a referral is personal, so it gives the client an opportunity to give back to you.
Hold firm on price. This can be particularly challenging when competitors are discounting, but don’t give in. During the last recession, customers paid 12 per cent more for equivalent products than they did in stronger economic times.