Deal, No Deal

OK, so this is another blog entry about the recession but, before you switch off, it isn't all gloom and doom.

One of the biggest competitors in sales generally is losing out to the 'No Decision' - the idea that your customer weighs up all the factors and competitors and decides whatever it already has will do for now. In a recession, this becomes ever more prevalent. You can sometimes present a cogent and compelling ROI case that even a mathematically challenged mouse could grasp and still your customer chooses to carry on using their old, tried and trusted methods even though they may actually cost more to do so.

You see, in a recession, when people's jobs are on the line, sometimes it pays not to be the guy who makes a bold decision and invites change because the simple reason is that it attracts attention and has the burden of accountability associated with it. It means that one slip up in the implementation, miscalculation in the ROI or delay could cost a lot - including the decision-maker's job. There is every good, but illogical reason to postpone decisions until the organisation is more confident and better off.

No Decision - Sound Business Acumen Or Stupidity?

Very often in recessions people mistake cutting costs and getting value for money. I have fallen into the daft trap many a time like when cutting a few hundred pounds on stopping staff end of month pizzas and sacrificing a piece of goodwill - I found out later that people do not forget and a simple, low cost thank you for their hard work went a long way. When a company goes into cost cutting mode, logic tends to fly out of the window and decisions get postponed or cancelled. After all, why would you increase cost when you are trying to save?

It's why I keep banging the drum about planning for a recession as if you don't plan ahead you put your company into the hands of cost cutters and at that point you rarely are looking beyond the short term. There is a thin line between making cost cuts to save a business to having not enough resources to take advantage for the future.

Compelling Factors

It means in times of recession when selling you have to be both pragmatic and innovative.

1) The first thing you need to do is to look at who you are trying to sell to and their current state. There is zero point wasting time trying to sell to companies who are in high cost cutting mode, look for others where you can achieve your success. A hard, cool-headed review of each salesperson's sales pipeline is the first starting point - make sure their forecast is realistic and that any customer in trouble is removed - don't chase shadows.

2) Take a long hard look at your Value Proposition and what it actually does to companies in terms of saving cost or producing a return. Do not be esoteric or have 'soft dollars' in there and don't make assumptions without foreknowledge - it has to be instantly measurable and applicable to that specific company you are selling to. If it cannot be easily understood then you are on to a losing battle and the essence of it has to be delivered in no more than a few sentences and must trip off the tongue of every employee not just salespeople.

3) Make your Value Proposition your mantra. Your Value Proposition may make sense to you but to customers in 'panic mode' it may just be 'noise'. Test it on people, kick it around, take feedback and adjust your thinking to accommodate. Make sure you cover off the obvious and not so obvious questions and rebuttals. Make sure everyone knows these almost verbatim. Practice delivering the Value Proposition message amongst yourselves until it comes as second nature.

4) Apply innovation. Inevitably customers may be reluctant even to hear common sense, so put yourself in their shoes - ask 'what would make me get off my seat and listen?' Inherently, the issue will be risk - if the customer makes the decision, are all the ROI expectations and assumptions real or just hopeful?

Think about how you can mitigate, alleviate or share the risk.

If your product or service has the capacity, make the cost dependent on the results in some way, perhaps in a performance related model, i.e. charge a certain price now and when the gains are delivered, then you get more of the price paid plus some extra. Get the idea of discount out of your head and think about 'sharing the pain and the gain' where possible.

5) Try to create a 'Compelling Event' as Target Account Selling call it. This is the concept of creating a point in time when there would be a detriment to the customer if they do not take your product or service - the price of inaction. It may be something as simple as for every day they do not implement they are paying £X thousand pounds in costs they should not have to. There are risks to this as there has to be a cost to your solution and the deliverables may not be instant but in many cases they are. If you can pin the Compelling Event as the next Board Meeting or similar you can accurately predict the cost of 'No Decision'. Be wary though, this can backfire if you do not have all the facts. If there are stakes in the ground like legislation coming into play it may be better.

6) Leave no stone unturned.

So often in sales, it is what you don't know rather than what you do know that determines whether you win the sale or not.

Politics, power bases, vested interests, agendas and timing can all play heavily. It is important to poll all the key players in the decision making process and in detail understand their agenda and ensure your solution hits their hot buttons. Leaving things to chance or in the hands of your champion alone may actually play against you if the politics are not right. In a recession, many things can happen quickly and the most obvious is that your coach or sponsor could actually leave through their own accord or by other means. It pays to get round all the stakeholders and sell your solution and its benefits high and wide.

7) Replicate success and analyse failure.

Failure can be your friend - you need to understand why you failed in order to create success.

Make sure you ask your customers for a detailed answer as to why you failed - price is a stupid response because price can be a small factor in an ROI equation so make sure you get the real facts. Then address the reasons for failure and incorporate the answers into your Value Proposition or indeed, if you feel you cannot address the concerns of that type of customer, make sure you do not try to sell to more of the same; keep away from repeating failure. When you find success, make sure you understand why you succeeded and then replicate the success in as many similar customers as you can.

8) Do not stand still.

The worst thing that can happen in a recession is that companies become complacent that things are going ok.

We have seen the frightening speed at which this recession can strike seemingly impregnable household names. All too often when you analyse your business you will find an approximation to an 80-20 rule defining how your current business is generated. If you really understand your business you will know that if 20% of your customers produce 80% of your revenue or profit then it is obvious that even the loss of one major customer could be the difference between surviving or not, and the smaller the company you are the harder such losses hit. It means you have to up your work rate to keep existing customers happier and find more and more new ones.

Recessions are not for the lazy.

9) Talk to people.

Make sure your existing customers know why they buy from you, check if they are happy and are getting enough from you.

If you can, solidify the relationship by getting agreements in concrete or even opening negotiations ahead of schedule. This may sound barmy if you are not far into a new contract but if you are inside 6 months to the contract renewal, you can bet your bottom dollar your customers will be actively looking to reduce costs and so if you are proactive in addressing this it can swing to your favour. Look early to find innovative ways of perhaps offering something for renewing the contract EARLY but in return for LONGER or a crack at more business within the customer. Think ahead.

10) Make sure all your staff are bought in.

Recessions are tough times and innovation and extra activity will mean uncertainty and worry.

Make sure your staff are part of the solution by getting them to contribute ideas and parts of the Value Proposition. If they know the score early, they will be that much more bought in. Your staff are your most precious assets at all times and never more so in a recession - only cost cutters see them as numbers on a spreadsheet, you need to see them as your weapons to survive and thrive.

Recessions are mean old beasts and customers do all sorts of irrational things. Think one step ahead, be innovative, work hard and above all sell smartly.