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The Downturn As A Sales Opportunity


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A downturn can create opportunity

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The Downturn As A Sales Opportunity

  1. 1. Downturns Create Sales Opportunities Once again, I am privileged to have a guest columnist and friend grace the pages of EDT with a timely editorial. Tim Brown and I worked together during his tenor in executive positions at Sprague Electric (Vishay). Tim was employed by global companies such as Murata, Morgan Crucible, Aerovox and Ark-les before establishing his own consulting firm, Brevis Consulting, located in Mattapoisett, MA ( An experienced international manager, his clients have found him to be a viable bridge into the European and Asian markets. He understands the cultural differences, and his background and experience have proven to be a valuable asset to his high profile clientele. When the economy cycles down and business softens, most sales managers are faced with the inevitable finance department driven budget reductions just as the need for order input is its most critical. Often if the finance side of the business is calling the shots, budget reductions come with specific instructions; usually top of the list are immediate reductions in travel and spending on promotion. These mandates are often accompanied, or followed quickly, by mandatory across-the-board reductions in headcount. Arguing that sales isn’t the place to cut effort during a downturn sometimes resonates with management. But more often than not, the sales manager is faced with some percentage of reduced budget expense he must contribute to bolster the company’s bottom line. Often the easiest thing to do is to put your head down, do exactly what has been asked and manage your way through to better times. But where are you going to be when better times arrive - in the same place you left when things turned down, or ahead of your competition and poised to win in the upturn? How you manage during a downturn can have a profound impact on your performance during the following upturn and on your durable market position and future success. A downturn creates both the motivation and justification to take stock of the organization and reposition it to take the maximum advantage of the recovery.
  2. 2. Let’s assume that, like most of us, you have lost the argument with the CFO that cutting the budget of the people landing orders when orders are needed most doesn’t make sense. You now have to deal with a fixed budget reduction and create competitive advantage from what you have left to work with. It’s time to: • Quickly redefine your Objectives and Sales plan to fit the current market • Reevaluate your Customer Portfolio and decide who is on the A list • Refocus your remaining Sales resources on Future Growth Prospects • Co-opt Underutilized Operational assets to support Selling • Shift Sales Effort more heavily to Customer R&D • Present your Innovation aggressively and improve your positioning • Rethink and Restate your value proposition to leverage current Customer needs • Increase Velocity in the internal parts of the Sales cycle Quickly redefine your Sales Plan and Objectives. A downturn changes the sales world dramatically. Unless you accurately forecasted the downturn and carefully built your plan around it, you likely are facing a plan that is now off in the weeds when compared to conditions on the ground. It’s time to revise your plan and focus on what can be achieved in the current conditions. Don’t go forward measuring against impossible goals; people will just give up. Set new achievable (but challenging) goals and measure against them systematically. Every objective in the sales plan should be reevaluated, restated and clearly assigned. Refocus on what is possible and achievable. Motivate your team to accept the new challenges. If management insists on tracking the old plan then do it, but manage to your new set of objectives. Reevaluate your Customer Portfolio and decide who is on the “A” list. We all have customers who have been with us forever but are going nowhere, those who demand a disproportionate amount of attention for the billings they generate or, finally, those who are just not profitable. Resources during a downturn are going to be tight and one way to free them up, so they can be focused where they will do the most good, is to figure out who your least productive accounts are and pay less attention to them. Put those freed resources to work where they will make a difference when things turn back up. Take care of your “A” list. There is nothing as healthy for any organization as a periodic forced ranking of customers and a revision of the resources allocated to them. A downturn creates a need and an opportunity to tackle this task with a renewed sense of urgency and the potential for a hefty payback.
  3. 3. Refocus your remaining Sales resources on Future Growth Prospects Once you identify who your best prospects are, focus on them. Ask yourself what the segments and customers are within the portfolio which represent the future. These customers deserve extra attention during a downturn. Redeploy your top people to take care of them. Improving your position with your new “A” list will insure that you are positioned to take maximum advantage of the recovery in the short term, and improve your long term success at the same time. Sure, you can’t abandon customers who are important contributors to your sustaining sales volume, but reduced product and transaction volume during the downturn will allow you to focus limited direct sales effort elsewhere. Have your inside salespeople take up the slack with a systematic communication program which keeps the company in front of these customers at a lower cost without sacrificing your account development goals. Co-opt Underutilized Operational assets to support Selling Most operations’ organizations have less to do during a downturn; capital spending dries up, projects are put on hold, production levels are down and the intense activity that accompanies a high level of business dies off. These underemployed internal assets can be co-opted into your sales effort. Design engineering and Quality personnel likely already interface with customers and understand the sales environment. Other internal assets clearly are well liked by customers. It’s time to get these people out front in support of your revised sales plan. Customers love to see “the inside guys” and having them available creates opportunities to get in front of your customers with something interesting to say. You can discuss everything from design changes in support of cost reductions, to better coordination of your quality objectives. Putting these “inside” people on the sales team may allow you to reach parts of your customers’ organizations which have been unavailable until now. Now is the time to work on those relationships which will carry you well beyond the upturn. Shift Your Sales Effort more heavily to Customer R&D Your future winners on the “A” list aren’t going to stop thinking about the future, that’s part of what will make them winners. Their R&D may be reduced, but it will continue to work on new products or projects. Now is a time when refocusing your resources on this interface can outsell your competitors, who are sitting at home paying strict attention to the travel restrictions mandated by their finance folks. Also, R&D is a natural place to target with your newly “liberated” inside technical resources. Access during a downturn is always easier if you have something interesting to offer. Bring some challenging ideas with you or dust off some old ones, repackage them and offer them up in the new environment. Use your competitors’ absence to position yourself as the go to technical resource. Connect your inside people to key customer players and plan to sustain those connections in the future.
  4. 4. Present your Innovation aggressively People want to take ownership of a good idea, especially during a downturn when everyone is trying to demonstrate their value to management daily. Now is the time to present your innovative ideas. Not only do people have the time to listen, they are hungry for some good news. Downturns make people listen especially hard to cost reduction suggestions. Don’t have anything new to offer? Revise your “good” old ideas which were rejected when times were good and everyone was busy with other priorities; splash a new coat of paint on them and present them again. Perhaps you can pitch to a slightly different audience. Now is the time to forge partnerships based on common goals - tee something up and go for it. Build a relationship based on shared value. Rethink and Restate your value proposition- loudly Take some time with your team to review your value proposition. Its not always true that that what you were presenting in a strong economy still resonates with buyers in a down market. Customer’s needs change in a downturn. Measure your value proposition against the customer’s new reality. Can the organization offer new value which addresses more of those current needs? If the answer is yes, then change your value proposition and make sure your customers (at least the A list) know all about it. Get out in front and make your value visible. Shout it out! Increase Velocity in the internal parts of the Sales cycle How many times have you missed a customer promise because your organization was “over committed” with internal and external projects? Downturns reduce internal workloads and make resource available. Use this “liberated” resource to increase the velocity of your responses to your target customers, and figure out a way to preserve this advantage when things turn up. Conclusion Not every suggestion above will fit every organization, but some will. The key to successfully working through a downturn is not to accept the inevitable but to use the opportunity to create the future.