As fears of a coming recession grip the world, businesses everywhere are making cuts and reassessing budgets. For sales teams, this economic constriction can be especially concerning. How can sales professionals stay proactive in closing deals and driving revenue when they have less to work with? How can they access the budgets that are available and keep things going?
Today’s economic climate may seem dire, but it’s not unprecedented. Throughout history, periods of tightened finances have impacted the working capital of businesses and decreased company spending. Funds are diverted to business-critical purchases and services or saved for emergencies and paying off debts.
Clients behave differently in a recession, too. Purchasing managers or buyers previously interested in a product or service are now likely to seek more cost-effective options. This also applies to buyers with whom team members have already built strong relationships. In an unstable economy, loyalty becomes a luxury many can’t afford.
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What Happens to Sales Strategies During Recessions?
Sales professionals can’t rely on the relationships they’ve already built. In good times, sales teams get used to repeat purchases and expect certain buyers to keep buying. As a result, they tend to focus on acquiring new business. In times of crisis, even the most frequent buyers must prioritize their own financial well-being over loyalty. They will take their business to whoever offers them the best deal.
For this reason, it’s imperative that sales teams understand what’s most valuable about their product or service to potential buyers. They must clearly articulate their alignment with clients’ new priorities. Regardless of the circumstances, selling to a new buyer will always cost more than looking after an existing one.
When a sales team doesn’t have access to the funds or freedom of more prosperous times, it tends to take a reactive approach to selling. In a match of reactive sales versus proactive sales, reactive strategies tend to neglect existing and loyal buyers. They can make downturns even worse.
What Does a Proactive Approach to a Recession Look Like?
To create winning sales strategies during recessions, teams need to find a balance between activities that win new business and those that retain existing buyers.
1. Revisit sales strategies.
Our data at Sales Xceleration shows that 89% of businesses struggle with their sales strategy, and 73% don’t know what makes their companies unique. In times of crisis, good decisions become possible only when businesses go back to the drawing board. They should determine what’s going on in their target markets and what their potential buyers’ pain points are. They should also understand how their value propositions compare to competitors’. By rediscovering the foundational elements of their strategies, businesses open the door to innovation.
2. Disinvest where possible.
During a recession — or potential recession — costs need to be cut. Fortunately, this doesn’t have to come at the expense of proactive selling. Businesses should try to retain their most lucrative clients and drop their most demanding, resource-intensive clients. Proactively losing clients during a recession sounds counterintuitive, but it frees up resources that can be used to attract and retain more profitable buyers.
3. Prioritize the best buyers.
To succeed during a recession, sales professionals need to adapt their sales value proposition to buyers’ most urgent needs. According to our data, 85% of businesses do not prioritize or even differentiate their buyers or prospects in a meaningful way. During recessions, when resources are limited, prioritizing means following the buyers who best align with ideal client profiles.
4. Drive behavior through key sales metrics.
To find success in a tightening economy, sales teams need to clearly define what success means for them. By focusing on key sales metrics, they can engage in activities that will help their businesses survive. Start by defining leading and lagging indicators. This is especially important for businesses with long sales cycles because they can better track the most important actions that will move the needle. Focus equals success.
5. Ensure that teams are full of willing people.
Everything starts and stops with the sales team — especially during a crisis. It might seem like a bad idea to make changes to sales teams during a recession, but our data indicates that 92% of businesses often fail to address gaps in sales competency. By shifting talent strategies, sales teams could gain a competitive edge. Developing sales skills takes much longer than developing product knowledge. Consider replacing the bottom 30% of a sales team with top performers. During an economic downturn, it is more important than ever to have an effective, well-performing sales team that is willing and able to execute winning sales strategies.
If great opportunity really does lie in every crisis, sales teams should be able to turn the current uncertainty into grounds for innovation. While some companies are frozen with indecision and fear, and others are doubling down on reactive strategies, the proactive sales leader will use today’s challenges as springboards.
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