This June marked the 10th anniversary of the U.S. economic expansion that began in June 2009. That’s quite a run.
But practically, it also means it’s been 10 years since most sales leaders have worked in a non-growth economy. Sales enablement has seen a particularly good decade. But very few of these teams have weathered economic headwinds.
While no one wants to think about it, economic downturns happen. Recent headlines continue to suggest dark clouds are gathering. The question is, how should sales and sales enablement leaders prepare?
Many folks in our network remain optimistic, some almost naive about the economy. But savvy leaders are preparing for the unknown. These leaders are adapting their ways of working and the messages they’re sending to their teams.
As we enter budget and planning season, now is the time to get real. What are you doing to recession-proof your teams?
Three tips for sales leaders:
1. Plan for multiple economic scenarios. We live in a world of uncertainty, but you still must commit to targets. Prepare and present multiple 2020 plans – the base-case, the pessimistic, and the optimistic.
It never feels good to push back on sales goals. But instead of sounding weak, engage the executive team in a discussion around your scenarios. Make sure your math has strong logic, backed by solid data. Most importantly, clearly map the implications of these different target scenarios. What does each revenue scenario mean for hiring, incentive plans, roles, and territory deployments?
2. Pay attention to field behaviors and leading indicators, not the lagging. By the time the lagging indicators indicate trouble, it’s too late. Focus instead on the behaviors that drive the leading indicators. Are your reps discounting more than usual? Do you see deals being pulled forward or pushed back more than in the past? What other signs of rep desperation do you see, especially if you’re normally a disciplined organization?
Monitor your leading indicators more than ever: average deal length, close rates, and average deal price, pipeline coverage. Changes in these KPIs are your trigger to dig a little deeper and execute your contingency plan before it’s too late. As a rule of thumb, senior sales leaders should be focused on two quarters ahead. Look for things that foreshadow what you might expect 3-6 months from now.
3. Reframe your time with customers. There’s no way around it. Sales leaders are most effective when they focus on the realities in the field (and avoid the pull of the corporate HQ meeting vortex). The best leaders spend at least one-third of their time in the market, face-to-face with reps, managers, and customers.
In times of uncertainty, customer conversations should take a sharper focus. Beyond the typical questions “How’s it going? How are we treating you?” probe at a broader level. Ask your customers about their business and customers. “How are your results tracking? How are your sales metrics looking compared to last year? How are your customers’ customers?” Coach your teams to have the same dialogue and create feedback mechanisms to surface this intel. What trends are they seeing across geographies, verticals, segments?
Four considerations for sales enablement teams:
1. Revaluate your programs and staffing. Imagine a world where you’re not hiring lots of salespeople. As revenue growth slows, your new hire onboarding classes will shrink. In turn, bootcamp training moves from a quarterly event to twice a year. Consider the implications to your function and team. How are you adding value with more “free time” on your hands? More importantly, how are you demonstrating your value to sales leadership?
2. Shift your perspective, knowing that every opportunity counts. In tighter markets, each incremental deal takes on greater importance. How are you supporting your teams to close more of these deals? Have a plan and be ready to shift from programs and initiatives to practical enablement of the sales process. Prioritize your activities around lead generation, opportunity management, and account expansion.
3. Build a contingency resource plan. You think you’re strapped for resources now? Just wait until the CFO looks at SGA overhead! Assume you’ll need to do you more with less people. Be ready with proposals to use part-time staff, outside contactors, or even staff redeployed from other functions to get the job done. Compared to enablement teams, many corporate marketing groups are bloated with staff and agency vendors. Can you propose ways to put these investments to use supporting direct revenue growth?4. Rationalize your tech stack. If business performance tightens, finance will come looking for cuts. Hard choices will be inevitable. Imagine it comes down to losing a team member or one of the SaaS tools you’ve just signed up for. There’s no better time than now to look at the total spend-per-rep for all the tech tools in your enablement stack. More isn’t always more, so have a view of your true must-haves vs. nice-to-haves. Be objective and make this assessment from the lens of the field’s experience.
Next year may be the greatest in economic history. Everyone loves an optimistic, especially when it comes to sales growth trends. But sales is notorious for having “happy ears” and seeing the world through rose-colored glasses.
Today’s business environment will reward the pragmatist. Times of uncertainty are when sales leaders and sales enablement teams will test their mettle. Build your plan, stay alert, be ready to adapt – just in case.
We’re conducting scenario-planning workshops with many of our clients to prep them for the unknown. Contact us to schedule yours or to learn more strategies for recession-proofing your sales organization.