Economists say we are experiencing a global combination of factors that will likely lead to a recession again, and soon. Inflation, supply chain issues, rising interest rates, general uncertainty - all add up to economic unease.
Bracing for it, many companies are starting to cut back on spending, and it may not be long before we start seeing layoffs and other substantial cost-cutting measures become widespread.
In Sweden, we have an expression: “Man kan inte bromsa sig ur en uppförsbacke.” It means, “You can’t apply your brakes to go uphill.” It refers to the human urge to pull back or slow down when we encounter stress or worry. Sometimes slowing down in these circumstances can be good, but sometimes it’s a mistake that you’ll pay for later.
If you’re looking at potential cuts to your sales investments - layoffs, training cuts, letting go of consultants, or pulling back on investing in strategy, process, or technology - here’s why you should think twice before you do.
Unlike private companies, public companies are judged on a quarterly basis according to how well they are delivering profits for their shareholders, who often lack insights about what it takes to successfully run the company.
This fact means that public company leadership is under constant pressure to deliver on a short-term basis in a way that makes outside parties - the shareholders - happy. This is not always beneficial to long-term strategic growth.
Private companies sometimes model their behavior on that of public companies, but this is an area where private companies can actually gain advantage by taking a more long-term view. If you’re privately owned and reasonably well capitalized at this point in time, you would do well to consider whether you really want to apply the brakes while you’re going uphill. In fact, you might want to consider applying the gas instead.
For sales professionals, recessions can mean working longer hours, making fewer sales, and offering more discounts. This causes stress on the sales team, often leading to poorer customer outcomes. It also means you make less profit on more work.
What if, instead, you encouraged your sales team to slow down and invest in building momentum. Instead of discounting, invest in positioning, strategy, process, methodology, skills, training, coaching, and better technology to support your team.
By applying the gas instead of the brakes, you can reduce the urge to discount and increase your ability to compete while everyone else is cutting back.
During tough times, salespeople need to be able to communicate value. The minute they start competing on price, it’s a race to the bottom. This is always true, but never more true than when everyone is cutting costs.
For this reason, it’s really important that you execute on a unique way of selling that preserves your pricing and builds strong relationships with customers. Instead of cutting back, double down and invest in HOW you sell.
Nobody loves tough times, but it doesn’t have to be all bad. Companies that invest during the downturn will be well positioned to shoot ahead when the economy changes again. I would love to know what you are doing to prepare for the new economy. Shoot me a message on LinkedIn and let me know.
George is the founder & CEO of Membrain, the Sales Enablement CRM that makes it easy to execute your sales strategy. A life-long entrepreneur with 20 years of experience in the software space and a passion for sales and marketing. With the life motto "Don't settle for mainstream", he is always looking for new ways to achieve improved business results using innovative software, skills, and processes. George is also the author of the book Stop Killing Deals and the host of the Stop Killing Deals webinar and podcast series.
Find out more about George Brontén on LinkedIn