How to beat sales competition in tough times and sales slumps.

If you own a company, or are a CEO or sales leader, there are certain moments of truth. During such moments, what you do or don’t do NOW, will largely determine where your company or sales team sinks or swims.

What sets apart companies that survived or struggled during economic challenges?
(There are links to studies and articles on this at the end of this post)

The challenges might be a slowing economy, changes in the competitive environment or emergence of competitors that are increasingly eating your lunch

If sales are slowing, for any reason, why do some firms thrive while others get weaker and some don’t make it?.

Let me suggest the best moves based on studies of companies after three recent recessions and my own experiences.

Table of Contents

However, before we delve into that, it is important to acknowledge that reality can be quite startling.

Seventeen percent of companies don’t survive a recession: They go bankrupt or get bought out.

Three years after recession, 80% of the survivors had not regained prerecession growth rates for sales/profits. 40% of the survivors had yet to reach pre-downturn revenue/profit levels. Those are sobering conclusions of the HBR study. Yikes.

But, but, but nine percent of companies significantly outperformed rivals after a slowdown.

Here are nine key factors that will determine whether your company will rise or regret during sales slumps.

Let us headline the keys, then do a deeper dive on what this means for your sales growth strategy.

  1. Improve sales and operational efficiency: Cutting costs does not equal increased efficiency. In fact, to improve efficiencies, you may have to increase spend in certain areas.
  2. Secure the business you have now: Minimize your loss of current accounts. You will soon find out how strong your “relationships” are. Assume nothing. Interact in a meaningful way with current customers more frequently. If you don’t, prepare to pay a very steep price.
  3. Develop new markets: Customer needs and priorities will change. Be prepared to meet the new needs of potential ideal clients in new markets.
  4. Strengthen your infrastructure: Bargain prices for assets and improvements will abound. Invest strategically now and be able to respond faster/better to customer and ideal prospect needs than your non-investing rivals when sales start to rebound.
  5. Plug your gaps: Every sales organization has weaknesses. Identify them and be less weak.
  6. Leverage your efforts: You must get the most bang for your time and money. The 80/20 rule applies on steroids.
  7. Extreme clarity about target markets and target accounts: Most importantly, this means deciding (clearly and distinctly) what business you WILL NOT be seeking. For those of you that soil your pants when times get tough, this is a major reason why. Don’t repeat it.
  8. Do not be mumbling “woulda, coulda, shouda” three months from now: Imagine what you would have done the last twelve or eighteen months, the different situation you would be in now if you could have predicted a business slowdown. Resolve now to not be saying “woulda, coulda, shouda” in three months as to the things you could be doing immediately.
  9. Get moving now: Want to know the biggest difference between those who survive or perish when faced with all types of challenges? Those most likely to survive act immediately. When faced with a “decisive moment” they get moving. Boom. Those most likely to perish or plummet sit, ponder, evaluate, wait to see what others do, and a “better” time to do something.

Balance the need to cut costs with the necessity to invest

Those most likely to sell more than competitors facing an economic challenge are realists. You need to survive if you wish to be around to outperform the competition. Cutting costs is necessary. But investments in some areas are also required if you wish to outperform competitors and pick up new clients and market share that simply would not be possible in normal times.

Improving sales efficiencies is the best way to cut cost of new client acquisition

Those that are most likely to outperform focus on improving sales and marketing efficiency rather than across-the-board cuts. That might mean reducing head count and other expenses, but the end goal is to be more sales efficient. To generate a lead and convert that lead at less cost than you did before. In order to increase sales efficiency, you will cut some costs, but you also might have to invest some time and money to make your sales process more efficient.

Indiscriminate cuts in sales expenses or layoffs may cut costs faster, but your ability to compete short-term and when the recovery begins can be crippled. Focus on cuts that reduce your costs of sale long term. When the recovery begins, you will be able to sell more, sell faster, and at less cost per sale. You focused on improving sales efficiency.

Invest to survive and better meet new client needs when demand returns

This might be the best time to invest in your sales process or infrastructure. The reality is that a lot of things that would help you be competitive are going to cost less for a while. There could be a lot of “good deals” on things that would help you meet future demand.

This is also the time to invest in new markets. Major client dislocation occurs during an economic slowdown and escalates as ideal potential clients have new needs and are open to those that can best meet them. There will be fewer competitors. Many that survive will be weaker. Ideal prospects are going to have additional needs based upon whatever is the new normal.

If you have had your eye on a new market, this could very well be the time to make a bold move.

How do you find the right balance between increasing sales and investing in new assets or markets?

You need to answer that question. Right now.

