Pick up any newspaper and you’ll find stories about how bad the economy is. Foreclosures are snowballing, the unemployment rate is inching up, gas prices are soaring, there are fears of runaway inflation, food prices are way up, layoffs are increasing, the stock market is down, the world as we know it is coming to an end.
For salespeople, this onslaught of bad economic news can have devastating psychological consequences. It erodes our confidence, heightens our anxiety, and may even convince us that our efforts are hopeless. The normal ‘no’ we receive is no longer simply no, instead it’s a sign of how bad the economy is. Rejection becomes magnified, lost sales are indications of how business has changed and our success or failure is no longer within our control. As the negative economic news increases, we become more convinced that it isn’t us; it’s the economy that is causing our sales to decline, our income to shrivel, our future to be in question.
Having been through several economic ups and downs in my career, I’ve had the opportunity to experience first hand the insidious nature of paying too close attention to the news. When we are bombarded by negative reports we tend to absorb those reports into our selling activities. The negative news we read becomes the negative outcome we expect-and the negative outcome we experience. We view our successes as the rare exception and our failures as the new norm.
This creeping negativism worms its way into all of our sales business. Our prospecting decreases-what’s the use anyway? Our presentations and proposals become defensive, pricing becomes our centerpiece, and we no longer ask for the prospect’s business but instead beg for it.
Yet, there are companies and salespeople who thrive in weak economies. There are those who view a weak economy as an opportunity to grow their business while their competitors are hunkering down with a bunker mentality, hoping merely to survive.
How can you turn a weak economy to your advantage?
5 “Musts” to maintain momentum during a weak econom
1. Maintain Perspective: Don’t allow yourself to get sucked in by the negative hype about the economy. Even during the worst of the Great Depression there were people and companies buying all types of products and services. There are ALWAYS quality prospects that want and need your products and services. Your job is to find them and connect with them in a manner they will respond to.
2. Maintain Prospecting: Most salespeople will DECREASE their prospecting as the economy weakens. Their general feeling of malaise and helplessness can work to your advantage if you can maintain-or even increase-your own level of activity. Further, since most salespeople will be using the most ineffective prospecting methods such as cold calling and networking, employing prospecting methods that are more acceptable to prospects will give you the opportunity to set yourself apart from the crowd.
3. Focus on Solving Issues, Not Price: Most of your competition will be focusing on price, not solving real issues and problems. Although price may be a consideration, quality prospects are more concerned about resolving their issues and problems and value, not getting the lowest possible price. Focus on the prospect’s needs, not your competitor’s price. While your competitor is busy turning their products and services into commodities to be sold at the lowest possible price, concentrate on understanding the root issues your prospect has and develop solutions that create value for your prospect.
4. Relationships Are Key: Human nature doesn’t change just because the economy changes. Both business and individual consumers buy from people they trust and respect. Certainly, we all on occasion make purchases from people we don’t have a relationship with-we may even make an occasional purchase from someone we don’t respect or trust, but most sales are created through relationships, not price, hype, or fast talking. That doesn’t change during a slow economy. People still purchase from people they trust and respect. While your competitors are looking for the quick sale, continue developing long-term relationships-not only will it pay off in the long run, it will create immediate selling opportunities also.
5. Take Advantage: As your competitors become more concerned about the economy, they will begin to batten down the hatches, cutting costs-including their marketing and prospecting expenses. They may cut other corners, even sacrificing customer service to save a couple of dollars here and there. Take advantage of the opportunities your competitors open up for you. Cut out the fat in your business while increasing your marketing and prospecting; make a conscious effort to target your competitor’s best customers; while your competitors retreat to their bunker, become more aggressive in pursuing new business opportunities.
An economic downturn can be a time for you to expand and grow your sales business by doing the opposite of your competition. While they are cutting marketing and prospecting expenses, allowing themselves to become incapacitated by the bad economic news, and hunkering down hoping to just make it through the bad times, you can turn the economy in your favor by eliminating your unnecessary expenses while expanding your marketing and prospecting, recognizing prospects still buy solutions and buy based on relationships, not just price, and by taking advantage of your competitor’s complacency, fear, and mistakes.
I agree with your point #2, Paul.
With that in mind, I think that prospecting in markets/niches outside your sweetspot is probably not advised. The reason is that it takes more time to sell a new customer in a new industry. They’ll want references, case studies, etc.
Comment by Dave Stein — July 7, 2008 @ 1:15 pm |
In a slow economy, relationships are especially important… time to focus on building strong relationships with customers. Taking time to check in with everyone and stay informed, time to take advantage of your CRM system (you can save by using free CRMs like Zoho or http://www.octopuscity.com), and you’ll be fine.
Comment by Nicole — July 7, 2008 @ 1:46 pm |
A spot on article Paul, and thank you for being positive. I get very annoyed about the self fulfilling prophecies of economic downturns and dare I say it ….shh….recession. In periods of increased growth companies don’t have to work as hard for the positive gains that the economy naturally provides and so we get used to a certain way of life and business. In reverse economic situations, our processes and ways of doing business are at their most scrutiny… which is actually a positive thing. Now you have the ability to spot where you need to improve and hone your skills, so that when the economy picks up, your returns are even greater.
I simply don’t understand the cut-back mentality of some businesses, because in such cases the part of the business that is wrong is not being fixed… there are just less people to fix it.
