There has been plenty of debate over [how to maintain company success in a downturn] Regardless of the technical definitions and economic perspectives, many organizations see challenging headwinds on the horizon. Even if companies aren’t feeling the economic pinch yet, they will be more skittish when it comes to spending when news cycles predict doom and gloom.
As customers become more reticent to buy, your sales approach must change. Right now is the time to get your sales organization ready to compete. This may be a chance to gain market share on a competitor, or to expand your current business with new offerings.
Here are three ways to shift your thinking about the most effective way to sell, especially in a down economy.
1. Involve executives earlier in the sales process.
Executive involvement with sales frequently consists of “theater” at the end of the sales cycle. Execs are brought in as a super closer or supreme exception maker, or they show up as part of the celebration at closing. These roles can detract from the sales team’s credibility.
By getting involved earlier on, executives are uniquely positioned to expand business potential. Part of the distinct value they can bring is building bridges with senior-level leaders on the other side of the table who are frequently the ultimate decision makers.
Also, as strategic leaders of the company, they are more likely to spot opportunities to help clients address issues or capitalize on opportunities that haven’t yet surfaced. The end of the sales cycle is too late for execs to have much influence on the scope of the deal. At that point, the only thing you can substantively change is price.
A Fortune 500 technology distribution company I worked with prioritized strategic deals where members of the executive team could work with the sales team. By the end of the year, they had earned 35% more revenue at margins five points higher on business where there was an executive sponsor versus those that didn’t have executive involvement.
Obviously, executives won’t get involved in the early stages for every opportunity. But most companies have around a dozen opportunities in their pipeline that would make or break the year. Use executive leadership with the right prospects to make a huge difference on critical deals.
2. Break out of price-driven sales cycles.
One of the biggest mistakes sellers make is that they negotiate too soon. Difficult times magnify this issue as customers are more hesitant to make decisions and sellers feel more pressure about making their numbers. And when companies are slashing their budgets, it’s natural for customers and sellers alike to lean into price as the most important factor in the purchasing process. But price reductions often won’t overcome a company’s innate squeamishness to spend.
As a leader, it’s important to address this issue. Connect with your sales teams and convey the importance of winning the right kind of business. There is no substitute for leadership providing focus and energy toward making sure discounting doesn’t become the strategy for making sales.
I worked with the executives and sales team at a maintenance, repair, and operations (MRO) supply company. They were pitching clips that hold auto parts as they move through the assembly line to an automotive manufacturing plant. They helped the buyer understand the dire consequences of going with the lowest-cost clips. Those cheaper clips could save them tens of thousands of dollars, but any time one of them broke, it could shut down their production line for hours at a time — at a cost of $1.2 million per hour. The winning conversation about a commodity product was about risk, not price.
Provided your offerings are priced within a reasonable range in the market, discounting to win only hurts margins. There is much more to most B2B buying decisions. Decision criteria like quality, time savings, and productivity enhancers, as well as improving economic performance at the top and bottom line, are important. Add things like integration, simplification, scalability, and reliability, and your sales team will be able to create stronger agreements based on how your company can help a customer achieve their objectives.
3. Refocus sales managers on planning, not selling.
During a downturn, it’s often all hands on deck. To win business, it’s common for managers to go back to the trenches and do more selling and closing business. After all, many of them were promoted because of their success working with customers, and it may seem a safe bet to get your best players out on the field in a difficult market.
This has two negative effects. First, it weakens the role of the salesperson, reducing their presence in these accounts because the manager is doing the seller’s job. Second, it takes managers out of the role of coach where they can have the broadest impact on success. Coaches don’t run out on the field when their players are doing poorly. Coaches focus on improving the players’ ability to win — from game planning and strategy to skill development and recruiting talent. Developing a strong, agile, and strategic sales team is critical to winning business during economic slowdowns.
So, encourage your sales managers to focus on development. They can have the greatest influence on the success of a sales cycle in pre-call planning and post-call review:
Too often, planning time becomes a rehearsal of what the seller is going to say or pitch. Instead, sales managers should focus on a consultative process: Coaching salespeople on what to ask, where to create value, and how to consider what needs and objectives the client may be looking to pursue. It’s also a chance to ensure sellers are engaging with decision-maker contacts and not just influencers (where many sellers are more comfortable).
Sales managers should consider what was effective and what didn’t work, make course corrections, and model how to do it better next time. This is the time to give salespeople feedback on performance and behaviors that worked or didn’t, and work on developing product knowledge and deepening their understanding of how your solutions can help customers. In the same way that a sports team reviews film of what happened in prior games, a thoughtful review that is focused on process, skills, and strategy can lead to better performance next time.
By having your sales managers focus on these two parts of the sales cycle, they can guide what happens in every important client interaction and make course corrections and adjustments. Multiplied across the sales organization, this creates a more scalable and effective effort to improve performance.
We’re all familiar with the aphorism that “A rising tide lifts all boats.” But just because the economy ticks down doesn’t mean your business has to do the same. Plenty of organizations increase revenue, expand margins, and launch new products successfully in challenging economic times. Focusing on these strategies can make you one of them.
Article thanks to Scott Edinger. Originally published in Harvard Business Review, October 2022