Selling in a Downturn - Sometimes the Best Defense is a Good Offense
In case you haven’t noticed, the news hasn’t been particularly positive over the last couple of weeks. It is impossible to miss the barrage of demoralizing headlines: Cash is king. Layoffs. Fundraising is going to be hard. Budgets are on hold. These are all likely realities for the foreseeable future so, do manage costs tightly, as difficult as it may be. However, don’t give up on sales and growth just yet!
As an entrepreneur or a sales leader that is cutting costs, the next question to ask yourself should be: how can I continue selling and possibly become counter-cyclical?
I was in sales for a company that built workflow software solutions for accounting processes during the Financial Crisis of 2008/2009 and learned some valuable lessons. The lessons learned certainly will not be 100% transferable to our current situation but can hopefully provide a framework for thinking about where your best opportunities may reside right now. Without being overly prescriptive, here are some questions to consider, through the lens of your products, about the current macro environment:
Geographic Impact. Are there geographies that will experience less of a downturn?
Sector Analysis. Which industries may be less impacted?
What types of customers could potentially benefit from the current market challenges?
What challenges will they face that are mission critical?
Government Stimulus. Governments are spending a lot of money to keep the economy afloat. Who will be the recipients of that capital?
Business Processes. What will be some of the ‘lessons learned’ at the end of this cycle? E.g. Were people/companies unnecessarily impacted by preventable factors, and how will they start solving those problems?
Back in ‘08/’09, we were able to ‘defend our turf’ and even manage some growth by focusing our sales and marketing efforts on a few areas:
The Canadian market: Canada was less affected by the mortgage crisis that crippled the US economy.
Businesses that had substantial revenues from the government: One of our largest customers was a government contractor and we were able to increase our engagement with them since government budgets were largely unaffected.
Sectors that benefited from the massive government stimulus packages of that era: One such example was the American Recovery and Reinvestment Act [ARRA] which invested some $800 billion into infrastructure projects. Around this time, we were able to secure our largest North American contract to-date with a Fortune 500 civil engineering firm that was set to be the beneficiary of a substantial chunk of ARRA funding.
Regulated industries like utilities: Fortunately, we had a couple of utilities as customers and, due to the way pricing works in the electricity world, they did not experience immediate revenue erosion. To their credit, they invested in our technology to help cut costs in some back office functions in anticipation of future budget cuts.
Don’t get me wrong, we definitely struggled through those years but these adjustments softened the blow. Some of the lost opportunities came back later on, too. One prospect, that I had been working on a very complex proposal with since June of 2006, pulled their budget just before signatures in December 2008. It was painful but we kept in touch and, two years later, they signed a major deal with us - after a sales cycle of nearly four years.
For the time being, Step back and take a critical look at your company as if you were an outsider and control what you can control:
Think creatively.
Test and learn quickly.
Be a valuable partner to your customers.
Qualify your prospects relentlessly.
Ask the hard questions.
Build your pipeline.
Be painfully honest with yourself.
Be flexible.
Be human.
Take some chances.
With some luck, you will come out stronger on the other side!
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