Comment by nesh thompson — July 8, 2008 @ 8:33 am |
Nesh,
I agree. I don’t understand the cut-back mentality in marketing and prospecting that so many companies do. Actually, I do understand that they view marketing–and even to some extent prospecting–as a discretionary expense, not a necessary expense. That being said, I find it difficult to accept that so many managers, business owners and salespeople so misunderstand the nature of business and selling. Nevertheless, that opens great opportunities for those who cut out the fat and maintain or increase their marketing and prospecting.
Comment by Paul McCord — July 8, 2008 @ 10:23 am |
Although I’m not in sales, I thought I would still comment.
The key here is that this is a CYCLE, not a long-lasting depression. Cycles are normal, and this downturn will eventually become an upswing.
Comment by jeffsher63 — July 8, 2008 @ 12:05 pm |
Good article. Timely. Good information and reminders.
Comment by Beverly — July 8, 2008 @ 4:25 pm |
“most salespeople will be using the most ineffective prospecting methods such as cold calling and networking..” with that said, I would enjoy hearing what you consider..”methods that are more acceptable”.
Don’t get wrong, I’m in agreement with the rest of your post. Though each point revolves around getting in front of a client that has some relationship with you.
Comment by John Feeney — July 9, 2008 @ 6:32 pm |
John,
One can certainly use the phone to connect with prospects–but not by cold calling. Why do both business and individual consumers have gatekeepers such as assistants, voice mail, caller ID, and the like in place? Because they DON’T want the cold calls and they’re making it as plain as they can that they don’t want to talk to us. Somehow salespeople think their call is the exception? Hardly. Consequently, they have to make dozens of calls to get appointments, and numerous appointments to get a sale.
Instead of cold calling, salespeople have to learn how to know who they’re calling and why they’re calling before they ever call. They have to have a reason and that can’t be to qualify the prospect–they have to already have done that and when they call they have to inform the prospect of a problem or issue they know the prospect has and needs to address–and in addition, they must have an introduction to the prospect.
Likewise, most salespeople consider going to the chamber networking event or the Monday morning lead exchange breakfast meeting networking. Close to worthless. Yet, networking can and does work for many, many top producers. They simply won’t waste their time at the chamber or the networking breakfast. Instead, they identify associations and organizations that have a large number of real prospects for them and become very involved in those organizations. They spend their time with a large number of quality prospects, not with a few marginal prospects.
Learning how to generate a large number of high quality referrals from clients and prospects is the single most effective method of prospecting–slow economy or not. But most salespeople have been taught the “do a good job and ask for referrals” method of referral generation. Again, close to worthless. Clients don’t give referrals because they like you, respect you, or because you did a good job. Most clients do things because of the reason most people do things–they perceive giving referrals to be in their own best interest. They have to have a good reason to give referrals. In addition, springing the referral question on someone at the last second as is most common almost guarantees no quality referrals. Clients need time to get used to the idea of giving referrals, they need to know what a quality referral is, they need to have an objective way to determine if you’ve earned the referrals, and they need time to think of quality referrals to give. The way most salespeople ask is self-defeating.
There are other methods, but that’s three.
And yes, each point deals with creating a relationship with a prospect instead of simply trying the ‘numbers’ game of prospecting and selling. I never said the more effective methods were easy–there are no shortcuts or magic solutions in sales–they’re just more effective ways to spend one’s time that results in more sales and more income.
Comment by Paul McCord — July 9, 2008 @ 7:14 pm |
Using a maritime analogy: All ships rise in the tide. The opposite is also true. We are affected by our regional economic ebbs and flows. With that said, one never knows if they’re really sea worthy until they’re on the high seas facing the storm. As John Maxwell says: “a leader is defined by the crisis.”
In calm weather (economically speaking) many order takers call themselves sales professionals. This is the real test. If you’ve been selling for a couple decades and are still here you’ve weathered the storm and can capitalize on this environment. Tough economic times can be an opportunity for those who spend more time selling and less time at the water cooler.
I agree with Dave Stein somewhat, when things are really tough it may not be a time to take on a new market if it has a huge learning curve. On the other hand, we launched an office in Kuwait last year, a long way away from North America and now that this market is somewhat heading south…. we’re happy that we invested in something outside of our comfort zone (and time zone). Strategic diversification = insurance
Comment by Shane Gibson — July 10, 2008 @ 10:55 pm |
Concerning downturns,a mentor of mine once observed: “When the tide goes out you find out who’s wearing a bathing suit”. In the world of sales and relationship management this means that those without a disciplined and multifaceted approach to prospecting will likely be showing their tan lines early and often. The best in class sales people that I’ve sold with and managed over the last 20 years all have had one thing in common in terms of weathering a downturn – they prepare for them during the good times by building a solid sales process and they manage the mix of their activities at a highly conscious level. Essentially, they turn up the intensity as they see a valley forming, focus on fine tuning “what’s working ” and consciously look to eliminate “what’s not”. Here’s where the “born sales person” who relies on only one or two prospecting tools (essentially a one trick pony) gets clobbered. As an example, a sales manager at a commercial bank once told me that he believed that the only sales tool that had any value for his RM’s was identifying just a couple of good Referral Sources at the local accounting firms. Needless to say, when the downturn hit, many of his so-called “good referral sources” dried up and those that didn’t slowed down. Since his sales people hadn’t developed an expanded array of referral sources and hadn’t practiced how to find and win business using any other prospecting techniques, their new business development suffered dramatically and the bank chose a reduction in force to cope with what they then saw as an expense problem. My goodness that water must have been cold!
Comment by Tom Moriarty — July 17, 2008 @ 2:27 pm |