Surviving A Recession - Some Sales Tips

OK, so I think we are all agreed we are in a recession. Technically, it's 6 months of economic decline but the reality is household named businesses toppling like nine pins, major Corporates laying off tons of staff and Government Ministers working all weekends to save our Banks.

I still am staggered by the number of people who are not actually planning on tackling a recession but I do know they will ultimately feel its effects - good or bad. So here are some tips which are rehashed from a previous blog article but are worth repeating:

1) Review Your Sales Pipeline

Take a look at your CRM output, spreadsheets or fag packets and sit down every salesperson and review in detail, deal by deal, their entire pipeline. Ask the tough questions, take out those companies who are cutting back, take out industries suffering most from the downturn and focus on the business which is real and stands a decent chance of coming in. Then look at the gap between the new forecast and the old and the expectations of the budget. If there is a significant difference then you know the extent of how the recession is going to hit you short term.

Plan accordingly.

2) Get Close To Your Current Customers

Throw a 'Blanket of Value' over your current billing customers. Go visit them, look at their plans and requirements, make sure you can fulfill them and then make special deals to ensure there is no chance of the customer shopping around. Go that extra yard on service, check they like it, make sure staff are focused on delivering more. Do not be afraid to surrender some profit or extra service to ensure you nail a longer term commitment as these customers will help you ride the storm and be the bedrock of sales when the recovery comes, so give them something in return for a commitment that suits you.

3) Review Your Value Proposition

Whatever your 'Value Proposition' has been to date, it probably at least needs emphasising but more likely adjusting to make sure it is applicable to customers experiencing a recession. It needs to focus on delivering real benefits which can be quantified and are real to customers not just what you think. It cannot be secondary gains or long term justifications, it must be real, and immediate. Customers are not going to look at the long term at times like these and accountants will be far more unreasonable in their demands on returns so be prepared.

4) Make Sure ALL Staff Know The Value Proposition By Heart

It is zero good that only salespeople can expound and explain a Value Proposition. All staff must be bought in, know it by heart and be able to properly and succinctly explain it whenever it is required. Make it second nature.

5) Gear Bonus And Commission To Survival

Most budgets will have to be trimmed in tough times and many salespeople will be expecting to keep their earnings the same while moaning about downturns impacting their business. You have to work on your bonus and commission plans to make sure they at minimum are paid out for survival and nothing less, then accelerate earnings thereafter much faster than normal. The key to any Compensation Plan is having the flexibility to drive behaviour.

6) Join Staff In To The Cause

So many managers will retreat into closed rooms and debate in secret the effects of a downturn, focusing on things they believe their staff should not know or are not capable of handling. It is far more powerful to join in staff to the issues, debate them openly, ask their help and advice and implement solutions with their complete buy in. The power of communication engenders trust and a commitment to a common cause - there is never a more important time to make the staff part of the solution rather than part of the problem.

7) Delay Recruitment Decisions Where Possible

I have seen so many businesses fight to back fill lost heads at the wrong time only to find knee-jerk decisions cost much more in the short and long term. Stop, think about whether you can survive before refilling open positions and think long and hard about what power you actually need. Those managers who scream about it need to step back and look at the bigger picture.

8) Get Creative, Put The Power Where And When You Need It

For open heads, think about innovative, short term measures like contract, highly commissioned salespeople who can put the muscle in where needed but have easily changeable contracts. Think about what sales efforts are best suited - telesales for rapid, wide reach rather than a highly experienced field sales if that's what is required.

9) Focus On The Successes

Think about the recent successes and what sort of customers they are - look for similar ones and take the Value Proposition to as many of them as possible and fast. Clone success - focus marketing into a short term gain and reduce branding exercises which are costly, esoteric and not easily measurable.

10) Make Every Penny Count

Look to your costs and cut out spending on what is not required for the short term. Marketing and training are budgets which are easy to adjust but think about other areas first as these could be vital parts of the armoury to fight downturns and take advantage of the upswing. Look at how salespeople spend their expenses - cut Business Class Travel, rethink mileage costs, mandate lower star hotels, make people justify sales or other trips before allowing them to go.

11) Redouble Efforts

Make sure that work rate rises. The number of visits to customers by the average salesperson across a variety of industries is less than 2 per week - it's very poor. Set goals for the number of phone calls, demonstrations, quotes, meetings etc - call them KPIs if you wish but set minimum standards in line with those of your best performing people.

