How to Thrive During a Recession

Thriving in a Recession | SkillSource Learning

By Justin Albertson
A recession only exposes weaknesses in your operation that already existed, it doesn’t create them. Whether it’s a lack of diversity of revenue streams, limited cash reserves, not enough players, etc. – that was already there before the recession. Clearly, the best strategy is to have a plan before the recession hits (A Bain & Co. study says the majority (57%) of sales organizations do NOT have a plan for a recession).
But here we are, and if you’re running a sales organization without a plan, what are you to do?
Do not make the mistake of focusing inwardly and only playing defense through cost cutting. A study from McKinsey and Co. found that you can’t cut your way through a recession. They found that companies who focused outwardly on taking market share away from competitors were more likely to thrive during a recession. Similar to Bain’s study, McKinsey found that the companies that invested in their people (think training and coaching) during a recession were more successful. Makes sense, but what if you don’t have a plan?

External focus:

Keep in mind that your customers are experiencing the recession too. The more you can relate on a human level, the deeper your connection. Double down on what we know drives sales success: understanding your customers’ needs, goals, aspirations, concerns, and fears both from their company’s perspective and from a personal perspective (that is, career goals and aspirations and how they feel they are progressing). This deeper connection that extends beyond the features and specs of what you’re selling makes an even bigger difference during tough times. The old adage “no one cares how much you know until they know how much you care” (Teddy Roosevelt) rings loudly during a recession. And at the core, this breeds trust. No one wants to buy anything, let alone associate with, someone or a company they don’t believe they can trust. And this is amplified during hard times. Focus on caring for your customers, and they’ll return the favor. (Same for your people, too – more on that later).

How would this look?

As your managers are working with their teams, they need to focus on how to help your reps and customer service teams reaffirm or create trust between your customers and you – if your customers buy your product or services from multiple vendors – you are particularly susceptible to losing market share if they don’t trust you more than any of their other suppliers or providers. Show you truly care about your customers’ success more than you ever have before, and you’ll learn more about their business – share what you are doing in your business to work through the recession.
This aligns with Bain’s study that found companies who accelerated gains during a recession more aggressively qualified leads and opportunities. The more you know about a prospect or customers, the better you can qualify them. Cascade this message throughout the organization to learn as much as possible about your customers. Collect feedback from your team members who are on the front lines working with customers so you can look for commonalities and insights to leverage that will give you an edge over your competitors.
Let’s take a closer look at the idea of “more aggressive qualifying.” Sounds great, makes sense, right? Keep in mind that it only works if you have a proven qualification matrix or rubric already established. If not, use what you learn from above to create one fast. If so, go through every deal in the pipeline and apply it. Dump all deals that don’t meet your criteria – close them out, and don’t look back. With the rest, any deals where you have not had any customer engagement or contact (speaking to a customer via phone/video or email exchange) in two weeks, move them back a stage in the sales cycle – even if you have a demo or follow up call on the schedule. If you haven’t had contact with a prospect in over a month, start over. Go back to the prospecting stage. It’s likely they have experienced some serious changes and are not thinking about you anymore. Anything you think you know about their needs or goals are only assumptions at this point. You need to consider any future outreach as cold calling again. You need to regain their attention and conduct discovery all over to ensure you understand their goals and don’t overlook anything that could sink your deal. You know what they say about assumptions.
With long-standing or loyal customers, get your executives together – now. Share your thoughts about how you’re handling the pressure you’re experiencing due to the recession. Look for ways you can help one another – the same goes for your suppliers, vendors, partners, etc.

Planning for a recession ahead of time is key to success

Invest in your people:

An HBR study suggests that true and real coaching is a differentiator to adapt during a recession, but what is “true and real coaching”? All too often, the best salespeople are promoted into management, even though we all know very well that the best salespeople do not make the best managers. In many cases, when times get tough, those managers return to doing what they do best (selling) and neglect the coaching – what is one to do? Send them to take some online e-learning course on coaching? You know that won’t cut it… Lean on them to push their teams harder? Really? …How about asking your reps how you can help them be successful? What do they need to win? What questions and concerns are they wrestling with that prospects and customers are bringing to them? Engage with questions and look for what differences you hear between your top performers and the rest of the pack. Work to bring the insights together and formulate a plan based on the successes of your best people. In these high-pressure situations, it’s common for leaders to think they need to have or find all the answers themselves. In reality, the insights needed to succeed are often found on the front lines, not in the board room or on a spreadsheet, definitely not between your ears.
Additionally, reassure your people that you are taking the necessary actions and making the proper plans to ensure the company’s success during the recession and enabling them to be successful. If you are only focused on cost-cutting measures, as mentioned earlier, you’re toast. Engage with your top performers and learn what they’re doing. Bring these practices to the rest of your organization. This will breed trust internally and help you retain your top performers.
Your primary focus should be externally on your customers, their marketplace, and their concerns. As well as working with your teams, hand in hand, to engage and find your way through together.
While looking at the entire sales organization ecosystem holistically and consistently evaluating the various dimensions of your sales organization, from talent to process to CRM/data to enablement to coaching to compensation, is the only way to ensure success during a recession; there are some actions you can take to survive, learn and create your future recession-proof plan. And if you’re nimble enough, and stay focused on your people and your customers, you might just thrive during this time.