Four Steps to Thriving in a Down Economy
November 10th, 2008Selling in a down economy is hard. The pressure on your sales team is huge because the whole company is focused on your performance. Customers start trying to reduce costs and they’re more open than ever to looking at new vendors. The competition starts dropping prices in a panicked effort to keep their doors open. A down economy can completely change the landscape of your industry.
The other day Scott, the owner of Mortgage firm, and I sat together over a cup of coffee as he told me the woes of the lending industry. Companies, major companies, were going out of business on a daily basis. Last year there were 500,000 lending agents and now one year later there are only 175,000. That’s a 65% decrease. After a brief pause Scott looked up from his cup of coffee with a mischievous smile, and told me that his company had just had their best month ever.
What does Scott know that most people don’t? How can his business be great in such a devastated industry? Scott knows rule number one of prospecting in a down economy; don’t panic. He knows that typically more competitors are going to leave the market than customers. Even though 65% of his competitors were gone there hadn’t been a 65% drop in demand for home loans to match.
With competition leaving the market place opportunity is everywhere. Even if your competition isn’t going out of business they are most likely cutting back on sales reps, marketing budgets or services and products that help them be competitive. Their sales forces become paralyzed because they’re convinced it’s too hard to sell and they use the economy as their excuse.
The companies that succeed in down economies don’t panic. They know that this is their opportunity to get better. They know that if they can sell now then when the economy starts to pick up again and competitors reenter the market they are going to be far ahead of everyone else. But even if Scott didn’t panic how did he avoid becoming one of the 65%? He followed step two of sales prospecting in a down economy; he surveyed his current customer base. A down economy is the perfect time to start talking to your customers about why they buy from you. This is your opportunity to learn about your company through your customers eyes. Your customers will tell you what you do well and where you need to be better. This is the time to determine who’s thrilled with you business and who’s not.
In a down economy your competition is going to target your best customers. If you give you customers the slightest reason to leave you, your competitions are going to do whatever they can to take the business from you. However, you can counter this by using the information you gain from your customer surveys to shore up any weakness you might have with your product or customers experience.
The thrilled customers are going to tell you what they love about you. These customers are going to help you define what you do best. And what you do best is exactly what you should focus on selling while in a down economy. If your customers love the service you provide; you are going to emphasize that while you’re prospecting for new business. If they love the quality of your product; you are going to emphasize that while you’re prospecting for new business.
After Scott’s company talked to all of his clients they were able to easily identify the customers that were thrilled with his business. This led him into step three of sales prospecting in a down economy; increase your sales through referrals.
This is a time when sales reps should focus on finding the prospects that are most likely to buy from them instead of taking a blanket approach that can work well in a good economy. And one of the most effective types of prospecting is referral sales. Unfortunately, many sales reps forget to ask their best customers for referral business or if they do ask it’s often been months since they’ve asked for referrals. This is a time when really focusing on asking for referrals from all of the thrilled customers you found is going to be critical. Even though there is a lot of opportunity in a down economy the amount of time it takes to close a sale is going to increase so sales reps have to spend their time as carefully as possible looking for the highest quality prospects they can.
Scott’s then implemented the fourth step to sales prospecting in a down economy; innovating. Now armed with the opinions of his customer base he could not only focus in on what his company does best but he can get even better at it. While most of his competitors where asking how they could get more business using the same methods they used in an up economy, Scott’s company was asking themselves how they could get more sales by being better than ever before. By taking the time to define what you do best and taking the time to find ways to do it better you will create new ways to create more value for your prospects and differentiate yourself from you competition. These innovations will lead to more customers and higher profits.
Scott went back to basics. When he realized the economy was slowing down he didn’t panic. He realized this was going to be an opportunity. Then he learned everything he could about his business through his customers’ eyes. He fixed the few problems he found. Then he asked his customers to help him find more business. Finally, he chose to innovate and get even better at what his company was doing. Is it a back to basics approach? Ya. Is it an effective approach? You bet.
You can take the same successful approach with your company. Never forget that this is your opportunity to separate yourself from you competition because in a down economy not only do you have the opportunity to survive; you have the opportunity to thrive.
