Paul gives you great tips to face the next recession with opportunity on your mind versus struggle.
It’s fine. I’m fine. Everthing’s fine…Not! You can’t outrun a recession. Be prepared.
Review your pipeline and increase your activity level by 25%.
Do not…DO NOT…lower your standards. Even in a recession, be sure the opportunities you are pursuing fit the profile for good business.
Identify problems your customers may be facing. That will open up some doors for you to solve those problems.
During a tough time, the competitive herd will be thinned. Be there for their customer base. Those customers will need someone to fill that gap.
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How should I prepare to sell in a recession?
(Transcribed from podcast)
On today’s episode, we’re going to talk about preparing for the next recession. Here’s what prompted this episode. Just last week, I was in Arlington, Texas delivering a keynote presentation. And after my presentation, we had an economist come up and he talked about what’s going to happen this year, next year. And let’s just say there’s a good chance we’re going to face a recession. We don’t know the exact date, but we do know is that there will always be another recession, right? But there’s always going to be a time of expansion that follows. So, what we’re going to do today is give you three ideas—I may give you a bonus idea—on what you can do right now to prepare for this recession. Because, if you’ve listened to the show in the past, you know that tough times often create more opportunity than they do struggle.
Now, before we answer this question, just a reminder, make sure you go to Amazon, Barnes & Noble, wherever you get your books, and pick up your copy of Selling Through Tough Times. Selling through Tough Times is your go-to guide to thrive during this next recession. In this book, I will detail how you can take advantage of any downturn, how you can opportunistically view your world so that you see things your competition will not see. So, tough times are good. Now go and pick up your copy of Selling through Tough Times. You can also visit toughtimer.com. There we have several resources for you to help you prepare, to help you craft the right message, to help you present a more compelling reason why customers should buy from you, even in a downturn.
So let’s get back to that question: “How do I prepare for a recession?” Now, the real challenge we face is that, for some reason, we think it’s not going to happen to us. We think that, “Oh, everything will be fine. Our industry won’t be affected. Our business is in a good position,” right? You can’t outrun a recession, and so we need to be aware of that. And we need to know that yes, it will happen to you. Yes, it will happen to your company. Yes, you will face tough times. These tough times that we face end up creating more opportunity than they do pain. In fact, sometimes that pain that we experience does catalyze positive change, so it can be a good thing.
Now let’s get into it. What should we be doing right now to prepare for the next recession? Number one. Review your pipeline and increase your activity level. Here’s what we know will happen. During a recession, there is a general decline in business activity. So naturally, that’s going to impact our performance, right? We’re going to see a slowdown; we’re going to see some deals dry up. So let’s say you, typically, will keep, I don’t know, let’s say a million dollars worth of opportunity in your pipeline. You know, that could be divvied up amongst, call it 20 or so deals, right? You’ve got 20 deals at roughly $50,000 a piece. There you go, you’ve got a million dollars worth of deals that you’re currently working on.
Right now, you need to fight like crazy to get that deal size up, to get those numbers up. However you do it, whatever it is, increase it by 25% at least, and here’s why. We know that some of those deals will stall out. They may take a little longer to close because of the given level of uncertainty. We know that budgets will change during tough times, so to some extent, I do believe that selling is a numbers game. So right now, if you look at your current pipeline of opportunities, and I’m using a million just as a simple number, increase it by 25%. So, get your pipeline up to 1.25 million. And in doing that, you’re hedging against is the idea that there’s going to be a slowdown. And so, if the slowdown does happen, your pipeline is in a better position.
So, to increase that pipeline, you’re going to need to make more calls. You’re going to need to increase your activity level. Right now is the time to do it. As I mentioned, a recession is likely this year, probably Q3, Q4. Make sure that you are preparing right now for it. Increase your activity.
Number two. Ensure that the opportunities you are pursuing fit the profile for good business. We have to remember that, as we scramble to fill our pipeline, as deals start to dry up, salespeople get desperate. They start taking anything and everything. And they’re willing to lower their standards on what is good business because we think that the next opportunity is not going to be there. We just take anything and everything. That is not the way to approach our business, especially in a tough time. Because during a tough time, your company is also dealing with a decline in activity. The company is dealing with less revenue that can be reinvested into the business. So your resources are going to be a little strained during a tough time. And so, we have fewer resources to serve our customers. We need to make sure that we are investing those resources in opportunities that are a good fit.