12) Value Your Staff

If I could have £100 for every company who use a recession or downturn to rid themselves of 'Poor Performers' and feel as if they have done something clever, I would be a wealthy man. You need your staff highly motivated when the recession bites and the fact you have not taken action on poor performers before it starts only shows poor management. Culling staff during a recession is a desperate measure and demotivates staff. Focus on getting poor performing staff up to a higher level. Make the Value Proposition simple and easy for them to understand, help them deliver it properly, show them where to call to get business, what to say and who to.

Give them more help rather than less.

Selling In A Downturn

There are many tactics we can do to help trigger sales but the most obvious are to make sure you profile a viable customer to you, know where to find them, know who in the customer needs to hear your message, know the customer's business enough to be sure you know what your product and service can do for them and quantify it, rehearse and check your message to ensure it rings true, customise the message for the specific customer, and then call and visit as many of these potential customers as you possibly can.

In reality sales is a simple numbers game - the more people who fit your profile you can get in front of, the more chance you have of gaining sales. In a downturn, sales efforts should be redoubled, whether you are set to benefit or possibly lose out - now is the time to work harder.

The one thing I strongly advise is to not take the next 3 months or so at face value. Make sure you ask all the tough questions now and do your planning to mitigate the effects of a recession.

Complacency Is Your Biggest Enemy.

Another Day Another Microsoft Nightmare - How Do They Get Away With It?

As a small business, I use Microsoft Automatic updates to make sure I get the latest security and bug fixes automatically installed but once again I have awoken to find the 'refreshed' Internet Explorer IE 7 cannot find the internet.

Before you say it, I am using another machine to write this.

As I write

As I write, I have been talking to some poor soul in a country on the other side of the world on my landline and his VoIP with what appears to be a bunch of animals in the background cackling and whooping more like a zoo than a professional call centre. This is the world of Microsoft Support. So far, due the extremely poor phone line and the interminable series of scripted questions, we have spent 60 minutes on the line to determine indeed my browser is not working and yet my external connection is fine, as was given in my opening statement where I told the poor fellow I could still receive mails in Outlook. Exactly the same problem as last time. The helpless chap has just realised that in fact I was routed to the wrong area and so is incapable of solving the problem. This after just over 60 minutes, so I have to call back on the same number.

When The Pursuit of Profit Stifles Service

This is the second time I have experienced the exact same problem. I already know that a rogue patch or update is causing the problem and all I need to know is which one it is, how to uninstall it, wind back the clock to last night so that I can do what I am supposed to be doing, which is trying to do some business.

The problem here is that Microsoft have long lost the connection between service and satisfaction. Maybe some day it will suffer a significant slowdown in sales and profit to realise just because you are big, you can't forget the customer.

That will be some day.

Responsibility vs Accountability

Definition of Responsibility, courtesy of the Merriam-Webster Dictionary:

1: the quality or state of being responsible: as a: moral, legal, or mental accountability b: reliability, trustworthiness
2: something for which one is responsible : burden - has neglected his

Definition of Accountability, courtesy of the Merriam-Webster Dictionary:

: the quality or state of being accountable; especially : an obligation or willingness to accept responsibility or to account for one's actions - public officials lacking accountability

In this day and age of finger pointing or what is often referred to as 'blame culture' or to put it in legalise 'litigious society' there is often a tendency to blame others. At some extremes it is the trigger happy, ambulance-chasing lawyers as parodied in the Simpsons where 'no-win, no-fee' lawyers bring cases against companies or authorities for seemingly innocuous and possibly self-inflicted accidents. It is perhaps indicative of human nature that we always want someone or something else to blame for our misfortune or even our failings (cf: my earlier blog post on the subject of failure).

However, equally we can look at the issue from the other viewpoint that asserts for instance, that if a car manufacturer makes vehicles with faulty brakes that cause a number of accidents, surely it should be brought to book for the consequences. In this instance, the manufacturers will do everything within their power to deny or pass on responsibility for the accidents even if the facts glare them in the face.

So this article looks at when someone or something assumes responsibility, should there be an equal expectation of accountability?

