With the latest economic downturn already upon us, naturally, business leaders across the globe are reeling. But believe it or not, this time – there’s a bright side: The benefit of hindsight. By examining the ghosts of recessions past, sales leaders can learn about what worked and what didn’t to create a recession-ready sales strategy […]
With the latest economic downturn already upon us, naturally, business leaders across the globe are reeling. But believe it or not, this time – there’s a bright side: The benefit of hindsight. By examining the ghosts of recessions past, sales leaders can learn about what worked and what didn’t to create a recession-ready sales strategy for 2023 (and beyond).
Studying Past Recession Winners and Losers
According to a 2010 study of how 4,700 public companies fared during three global recessions in the preceding decades, it seems that those who employed the most common strategies of either drastically cutting costs or heavily increasing investment generally failed to recover within the first three years post-recession, or at all. Success, it seems, came from the middle ground.
A strategy that’s too defensive and focused primarily on cost-cutting tends to create a culture of restraint and pessimism at the expense of innovation, customer satisfaction, and employee confidence and morale.
On the flip side, investing too aggressively in bullish growth projects doesn’t always yield the desired results.
In the case of both extremes, many companies found it difficult to maintain momentum once the downturn was over, and ended up lagging behind competitors who opted for a more balanced approach.
As we enter the home stretch of 2022 and brace for the storm to worsen in 2023, sales leaders can use this hindsight to their advantage by avoiding strategies that proved unsuccessful in the past and doubling down on effective ones to shore themselves up for the downturn ahead.
Channel Goldilocks to Find a Balance of Strategies That’s “Juuust Right”
The common thread for companies that not only survived past recessions but emerged from them even stronger is clear: Instead of using either super defensive or super offensive strategies, they opted for a nuanced combination of the two.
This involved cutting costs thoughtfully to overcome the immediate strain, as well as investing in certain areas of their business to strengthen their potential for growth.
In that spirit, here are four ideas that sales leaders can employ to strengthen their resilience in the storm ahead and set themselves up for long-term success once it subsides:
- Don’t rush to cut your workforce. While it’s inevitable that you’ll need to ‘trim the fat’ from your sales operations, don’t rush to lower your headcount as your first port of call.
You may find that by eliminating expensive software or processes that don’t justify the cost, you could make significant savings that are probably better for the company in the long run anyway. Companies that prioritize improving their business models, and organizational structure, and way of working instead of culling their workforce, often find that their people are more creative, productive, and loyal, because , and can focus on performance rather than worrying about their job security. Also, hiring and training are expensive, so by retaining as much of your sales team as you can, you’ll minimize the need to rehire when the economy picks back up. - Invest in the right technology. Finding software solutions that help you automate time-wasting functions, eliminate unneeded admin and maintenance work, and simplify training can do wonders for your team. A more efficient tech stack will make your team more agile and better able to handle tasks that are particularly time-consuming. Improving the data quality of your SDRs prospecting lists, for example, can save time (and time is money) and help them zero in on the most promising leads. Investing in the right tools may be a cost center initially, but it can pay dividends in the long run.
- Improve customer experience to shore up revenue. Avoiding customer churn is especially important because it’s harder to win new business during a downturn, so prioritizing retention, and focusing on upselling and cross-selling could prove to be one of the most reliable sources of revenue in the interim.
Make sure you have the right tools to monitor multiple customer touchpoints in a way that is visible to the entire company and helps surface revenue potential. Building trust and putting the customer first can give you a revenue safety net for years to come, and it’s just plain good business sense. - Be more intentional with your outbound sales efforts. Relying on the same go-to strategies you normally use, won’t cut it during an economic downturn. Businesses are tightening their budgets and thinking long and hard before investing in anything new, so with a shrinking pool of prospects, you need to coach your SDRs to be better at nurturing the opportunities and leads they have today and being more intentional with their outbound efforts. That being said, people are still looking for solutions to their business problems. If you can identify prospects with intent and reach out to them with a compelling message that addresses their pain points, you can still win new business. Effectively identifying the right people, and developing more genuine relationships to earn their trust can transform your outbound results. The sooner your team can start doing this – even now in Q4 – the better positioned they will be to set your pipeline up for success in 2023.
Using the benefit of hindsight? Think ‘historical’, not ‘hysterical’
No one can predict the future, and no one has any idea how long the current economic downturn will last. Even the world’s leading economic strategists can’t foresee unanticipated obstacles further down the road that might affect their best-guess forecasts. That said, as history has shown us, recessions don’t last forever, and “this too, shall pass.” That’s why sales leaders should take a deep breath and use the lessons of the past to their advantage. If they do, and stay agile and intentional as they navigate the storm, they’ll come through it just fine.
Join us for a free webinar on November 9th featuring a panel of world-class sales experts who’ll be discussing innovative strategies on how to crush Q4, set up your Q1 pipeline, and optimize your outbound efforts in the current dynamic climate. Register here.
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