Sales Training Blog

Free Videos: How to sell through a recession

Josh Gordon, is interviewed by Susanna Pollack, Sr.VP at BBC worldwide.

In three interviews on recession selling Gordon reveals how to rethink your selling mission, reorganize your sales territories, and develop persuasion strategies.  

 

Part 1(Time 10:46)

A recession is more than just selling in a slow time of sales, it is a highly strategic time where sellers who understand the patterns can gain advantage.  

 

Part 2 (Time 10:38)

Reorganizing and refocusing for recession selling

 

See all the training videos

 

Part 3: (Time 15:46) Persuasion in a time of recession. Also, download Josh's award-winning report, "What is Your Recession Sales Strategy"

The series is part of the "Access to the Experts" video series produced by The Customer Collective and sponsored by Oracle. Other sessions available through the series include interviews with the great Jill Konrath, CEO of of Selling to Big Companies, on keeping customers loyal in a recession, and Richard Nacht, CEO of Respond Media, on using social media in the sales process. FREE registration for the Customer Collective, a social network for sales and marketing professionals, gains access to all the programs.  

Go to the site.

We have nothing to fear but fear of the recession itself

Scared clients don’t buy. As salespeople in a recession we need to fight the fear. Economic fear is a group thing. When the stock market tumbles, as everyone watches, panic and fear spread. Now that signs of economic recovery are in the air, our job is to see that a new message spreads.

New York Times has provided us with a FREE 25 page study we can use to help us convince clients not to be scared. The study is actually about President Obama’s performance ratings, but will ignore the politics and focus on the results of just three questions that tell our story:

First, while the recession fearing mob may be paralyzed, that same mob TODAY believes it is better off economically than their parents were in their day. Recession and all, 33% of Americans say they are much better, and 25% say somewhat better off than than their parents were at their age. Put in this perspective, maybe things are not that bad after all.
Second, people are actually much more worried about their jobs than the economy. While there are gloomy economic stories in the media, they are not what is driving the fear. If you want to know about fear, think about the job market and ignore the headlines. Currently, 44% of of Americans are "Very" concerned about job loss.   
Finally, the American people are far more confident that things are on the right track, and by a huge margin. In January 2009 only 15% of Americans thought the country was on the right track, 79% wrong track. As of April; 38% right track, 53% wrong track. Still not great numbers but a huge increase in just a few months.    

Show your client the data. Do not get into the politics. Sharing these numbers is about showing that confidence is being restored. If you get into issues of gloating Democrats or defensive Republicans the point will be missed.  

After you share the numbers, then ask a simple question, "Could the mob fear of the recession be fading?"

Download the whole study for free:
http://graphics8.nytimes.com/packages/images/nytint/docs/new-york-times-cbs-news-poll-on-the-approval-ratings-of-president-barack-obama/original.pdf

Look out! Multinationals leverage recession for exclusive buying programs

As a direct result of the recession, 44% of all companies are asking for more price concessions. But how customers pursue cost savings varies by the kind of company they are buying from.

According to the new study by Josh Gordon from The Customer Collective, “What Is Your Recession Sales Strategy,” customers of Multinational corporations are much more likely to be open to exclusive buying programs to reduce their costs while the customers of entrepreneurial companies are more be open to partnerships to achieve the same end.

According to the report, 20.9% of multinational corporations report their customers are considering exclusive buyer relationships to reduce costs. In contrast, only 4.5% of entrepreneurial companies, 6.8% of mid-sized companies, and 3.8% of small companies have customers considering the same approach.

This is a case where bigger is better. Companies that have the size to offer price reductions in exchange for exclusive buying programs can lock our competitors and lock in customers to higher volume buying as result of the recession. In good times exclusive buying progams can be considered risky. By putting all their eggs in one supplier's basket can cause problems if the supplier's performace fails. But the recession can drive a need for cost reduction that over shadows this risk. If you are not working for a multinational corporation, look out, if they consolidate buying in the product category you sell in, your business disappears.    

