Recession selling: smaller companies bounce back first

During the last recession I noticed I was making more sales more quickly to small and mid-sized accounts than those in the Fortune 500. My smaller accounts bounced back faster because they could change and get past the "cut back" phase more quickly. Once the adjustments were made, they returned to business growth, and buying.

I also found that I had bigger impact on smaller accounts because I was able to meet with strategic and financial level decision makers more often and make my "save money or make money" recession proposals stick more consistently.

At the same time, at my Fortune 500 accounts, I heard a more about "across the board cuts." These clients were under more pressure from above and seemed to have fewer options to maneuver.

My experience was not unique. Similar results were found after the 1991 recession by Avraham Shama and published in the Journal of Small Business Management. Shama measured effect of that recession on small Inc 500 businesses vs. large manufacturing and service corporations and concluded,

"As can be seen, there is a significant difference in the way marketing managers in the different groups of companies describe the economic environment, with managers in small Inc. 500 companies more likely to describe the economic environment as growth, and those in large service companies to describe it as recession."

In Sharma's study, respondents from large manufacturing and service corporations saw the recession as negatively effecting their business by a full third more than respondents at smaller companies.

So when you selling through a recession put more emphasis on small and mid-sized accounts. This may be counter intuitive as we have trained to spend the most time on accounts with the biggest potential, typically the largest accounts. But recessions can be counter intuitive times where the biggest potential might be in smaller accounts.

Link to the study:

http://www.allbusiness.com/marketing/market-research/401989-1.html

Comments

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The big companies are the ones most affected by the recession.

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I have noticed that the small business start ups are the first to bounce back also. I think cause they start with less debts and obligations.

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I think big companies are more effected by recessions as compared to small one. Big companies fired hundreds of peoples at the time of recession . On the other hand, small companies not effected as much . They were working fine with all their clients. Any ways, recession has been gone..So man enjoy the day with good job !

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I must say that 2009 Recession was one of the big recession. It stayed for long time and made lot of peoples unemployed. At that time, Lot of companies also took the benefit of name of recession either they were effected or not and did cost cuttings.

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Great to hear businesses are coming back.. specially the small guys.
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I agree that smaller companies selling more product after recession than big companies.And this can be seen even when we had recession in past also.The reason for the this fact can be found in this post and you can apply them to enhance your sales.I like the idea which you shared with us.I am thankful for your effort.Nice work you people are doing.