We don’t want to think about it: having another recession. The sting of the last one still bites a little, even though sales trends are now positive. Yet an economic downturn is inevitable. Basic economics indicates that what goes up must come down. The time to prepare for economic stress is when sales are booming. Take the good times to hedge the bad times.
Preparing for a recession requires discipline and rigor. Solid preparation lets sales leaders move forward confidence, ready for whatever comes their way. There are 5 steps to take now so you and your sales organization is ready for a downturn:1. Define your Market
Determining your Ideal Customer Profile (ICP) is the core key step in generating more revenue. Yet most companies want to sell anything that ‘fogs a mirror.’ The problem during a recession is budgets are reduced, yet revenue expectations often remain the same. Identifying and targeting these ICP prospects is the first step in focusing on what’s easiest: Easiest to prospect, sell, and service. If you don’t use this approach, expect a price war and lower margins.
2. Implement a Sales Methodology
It amazes me how many companies don’t execute a sales methodology. The proof is there: more wins with a methodology than without one. When tough times hit, you have to beat the other guys to grow. Using an effective sales methodology improves those chances by over 50%. And you then have a common language throughout your sales force. This is key to execution and adoption in less turbulent times. It’s essential when economic headwinds hit.
3. Bolster your Talent Strategy
Your success is equal part talent and equal part performance conditions you put that talent in. You need great talent. But a talent strategy is not just sourcing people. It involves the hiring process, role profiles, talent assessments, onboarding, succession planning, and sourcing. Having a strong talent strategy means having strong talent. This is especially needed when the economy is in the dumps and the market isn’t growing.
4. Define your Key Metrics
What gets measured gets managed. The key is to define the metrics that matter. And this is not just lagging or leading indicators. Your key metrics must also include behavioral indicators. Being fanatical about these behaviors (selling time, call plans, field rides) will increase the leading indicators. And this in turn improves lagging indicators like revenue. The problem is, measuring behaviors is tough work. But don’t back away – they pay off in the end with the consistent revenue you’ll need in challenging times.
5. Refine your Compensation Plan
Compensation should incent the right behaviors. It should not drive the right behaviors. Yet too many times, compensation plans pay for actions that are not trained or in opposition to the corporate strategy. For example, we had one client that pushed revenue, but paid sales reps on margin. Huh? This misalignment might be manageable in a growing economy. But in a recession, it’s revenue suicide.
A key point is that the sequencing of these actions is important. The steps build off one another and their impact increases because of the previous step. Designing the right strategies and plans on paper isn’t enough. Each of these steps require true adoption by the field sales organization. Without buy-in and consistent reinforcement by your front-line sales managers, they won’t get adopted.
No one wants the think about the tough times, especially with all indicators still showing ‘green’. But as a sales leader, it’s your responsibility to prepare for the worse. We’d love to share more strategies for equipping your sales teams to weather any market condition. Contact us to help you succeed today and in the unknown tomorrow. We can help ensure sales don’t go the wrong way when you need them the most.