In contrast, more entrepreneurial companies report customers that are interested in partnership relationships to reduce costs. According to the report, 23.6% of entrepreneurial companies have customers interested in this approach. Customers also interested in this approach are 19.4% of multinational corporations, 19.2% of small businesses and, 15.1% of mid-sized companies.

More about the survey and download it for FREE on the Customer Collective website.

A hemorrhoid, a toothache, and a recession

Mr. Obama's new chief of staff, Rahm Emanuel, is as "take charge" as they come. Democratic strategist Paul Begala recently described Emanuel's aggressive style as a "cross between a hemorrhoid and a toothache" then added, "I love Rahm, but that's a small group of us."

But speaking before a Wall Street Journal conference of top corporate chief executives Emanuel shared one sentence that summed up an opportunistic view we would all do well to embrace. Said Emanuel,    

"You never want a serious crisis to go to waste."

How great is this? Emanuel continued, "Things that we had postponed for too long, that were long-term, are now immediate and must be dealt with. This crisis provides the opportunity for us to do things that you could not do before."

These are great lines and a great point of view that casts "crisis" as a friend to constructive change. For your clients who have stopped buying because they are paralyzed by their own economic crisis, this is a different way of looking at the same set of circumstance that calls to action, and companies in action will be more likely to be buying product and services from you.  

What changes are needed at your client's company? 

Are there old products that should have been retired years ago? Your client's customers who might be angered by a product being discontinued might shrug it off in a recession. 

Are there departments that need restructuring? Reorganizations that would devastate employee morale can be just seen as business as usual in a recession.

Are there new products, departments, or ideas that need to be pushed to the front burner? Company politics will step aside if helps get through the recession.

When you sell in a time of economic crisis, part of your mission is to advocate for proactive change. As we move into a new year, Emanuel's line sums up the proactive point of view both you and your clients will find greater success by embracing. 

Read about Emanuel's comments in the Wall Street Journal

Survey: Entrepreneurs dodge recession discounting by moving faster

In the "What Is Your Recession Selling Strategy?" white paper conducted for The Customer Collective, found that more than half of multinational corporations have customers who are asking them for additional discounts "as a direct result of the recession." But for self-described entrepreneurial companies the percentage was much lower, about one in three.

Mid-sized companies weighed in at 43.8% and small businesses at 39.7%. 

The question is, "What do entrepreneurial companies do, that multinational corporations do not do, that makes them less of a price concession target?"

I say it is that they move faster. A recession is not just a time of reduced buying activity, it is a time of profound business change. In changing times, companies that can adjust their value propositions quickly will keep the highest value in the eyes of customers. Entrepreneurial companies can simply move faster. I would love to hear your thoughts. Please post them!

Download the survey for free (registration required) at The Customer Collective

 

Fight recession discounts with the ultimate strategy list

In a recession there is greater pressure on prices. I’ve been collecting a list of discount fighting strategies that proactive organizations can use to reduce the frequency and severity of price discount requests. If you know another approach, please post. I'll report the list and credit donors.

 1. Bring your client a new customer.

As your cleitn ramps up to handle the  new business you have brought in they will buy more from you.To keep you motivated to send more business their way it is unlikely they will pressure you for lower prices. Everyone wins.

2.      Break a purchase into small pieces.

Instead of asking for one big order, break up buying so it can be spread out over a period of time. For example, instead of buying a year’s worth of consulting, allow clients to buy a month at a time. This way you are not viewed as a “big” or capital purchase. When selling “pay as you go” it is possible to present a lower monthly price vs. a years contract and slip under the radar of the price grinders.    

3.      Offer financing.

If your client can not find financing from a bank to buy your product, become the bank. Offer the professional equivalent of “lay away.” (Thanks to  Denis Pombriant, Founder Beagle Research Group). It’s hard to ask for a steep discount from the company banking the purchase.    

