Selling to Beat the Recession
As the world’s advanced economies have slipped into recession, many companies have responded by making redundancies in an attempt to reduce their costs. In many companies, sales professionals have been among those to lose their jobs. Yet, the only way that a recession will end is when economies are growing once more. For this to happen, companies need to sell more quarter-on-quarter (whether this is to other companies, to consumers, or to Government). Sales professionals will help to make this happen.
Falling aggregate demand creates significant challenges for most businesses. The combination of fewer buyers and hungrier sellers creates a difficult competitive environment. The need to cut costs can lead to dysfunctional and demoralised sales teams. Delayed purchasing decisions creates pressure on cash flow. Many sales directors are left unsure of how to respond, where to prioritise, and what to do next.
Yet the irony is that for those companies brave enough to invest in sales during a downturn, a recession can offer the best opportunity to gain market share. Competitors may scale-back their sales efforts, creating fresh openings. Purchasers may respond to new arguments, and be looking for value in new places. Companies that understand about how to sell in a recession may find it is possible to improve both market-share and turnover.
Many sales professionals, and even entire companies, confuse selling a category (“why you should want this type of product or service”) and selling competitively (“why you should want this particular version of the product or service – from us”). This distinction is always important – but in a recession it can be absolutely critical. Companies are still spending money in a recession, but they are looking harder than ever at their options, which in turn means that selling new services becomes harder. So category sales, which involve persuading a company to commit to entirely new expenditure, are less likely to be successful.
Being absolutely clear on the distinction between category and competitive sales – and focusing entirely on selling to companies already buying the category from somebody helps put resources in the right place. In a recession, companies should protect and then gain market-share, not attempt to grow the overall market.
Competitive sales require different messages from category sales. The competitive sale must focus on differentiators. The competitive sale needs to meet prospect needs better than the competition – taking as a starting point what the purchasing company is looking for when buying this product or service. Sales messages should argue that “we save you more money than they do”, “we improve your production throughput by a greater percentage than they do” – and so on.
The only reason to touch on the subject of why the prospect needs this category of product or service when selling this way is to reframe the purchasing decision, to make the prospect understand their purchasing decision in an entirely new way. By getting the prospect to consider things they simply hadn’t been thinking about before – that this widget not only improves production throughput but also helps limit environmental waste – new avenues are presented for the competitive sale.
Selling competitively in a recession, sales messages should focus on value, return on investment, and give reasons for buying immediately and not postponing buying decisions:
- Value does not mean cheap – ‘more for more’ or ‘more for the same’ strategies work just fine – but without demonstrating value in some way, sales won’t be made.
- Return on investment should be calculated in hard financial terms, and payback times demonstrated graphically and numerically. This may mean providing tools such as ROI calculators, or involving financial staff in complex sales to support the regular sales team with spreadsheets and financial terminology.
- Sales presentations may need to focus explicitly on why purchases should be made now, and not postponed – particularly where cash-flow pressures exist. One key argument will likely be that during a recession, where many companies stop investment, those that do invest may be better positioned for the upturn.
Many sales teams become dispirited in a recession. Sales can be harder to make. Bonuses and commissions shrink. Job losses are a constant threat. Leads are harder to find for some companies; in others, smaller teams create demanding workloads for those who remain.
Yet, by providing the right tools and support for sales professionals, by investing when others are cutting their investment, sales teams can perform well, even in the most difficult of environments.
The pitch presentation is the most critical stage of the sales cycle, and yet many sales professionals are hampered by being armed with poor-quality presentations. This reduces morale and cuts odds of success, at a time when leads are scarce, yet opportunities to grab market share exist.
Poor presentations are often ignored by the sales force. This means that even if a company understands how to position its services in a recession, without encapsulating these messages in a sales tool that actually gets used, this understanding won’t generate sales.
Investing in effective sales tools and sales training is the best way to ensure that sales and market share don’t suffer in a downturn. When competitors cut costs, and scale back their sales team – invest. When competitors use ineffective sales messages – hone and sharpen arguments. When competitors use tired slides – provide sales professionals with something that works.
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Fin Farrelly, Marketing Manager, Airedale
You took a complex subject and quickly got your heads around it to produce a professional, slick presentation. We’re very happy with our success rate from the conference, and it seems fair to say that the presentation was a core influence in that.