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Introduction
As the global economy tightened, most businesses appreciated they wont get different results by doing things the same way. But much of the science for growing sales in a recessionary market is counterintuitive, and managers whose hands were on the rudder in previous downturns may no longer be in the workplace. Few of todays executives therefore have ever faced this kind of storm in their career.
Its a situation primed for old mistakes to be made all over again.
A recent study of the experiences of former executives of Fortune companies and start-ups who captained the ship through the 70s stockmarket crash to the 90s dot-com bubble, reveals some useful home truths.
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But these same executives report the secret to pulling out of the nosedive is to act against the natural impulse, keep your head, and take a contrarian path. Those that did so achieved stability and even growth while their competitors fell by the wayside. They cite five most dangerous mistakes as:
to short-term gain but long-term pain; the loss of sustainability. Conversely in the B2B space, higher prices positioned as necessary to reduce the customers risk, actually plays better to executive perception than getting a cheap deal. Sometimes putting your price up is the best way to build your market with the right customers who can help you grow, not slow.
2. Increasing advertising
For fast moving consumer goods, brand advertising can sway preference and so take market share away from competitors in the short-term. But in complex B2B sales, advertising does not lift short-term revenue because institutional buying decisions require a protracted period of assessment that outlasts most advertising campaigns. So dont advertise and expect an impact on B2B sales this year. Instead, convert advertising budgets into demand creation programs that turn buyers with latent needs into buyers with active interest. Also PIMS Associates1 reports how companies that maintain advertising presence end up growing faster over the long-term than firms that drop off the customers radar, seemingly swallowed by the downturn.
Only 27% of companies that indulged in intensive cost cutting were growing as a result of their pains.2
As Tom Peters observed in his book The Circle of Innovation:
Asked how their organizations dealt with these challenges, they said the typical gag reflex is to:
Spend more on advertising. Cut back on salespeople. Cut back on training & coaching. Cut back on pricing. Tell salespeople to work harder and smarter.
04 Science of sales growth in a recession : A Research Report
The least successful people are the ones making the most calls. Increasing the call rate results in fewer orders, not more.4
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The goal is to make the type of sales calls your customers would want to write a check for because value was exchanged.
When you end sales calls that produce no excitement and lead to no mutual commitments to move forward, its a sales call that fails both companies at the table.
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5. Coach performance
Doing this is difficult if the sales manager does not go into the field to observe their salespeople in front of customers. They cannot divine their team members strengths and improvement needs from behind a desk. Here are suggestions successful managers use to drive growth: Map the activities that help customers move through the funnel. Agree with salespeople what actions they can take to achieve those progressions. Focus them on achieving this, along with the qualification, planning and presentation needed at each stage. Give new hires specific but realistic metrics to achieve that take into account the fact that the average ramp up time is now 7.4 months. Catch them doing things right and reinforce the positive. When improvement is needed, provide context, examples and suggestions. For experienced salespeople, focus performance coaching on the 60% of salespeople in the middle of the bell curve (not the top 20% and not the bottom 20%). The middle of the bell is where the biggest gains will be made. Set clear expectations for an accompaniment day and agree the salesperson will remain in control so customers dont staple themselves to the manager. Managers should never hand out their business card or be seen approving any decisionthey defer everything to the salesperson.
Brief before and debrief after every call. What outcome do we want? Why would they write a check for this call? What went well? What could have gone better? Managers offer motivation and direction as needed. Always gain and give commitments and follow through. After spending whole days with team members, trends will be spotted. Common needs are best dealt with during sales meetings in a peer setting. Every sales meeting should include a training component based on observations in the field. Push the administration and company news to emails. Use face-to-face time with salespeople to hone their skills. Run a quarterly performance appraisal one-on-one and always in person (never via webcam or telephone). Review performance to date. Plan what the salesperson needs to create a sustainable, rhythmic approach to revenue attainment. Direct them. Enable them. As unique needs arise, partner with human capital specialists and training departments as appropriate (but dont abdicate the training role in sales meetings). The argument that sales managers must have first been successful salespeople is less true than saying they need to understand the levers of sales performance, and be trained to identify gaps and coach their salespeople to greatness. This
requires deliberate, systematic process thinking skills; a blend of engineer, analyst and psychologist. There is increasing evidence that the role of sales management favors staff with a left-brain bias where the dominant traits are reasoning, speech, writing and number skills. This is in contrast to the right-brain processes of creativity, imagination, quick wits and visual processing that are more suited to the salesperson. It doesnt mean salespeople should not be promoted to the management role, only that in the absence of properly profiling if a candidate exhibits the right behavioral fit to the role requirements, doing so blindly can be a risky proposition where mistakes are magnified by the number of people under each sales managers stewardship.
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End Word
o avoid reinventing the wheel, learning from executives who weathered past recessions is a sound approach to reducing risk. In your own organization, your alumni, or your online social network, there may reside active or emeritus officers with deep experience to share. Talk to them.
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End Notes
Roberts, Keith. What Strategic Investments Should You Make During A Recession To Gain Competitive Advantage in the Recovery?, Journal of Strategy & Leadership, Vol. 31, Issue 4.
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About SalesLabs
SalesLabs is a global leader in revenue growth strategy consulting & training. Across 40 countries and in eight languages, we improve implementations of sales, marketing & management process, by providing pragmatic approaches to sales performance that are research-based and field-tested. www.saleslabs.com
A complete health check diagnostic on your Services marketing ecosystem, to spot best sales & practices and gaps. Realignment of marketing, sales & management to their true roles in the customers buying process. Science-based selection, induction, training and mentoring of your sales & marketing human capital.
Research, briefings, call coaching and opportunity or account management methodologies & skills. Improved demand creation, lead qualification and acquisition of new business. Modeling your financial data against our Blueprint Growth algorithms from Standard & Poors to identify your roadmap to exponential growth.
This communication provides general information current at the time of production. The information herein does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. SalesLabs Inc. disclaims all responsibility and liability (including, without limitation, for any direct or indirect or consequential costs, loss or damage or loss of profits) arising from anything done or omitted by any party in reliance, whether wholly or partially, on any of the information. Any party that relies on the information does so at its own risk. SL100303-1