4.      Network your customers.

If your customers are all struggling with slow times, a network where they can share ideas could be very valuable. The topics they discuss do not have   to be about your product, just about improving business. If you bring peer shared ideas that help grow your clients business, they will be less likely to pressure you on price. (Thanks to David Bonnette, Group VP, Oracle)

5.      Offer a consolidation discount.

 If you are in a business where your overall costs go down when volume goes up, offer to lower your prices if they consolidate business with you. For example, if a client now buys from three competitors, consider how much of a discount you could offer if they gave you all the business. If this plan works you are offering a discount but could make a lot more profit.   

6.      Price on profitability.

In every company, some products are more profitable than others.  Can you lower the price of a low profit item to encourage the buying a high profit one? Do the math. If volume on both products go up you could make more profit by lowering some prices.

7.      Include a free service.

 Focus on your organization’s core competencies and you may find internal expertise that could be leveraged to offer services such as advice, support, planning, or financial analytics. In slow times, some of these knowledgeable internal people may have less to do and cold be deployed to offer extra value and keep prices from deteriorating.

Now consider, if a client were to buy these same services that you could offer, on the open market it would be cash out of their pocket. Point out the dollar value you could bring in the form of services to fight recession discounts.   

8.      Bring ideas.

Get the top thinkers in your organization together and brainstorm on how to improve business for your clients. If the ideas you come up with would result in a direct sale for you, put it aside and think harder. Business improvement ideas generate business for you by generating business for your client, not sales for you. If you show up on a call and share "five creative ways a client can buy more products from us" that will be the last “new ideas” presentation you get to make.

 If you are seen as a source of ideas that really do improve a client's business you will be invited back again and again, and asked less for discounts.  

9.       Involve clients in product development.

 Start to design a new product? While still in the developmental process, show it to select clients and ask for feedback. Clients who feel involved in a product’s development are less likely to ask for discounts when the product comes out.

10.  Do a research project.

If you can do a survey that isolates best practices for your clients to win business or save money during a recession, and the insights you share are truly valuable, your value as a supplier goes up and price demands go down. 

11.  Document your value proposition’s ROI.

Anything can be measured, but ROI is often hard to directly measure because of there are many variables.  For many product categories this kind of documentation can be expensive. But anything can be measured given a big enough budget. But weigh the benefits. Discount requests often disappear when can prove the ROI of your value proposition.  

12.  Add or enhance an online service component.

 Professional customer service has become a commodity that rarely differentiates products. But if you can offer a clearly different or improved form of customer service than competition you can develop an edge. Online service is often a place where companies can establish unique support services. If you can offer something of ongoing value that your competition cannot, you can often keep pricing in place.

13.  Invest in client education programs.

 Recessions are great times to build client understanding. Clients may be more open to educational programs since their industries may be in a time of flux. But unless the education rings your client’s cash register it is unlikely they will see it as a big enough value to skip asking for discounts.

14.  Offer “sample services.”

 You have a client who buying one product from you and want to interest them buying a second product, “Sample” the second product into their next purchase. You client gets a free sample, which can be viewed as extra value, and reduce the demands for price concessions. You get a free form of advertising. 

Do you know of other strategies to fight recession discounts? Please post them. I'll repost this list and give full credit to donations. 

Prospecting in the recession? Think chocolate.

  Think about your client list and consider which might benefit from the recession. That’s right, benefit. When I talk to salespeople in recession training sessions they often first laugh at the question. But if think your client list through you may find surprises.

To get in the right frame of mind, think chocolate.

At the Etiquette of Chocolate store in Orange Park, Florida the customers keep pouring in, making the year old business recession proof. Owner Jaycel Adkins reports, “It’s an affordable luxury. Even in an (down) economy people can afford to spend a dollar, two dollars on a piece of chocolate, especially if it’s good chocolate.”

Just last month, Dove chocolate announced it will be expanding its facility in South Central, Pennsylvania to keep up with demand which is up 20% over last year, despite the recession.

There is no recession in the chocolate business.

There may be some of your clients in the same situation. They could sell products at a lower lower cost, offer products that can replace more expensive ones, offer services to disadvantaged companies, help organizations save money, or are just essential to business. Identify these companies before you competition and you have an opportunity to grow your business.