Assuming Responsibility

When I was a young manager, due to being in the right place at the right time and attrition of managers above me, I got landed with, at the tender age of 26, full responsibility for a whole division of 56 people, turning over £13m and all the graphs pointed upwards. It was a massive step up for me and I couldn't begin to tell you how proud I was to be promoted. For a while, everything went according to the script - sales continued to rise and there was little I had to do to keep it going, it seemed a little easier than I thought it would be. Then came the bombshell. Around 70% of our business was based on DEC products at a time when DEC had the MicroVax which was all the rage in the City - orders were put out with the milk-bottles. Then DEC hit some margin issues and decided, pretty much without notice, to revise their strategy and take the major account business themselves through a new organisation called DEC Direct. In order to prevent companies like ours continuing to service those customers, our discount structures were adjusted and it became unviable to sell to these accounts. With over 70% of our DEC business in such accounts, overnight the party ended and I faced graphs hurtling downward.

I had failed to understand the implications and because of it our division hit a wall, People started to leave, we had to make redundancies and we had to re-invent our business and do so fast. It was a baptism of business fire in a short space of time. A year later and we had retrenched but the business was smaller and I had aged.

What it taught me is that responsibility is huge burden.

Assuming Accountability

What I hadn't realised at the young age was that with responsibility comes accountability, in equal proportions. It is all very well to accept the promotion, a flashier car, and the kudos of managing a team of people who look to you for guidance and wisdom, what I hadn't expected was the weight of those eyes and those of my executive team above me burning holes in my back when things started to go wrong. Despite my ifs and buts about what our lead vendor had done, I was responsible for the plan and accountable for the results. As the Americans would say, 'That's why you're paid the big bucks'. And so I learnt very much the hard way.

I can't tell you much it hurt me to have to make people redundant for the first time in my life - literally grown men cried in my presence - and how lonely I felt in accepting the blame for the catastrophe that lay before me.

But if there was one piece of credit with which I emerged from the episode was that I understood and accepted what responsibility and accountability really meant. It is facing up to your mistakes, your failures and dealing with it.

Learning the difference

Having had my epiphany in business, I quickly learnt that accepting responsibility had its downside and so it was best to plan with that in mind. It did not stop me from making mistakes and failing again as in my own business later but I never again flinched from accepting the responsibility for my actions in business. There are always things you cannot account for but that's part and parcel of doing busines, you just have to take it on the chin, absorb the lesson and change your plans to accommodate and mitigate. From it you can definitely plot a better route if you can accept accountability.

I do get annoyed when CEOs of major companies fail to be accountable for their actions. I don't want to harp on about it but the current economic crisis has cost very few senior jobs so far, while in government we see sloping shoulders daily for serious errors for which ministers and their senior aids have responsibility and it seems no accountability.

Repeatable behaviour

Linking to my early blog articles, once again it is the thread of denial and failing to accept and embrace failure which leads to lack of accountability. This becomes a repeatable behaviour. Executives and ministers who use these blame-shifting tactics ultimately make big mistakes for which we have to pay. I cannot help thinking that the war with Iraq which has cost the lives of too many brave soldiers from several countries, mainly USA, is a direct result of repeatable denial of accountability. As President Bush glad-hands people on his farewell tour as did Tony Blair, he seems to be oblivious of the legacy of two terms of office which has left the world a much more dangerous place.

The CEOs of most of the major banks and their executive and trading teams will never repay the vast monies in bonuses they have earned on their trades despite the fact they have written off almost all of the gains in the last few months. They will survive by invoking the theory of market forces betting against them whereas most people on a bar stool at your local pub or bar could have accurately predicted the crisis we are in financially. And even when they get fired they walk away with hundreds of millions of dollars as in the case of outgoing CEOs at Citigroup and Merrills.

Why accountability is important

So rather than pick on a negative illustration let me turn to the positive. One of my favourite films was Ron Howard's dramatisation of the ill-fated real life mission to the moon, Apollo 13. By this time the amazing feet of taking men to the moon, landing and safely returning had become old-hat so much so that TV stations did not even air the launch of the mission. A day or so into the mission, an explosion in an oxygen tank ruptured the craft and vented the precious gas and caused a failure in power - the craft with its human contents was in mortal danger.