How to outperform sales competitors

Let’s expand a bit on the points above. The concepts of improving operating efficiencies, moving into new markets and investing in new assets come from the HBR article I cite below. There are other links to articles I recommend you read.

1. Improve sales efficiency

Focus on cutting some selling costs but also possibly make investments in some areas with the goal of permanently reducing the costs of acquiring a qualified lead and converting it to a new account. Focus on enhancing sales productivity and effectiveness. Selling faster and at a lower cost.

2. Secure the business you have now.

Assume nothing. If you are a weaker competitor, your rivals are going to do everything possible to better meet the new needs of your clients. They will try to rip your clients from your cold clutching hands.

Prevent that by increasing your communication with accounts, doubling or even tripling it. Be helpful. Be genuine. Be of service. Secure your current relationships at all costs. Those costs will pale compared to what it will take to replace that account if lost.

When in doubt do more.

3. Develop new markets

This seems a contrarian thought when so many are worried about survival. But if ever there was a time to be bold, this is it. Clients are going to have new needs and be open to better options. Their current providers may be bankrupt, just hanging on or put professional development, new offerings and service improvements on hold.

If current providers cannot meet the new needs of their accounts, it is an opportunity for you. Grab it.

4. Strengthen your infrastructure

You need stuff to sell more and more efficiently. Information, data, expertise, scripting, processes, tools, training systems. Things you put off before because of cost may very well be available for far less now. To improve prospecting and sales productivity this may be the time to invest in assets, infrastructure, guidance to improve your systems and competitive advantage.

5. Plug your sales gaps

Let’s face it. Pretty much every sales team has weak spots. Weak spots that were not a priority when business was booming. Maybe your sales database CRM is bloated with thousands of outdated low probability leads, maybe your script paths were weak, your reps were varying from plan and winging it too much, your proposal and sales conversions were lower than they could have been. Maybe you have some marginal or lower performing reps.

Gaps must get plugged right now. Marginal performers? Nice knowing you. Bloated databases filled with outdated lousy leads? Gone in a keystroke. Reps winging it on your dime? No more tolerance. Get moving.

6. Leverage your efforts

There is no time. There is less money. You need to work the 80/20 rule on steroids right now. You must decide where to allocate time and money for best results with the same care that a surgeon decides to cut.

Not all actions are equal when it comes to your ability to survive and be able to outsell your competition.

You won’t be able to do a lot of things, maybe most things, but you must absolutely do the things necessary to put you in the best position to outsell others when demand rises.

7. Extreme clarity about target markets and ideal client targets

I can really sound like a jerk quick right here. Deciding who to target for best sales results in tough times also means defining who you WILL NOT target precisely.

When the economy is great, the biggest reason sales teams would underperform (IMHO) was failure to laser focus on the high-probability highest-value targets. Sales leadership was often content to let their sales teams work a database or leads that were the equivalent of a manure pile which contained a gold nugget or two, rather than jackhammer into a solid boulder of gold easily identified.

If you have any hopes of surviving an economic challenge or sales slump, or having any chance of beating your rivals in the race for new clients that has already started, you must have absolute clarity on who to target, who not to target.

8. Avoid “Woulda, coulda, shouda” Deja vu

Reality is that we probably didn’t do half of the things that we knew had to be done and should have been done to improve sales efficiency and productivity before the downturn. Many are holding their heads in their hands lamenting their woulda, coulda, should of’s.

Three months from now, six months from now, don’t be filled with sorrow and regret, and suffering the consequences of the things you could be doing right now, but never did.

9. Get moving

If you are a business owner, CEO, or leader of a sales team, you must get your organization moving in the right direction right now.

Think it is tough now? If you decide to do nothing of substance and wait for a ‘better time” when facing tough economic challenges, your stronger or more strategic hustling rivals will start peeling off your best accounts.

Then you will be a real professor of pain.

There are “decisive moments” in the life of your business or sales career. You must act immediately on the right strategic response. Balance defensive (cost-cutting to survive) and offensive tactics (new investments, new markets) to emerge able to compete and quite possibly outperform competitors.

The study I cite found that over three recent recessions 17% of companies did not survive. Three years post-recession less than 10% had outperformed rivals to achieve breakthrough performance. The rest were struggling to get back to where they were.

If you are currently facing a sales challenge, where are you going to end up?

Article that highlighted some key points in this post and got me thinking about others.
Roaring Out of Recession

Other articles with surviving recession strategies
When A Recession Comes, Don’t Stop Advertising

How to Market In a Downturn

NEW SALES SCRIPTS BOOK

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