A great way find them is to check help wanted ads and web sites for job seekers. They know who is hiring and those hiring are likely those buying.

Great persecutive can be found on the Career Hub website. Earlier this year they compiled a list of 72 industries that have proven recession proof recently as well as during the 1990 and 2001 recessions. Reading it though is like a mini mystery novel. Hmmm hospitals. Sure, people get sick recession or not. Mystery solved. Next! Take a peek at the chart to get thinking who might be the winers in your market.  

See the 72 recession proof industries on the Career Hub website

And until the recession ends, do have some chocolate!  

Can your sales staff sell during a recession? Take the test.

I like to share the following test with salespeople to see if they are up for the selling in a recession.In a research study we have in the works for The Customer Collective( TheCustomerCollective.com ) many respondents have said that in the recession they are working harder for more contact time with their customers.

 No surprise, this test puts an emphasis on personal contact. But what might surprise is that I copied this test from the December 1932 issue of Opportunity Magazine, written for salespeople during the Great American Depression.

If you have a salesperson who can sell during the Depression, selling in a mere recession should be easy. Take the test:

Answer yes or no to the following:

1. Am I sociable?
2. Do I think in terms of success?
3. Do I really like selling?
4. Do I think of my customers interests?
5. Do I read sales literature?
6. Do I study my prospects?
7. Is my personal appearance a credit to myself and the company I represent?
8. Do I realize that success in selling is a matter of study and perseverance and that the element
 of luck is small?
9. Am I cheerful in the face of interruptions?
10. Am I always courteous even with unreasonable prospects?
11. Am I always scrupulously honest in my representations?
12. Do I think of selling as a dignified calling worthy of my best efforts?
13. When faced with competition, am I inspired to excel?
14. Do I know that my line of goods is the best on the market?
15. Do I try to make repeat sales?
16. Do I talk quality first and price later?
17. Do I stay with a line of goods long enough to give the line a fair trial?
18. Do I spend sufficient time perfecting my demonstration to make it convincing?
19. Do I take advantage of every modern convenience in selling, such as the telephone,
telegraph and letter service?
20. Do I canvas systematically and never skip places because they look uninviting?
21. Do I work regular hours even when the weather is unpleasant?
22. Do I put in the extra time to close a deal when necessary?
23. Do I put extra effort into selling after a poor day?
24. Do I put extra effort into selling after an unusually good day?
25. Am I determined to stick with selling despite the lure of a blind alley, time clock, type of job?

Score the test by adding up the number of questions answered favorably:
25: Star Salesman
20: A Success
15: On The Way
Below 15: Need Overhauling

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

Fighting recession fear

When you sell in a recession you are an advocate of hope.

In a time when companies are cutting back, your job is to encourage investment, and as result sales. If you have been reading this blog you know that companies that invest during recessions gain tremendous advantage over competition.The case studies are numerous and research from past recessions have documented this a fact. Mostof your clients will go along with the herd mentally and cut back like a stampede of sheep. Why don't more companies take advantage of a proven strategy for success?

The reason is fear, and not just any fear, it is the fear of the crowd. Dr. Gregory Berns, a neuroeconomist at Emory University in Atlanta put subjects in magnetic resonance imaging (MRI)scanners and watched their brain activation as they responded to different scenarios. Among the findings:

1. The brain’s “fear center” lights up when people are uncertain

2.The "fear center" is also activated when people behaved in contradiction to a group they felt part of.

Dr. Berns may have just found the roots of the "mob mentality," a fear driven, often irrational response that groups have to uncertainly.

Recessions create tremendous uncertainty, then the fear and group mentality take over.

When you sell in a recession you can over come recession fear in two ways:

1. Help your clients understand that recessions are a natural cyclical phase of a healthy economy and that all recessions end. (several posts on this blog will help you do this)

2. Counter fear with more proof. When you are on a call, you will need more factual support than normal. You may need to prove your value over and over again. You may need more documentation or research to document your competitive claims. It will take longer to make a sale. But when you succeed you don't just sell a product, you sell hope.

Read about Dr. Berns' findings in a recent USA Today article

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