Since the Great Depression, we have experienced thirteen domestic recessions and four global recessions. Although the future seems bright, there will always be another recession…followed by greater economic expansion.
There are some indicators that a slowdown is coming. For example, the JP Morgan Global Purchasing Managers’ Index dropped to 50.7 in January. A number above 50 indicates expansion. However, the index is trending downward. The yield curve on US Government Bonds is flattening. Volatility in the stock market.
There are also more subjective indicators including news stories, conversation with colleagues, and customer opinions. For example, your customer might seem less optimistic about this year’s performance. Their opinion is just another indicator that a slowdown is looming.
Another indicator of a slowdown comes directly from salespeople. In our training seminars, salespeople start asking, “How do I sell value in a recession?” Managers will ask, “What tips do you have for my salespeople during a recession?” When we hear these questions, it usually indicates a slowdown is on the horizon.
Some executives look at 2019 with a level of uncertainty. In the Wall Street Journal, CEOs indicated that a recession in 2019 was their top concern. Although executives seem uncertain about the economy in 2019, the long-term outlook is very promising. Warren Buffet’s letter to stockholder’s in 2012 provides some perspective regarding the certainty of America.
“A thought for my fellow CEOs: Of course, the immediate future is uncertain; America has faced the unknown since 1776. It’s just that sometimes people focus on the myriad of uncertainties that always exist while at other times they ignore them (usually because the recent past has been uneventful).”
We are on the tail-end of the lengthiest bull market in US history. It’s no wonder there is some built up pessimism. People are thinking, “How long can this last?” Although employment is at a high and the economy seems strong, there is a general sense of unease regarding the economy. Regardless of the next recession, we operate in a market with an abundance of opportunity.
Remember, whether a recession happens this year or next year, there is always one coming. Use this time as an opportunity to position yourself for the future. Over the next several months, we’ll be sharing some tips on selling value during a recession. Here are three tips to help you thrive during and after a recessionary period.
Tip #1 Create More Value for Existing Customers
The hungrier you are, the harder you work. How hungry are you? Are you hungrier than your competitor? It’s naive to think that you are more motivated than the competition. Considering yourself indispensable to the customer’s business is the height of arrogance. In fact, treating all business as at-risk business is good practice. It compels you to act, whether we’re in an expansion or recession.
In Value-Added Selling, we call this Tinkering. Tinkering is about looking for unique ways to re-create value for the customer. Look for those opportunities. Ask yourself, “What does the customer hate doing that we can do for them?” or “What common problems are they experiencing that we can help solve?”
For every ounce of value you create, there is an opportunity to create a pound more. Never assume that you have created enough value. Your past is not your potential and the future holds boundless opportunity.
Tip #2 Increase Activity Level
One purchasing managers’ study showed that salespeople reduce face-to-face calling during economic slowdowns by as much as 38 percent. Since some salespeople reduce their face-to-face selling time, they leave their customer vulnerable. This vulnerability creates an opportunity for you. As a good rule of thumb, consider increasing your call volume by 25 percent. By increasing your call volume, you effectively double your coverage vis-à-vis the competition.
As part of increasing your activity, you’ll also need to rebalance your pipeline. In a previous article we discussed the perfectly balanced sales pipeline. During a recession you’ll need to adjust your ratio. The recessionary pipeline should be adjusted to 1-3-6. This means for every short-term opportunity, there must be three intermediate and six long-term opportunities in the works. For example, for every piece of business that you will close in the next 30 days, you need three that will close in the next 90 days, and six that will close beyond that. You may work on shorter or longer lead times, but the ratio is always the same.
Tip #3 Do More with Less
You’re not given any more or less time during a recession. You’re still given the same 24 hours you had before. It’s important that you look for opportunities to leverage technology to do more with less. Here are some tools that are available to help you:
Evernote – Evernote helps you capture and prioritize ideas, projects, and to-do lists, so nothing falls through the cracks. Perfect for salespeople juggling multiple priorities.
LinkedIn Sales Navigator – Great tool to help you target the right people and the right companies. If you struggle to get past gatekeepers, this tool can help you bypass gatekeepers and go directly to the source.
Google Alerts – Google alerts is a great way to stay up to date on the latest news with your top customers and prospects. Set up a google alert so that you’re notified of any news or current events. You’ll be among the first to know when something changes with your customers or prospects.
There is always a recession coming. Although recessions can be painful, they often make us better in the long run. Good economic times mask bad habits. During recessions we are forced to remove the mask and identify ways to get better. In that spirit, the adversity we experience in recessions can be good. In closing, consider this quote from an entrepreneur who embraced adversity to improve:
“All the adversity I’ve had in my life, all my troubles and obstacles, have strengthened me… You may not realize it when it happens, but a kick in the teeth may be the best thing in the world for you.”