How does a business not only survive, but thrive, in times of economic crisis?
Here is one story that illustrates how to move forward.
Had a client with 25+ outside sales reps and a 5 member inside team. This CEO was a farmer before he was an IT CEO. He told me a story about how his company came out of a recession stronger. A recession that knee-capped IT companies. It always stuck with me.
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He said “Scott, our sales fell about 40% in the recession. I decided that what I needed was not more sales. What I needed was $X,000,000 (I forget the number) in margin dollars. So, I totally focused on generating margin. My thinking was that even though sales had fallen, if I generated the same amount of margin dollars, we would be ok.”
And he did. And he was right.
That IT company came out of the recession financially strong when most were limping if they were still around.
That story has always stuck with me. Here are the lessons:
- Need for financial intelligence. You must know your numbers. Really know your numbers. If you do not have complete up-to-date real time financial information on your business, you will lack the clarity to make the best decisions in tough times.
- Need for the right objective. Margin dollars, not just more sales, was what he needed to survive a recession. He laser focused on the right objective and won.
- Need for the right strategy. In order to generate the same volume of margin dollars when sales were falling 40% required strategy. Think of strategy as the higher-level decisions you make to reach your objective. It is the big picture “how” you are going to reach your objective. Without the right strategy, you are just feeling around in the dark.
- Align tactics with the strategy. This IT CEO that was seeing sales plummet in a time of economic crisis did not spin the sales wheel of fortune to decide what to do. He selected tactics that aligned with his strategy in order to meet his objective.
What that company did not do is also illustrative. They did not worry about “what to do about voicemail,” “making more dials” or “how to get through the gatekeeper.”
If you don’t have the right objectives, are not working the right strategy, and your marketing tactics are not aligned with your strategy, you are just spinning the sales wheel of fortune and hoping for the best. Your efforts are akin to rearranging the deck chairs on the Titanic. You are running around doing something, but the result is still guaranteed to be bad.
I worked with the inside sales team for about a year. They ended up booking more than 3,000 (Yes, 3,000+) C-Level sales appointments. Those meetings fueled a lot of growth and profit.
That story told over dinner always stuck with me. How do some companies not only survive, but emerge stronger, when most other businesses are taking a hit during challenging economic times?
The right objectives.
The right strategy.
Tactics aligned with the strategy.
Do the work.