So again, this process is pretty simple. Take a look at your best customers and figure out, what do they all have in common. That can help you create a basic profile. Also, we call these profit piranhas in Selling Through Tough Times. Go back and look at those profit piranha customers. These are the customers that tend to complain more. They return goods more often. They chew away your resources, your profitability. It’s high aggravation, low margin business, slow-pay-sometimes-no-pay type business. We all have these customers. These customers tend to be the bottom of the barrel, they’re going to be customers that are not very profitable, yet we continue to do business with them. We need to identify that profile as well. That way you know what to avoid. Okay? So again, ensure your sales targets fit the profile for good business. That’s tip number two.
Tip number three. You’ve got to get your messaging right. Messaging is still one of the greatest challenges facing salespeople. When we say messaging, what we’re talking about is, how you’re able to articulate the value that you bring, and how it impacts the customer. Messaging—it’s the ongoing conversation that we have with our customers and with our prospects.
In Selling Through Tough Times, we have an entire chapter dedicated to customer messaging. In fact, that chapter is available for download complimentary at toughtimer.com, TOUGH.timer.com. So check that out. You can download your complimentary chapter. I mean, in this chapter, we give you several tips on how to craft your message and what’s important. Empathy’s going to be critical in your messaging. Obviously, creating a customer-focused message that’s relevant to what they care about is going to be critical. But there are also three questions you need to answer to help craft what we call the Tough Timer Proposition. So when you are crafting your message, whether it’s to request a meeting, in your presentation, you have to answer these three questions:
- What is the problem that your prospect or customer is currently experiencing? Anytime there’s a problem, there is profit to be had—profit to be made by both you and your prospect. Not only that, but our research from Value Added Selling suggests that identifying a problem is the #1 reason why a decision maker is willing to meet with a salesperson. So being able to identify that problem is going to help open up more doors. So identify that problem.
- Ask yourself, “What potential outcomes will my prospects or customers experience from my solution?” What do you enable them to do? What can they do as a result of experiencing your value? Is it to help them be more competitive in the marketplace? Save time, energy, resources, whatever it may be. Be crystal clear on the outcomes, the impact of your solution. And be able to communicate that in your message.
And then finally…
- Why is there a need right now? We must establish urgency in our messaging because during a tough time, your customers and prospects are more likely to hit the pause They want to wait it out. They want to wait until things get better before they make the investment, before they decide to move forward. We have to establish urgency right now, and in doing that, it’s going to help push them and nudge them forward.
So again, identify that problem, emphasize the outcomes, and establish urgency in your message. Again, we have your go-to guide for crafting your message. At toughtimer.com, you can download this chapter of the book.
Since we have a couple minutes left, I wanted to highlight just one last tip, one last idea. You know, for the past decade, things have been pretty darn good, right? Business is well. Everything seems to be working out okay. You know, besides the pandemic and all that. But generally speaking, economic-wise, we’ve been on a pretty good run. For the past 12 to 13 years, some of those competitors that are just not good competitors, you’re almost like, “Gosh, how are they still in business?” There’s a good chance that during a tough time that they’re no longer going to be around. The tough times we experience will thin the competitive herd. So now is the time to familiarize yourself with their customer base. Because if those competitors that were struggling before face a tough time, they may go out of business. And you need to be there. You can be there for their customer base to support them. You could pick up some low hanging fruit.
So I would take a look at every region that you are operating in, take a look at that region and say, “Okay. Who are the weak competitors in this area? Who’s going to struggle during this next downturn?” I would begin courting their customers. That way, if they do go under, or if their resources start to shrivel up so they don’t have anything left to serve their customers, you can be there. You can swoop in and you can support those customers. I know that may sound a little cold, but that’s what happens in tough times.
That is the episode for today. Again, I mentioned several resources, so make sure you visit toughtimer.com to get all those resources.
Make it a big day.