The catastrophic failure of the mission was fast becoming 'Nasa's worst disaster' according to an official to which Gene Krantz, the Apollo 13 mission controller, replied, 'With respect, sir, I think this will be our finest hour.' That moment, whether precisely true or not, was when Krantz assumed total responsibility and accountability for the outcome of the mission. To take a JK Rowling observation, failure had allowed Krantz 'to strip away the inessential' and concentrate on one goal to the detriment of all others - to get the astronauts home alive.

The rest is history but what that assumption of accountability did was to allow the team to work on a single, collective goal with the freedom of a lack of accountability for the outcome - that was Krantz's job. When the Grumman Rep was asked if the Lunar Excursion Module could be used to be a life-raft for the crew, he waved his hands and said the craft was not designed for that. Krantz immediately takes the accountability from him and the Rep instantly works with the team to help solve the problems.

The illustration here, at the extreme of real life, is that accepting responsibility and accountability in equal measure, gives those within your teams, company, organisation the power to do their job with a single goal in mind. It is powerful way to empower your staff and join into to common goals.

Applying the principle to business

So how can the Apollo 13 'success' be applied to business? Well, let's take a perennial example of management abdication of accountability - the convenience of Call Centre-based customer service centres. We could go on about this as everyone has had enough bad experiences to prove the concept is flawed but bear with me. The biggest problem with call centres is not that they are manned by idiots but that they are manned with intelligent people who are unempowered. How many times have you called a call centre with a problem or issue and you get stone-walled so you ask to speak to someone in authority? The line comes back 'I am not allowed to do that', or 'There are no managers here', or ' I will take your number and have them call you back' (a neat fob off) or the ultimate sin 'They don't take calls'. The last one is the one that drives me insane - why would a company want its managers or directors not to take customer calls? It is a complete and utter abdication of accountability, let alone responsibility. It basically says, these people, if they exist, don't just not care but taking calls actually gets in the way of their work such as it may be.

I will make a basic assertion - any company that tells managers they should not take calls from customers has no right to be in business.

The power of accountability

I will give you an example of the power of accountability at work. When I was MD at Genesys I would occasionally get an explosive call from a client whose meeting had gone wrong and, because they could not get any gratification from our support staff, they got hold of the MD's name and called. It surprised me as our complaint statistics were always encouraging. But whenever I got such a call I went overboard to sort it out, inevitably giving away a large credit to pacify the customer. Meanwhile, our support staff were complaining that they should not have to handle abusive customers, rare though it was. The penny dropped eventually when customer support staff, not me, suggested that it would make a huge difference if they could, at the time of initial call, have the responsibility to hand out credits if need be in order to stave off escalation. We decided to give it a go and authorised credits up to the cost of the call. The effects were dramatic. I certainly got no calls at all from irate customers but amazingly credit notes fell immediately and the support staff were far more motivated in their work.

By my taking accountability for the results, the support staff had the freedom to exercise their judgement on each call in order to achieve the goal. The only calls I got afterwards were ones to praise individuals who had helped out.

The lesson to learn here is brilliantly illustrated in Geoff Burch's book 'The Writing is on The Wall'. By management assuming accountability and devolving responsibility you can get dramatic results in terms of customer service and loyalty while motivating the staff through empowerment.

As a final illustration, I recently had an issue with my gas bill from E.On to the tune of £900 extra charges for 6 months of use - something amiss in a reasonably average household. The customer service rep who I shall call James could only tell me to read my meter and send in the result. Knowing the meter reading was not the issue, I asked to speak to a manager as clearly the conversation was going nowhere and out came the usual lines of the managers don't take calls and I don't know who the directors are, which are all red rag to a bull for me. Having ended the call in a slight rage I called the parent company in Germany who directed me immediately to the Director's office where a nice lady listened, argued a little but subsequently came back not only with the correct bill but with a goodwill gesture too. If only the young representative in customer service could have been empowered to do this, instead the poor guy will probably get disciplined for not fobbing me off properly.

Accountability leads to empowerment

Accountability by senior managers allows the organisation to have the freedom to exercise its imagination and creativity to get results unencumbered by the restraint of firing if it gets it wrong. What is more, by taking on the burden of accountability it will foster accountability in your team members who will more readily buy in and play their part in achieving the common goals - feeling the hurt if they are not achieved but sharing the glory when they are. Few business people really understand the difference between responsibility and accountability - but I always think it is on the one hand accepting a flashier car to do a job and on the the other earning it.