Selling into a Recession
It’s hard. It’s really hard. But it’s not impossible. Data shows that companies that continue to invest in sales and marketing during a recession outperform their peers by 2x. It’s not easy, but it’s possible. Here’s how.
What is a Recession?
A recession is a period of economic decline. It’s defined as two consecutive quarters of negative GDP growth. GDP is the total value of goods and services produced in a country. It’s a measure of economic activity. When GDP is growing, the economy is growing. When GDP is shrinking, the economy is shrinking. When GDP is shrinking for two consecutive quarters, the economy is in a recession.
What Causes a Recession?
Recessions are caused by a variety of factors. The most common cause is a decline in consumer spending. When consumers stop spending money, businesses stop making money. When businesses stop making money, they lay off workers. When workers are laid off, they stop spending money. This creates a vicious cycle of declining economic activity.
How Long Do Recessions Last?
Recessions typically last 6-18 months. The longest recession in US history was the Great Depression, which lasted 43 months. The shortest recession in US history was the Great Recession, which lasted 18 months.
How Do Recessions Affect Sales Cycle Length?
Recessions typically cause sales cycles to lengthen. This is because companies are more cautious with their spending during a recession. They want to make sure they’re getting the best deal possible. This means they’re more likely to shop around and compare prices. This means they’re more likely to take longer to make a decision. This means they’re more likely to take longer to close a deal. This means they’re more likely to take longer to pay you, which is not good for your cash flow. You need cash flow to pay your bills and grow your business. If you don’t have cash flow, you can’t pay your bills and grow your business. This is why it’s important to keep your sales cycle as short as possible.
How Do Recessions Affect Sales Cycle Win Rates?
No decision. It’s a tough pill to swallow, but it’s true. When companies are struggling to survive, they’re less likely to make a decision. They’re more likely to sit on the fence and wait for things to get better. This means they’re less likely to buy from you. This means you’re less likely to close a deal. This means you’re less likely to get paid. This means you’re less likely to survive. Seeing a trend yet? It’s a vicious cycle. If you want to survive a recession, you need to keep your sales cycle as short as possible, and focus on the deals that are most likely to close. This means cutting your losers and focusing on your winners. This means focusing on the deals that are most likely to close. This means focusing on the deals that are most likely to pay you. This means focusing on the deals that are most likely to help you survive.
What do those deals look like?
Pain. The deals where the customer is in pain. The deals where the customer is desperate for a solution. The deals where any solution is better than no solution, because right now, the customer has no solution. You can help them. You can solve their problem. You can make their life better. You can make their business better. You can make their employees happier. You can make their customers happier. You can make their investors happier. You can make their shareholders happier. You can make their board happier. You can make their CEO happier. You can make their CFO happier. You can make their CMO happier. You can make their CTO happier. You get the point. But it needs to start with pain.
How do I qualify for pain?
Qualifying for pain is an essential step in selling into a recession. It involves identifying and understanding the specific challenges, problems, or needs that potential customers are facing. Here are some strategies to help you qualify for pain:
Research the market: Gain a deep understanding of the industry and market conditions. Identify the common challenges and pain points that companies in your target market are likely to experience during a recession. This research will provide you with valuable insights to tailor your sales approach.
Ask probing questions: When engaging with potential customers, ask open-ended questions that encourage them to share their current business challenges. Ask about their goals, priorities, and areas where they are struggling. This will help you uncover pain points and understand how your product or service can address their needs.
Listen actively: Actively listen to your potential customers and pay attention to the details. Take note of their concerns, frustrations, and the impact of those challenges on their business. By demonstrating that you understand their pain points, you build trust and establish yourself as a partner who can provide solutions.
Offer insights and solutions: Once you have identified the pain points, provide valuable insights and demonstrate how your product or service can alleviate those challenges. Tailor your pitch to highlight the specific benefits and outcomes your customers can expect. Show them how your solution can help them cut costs, increase efficiency, or overcome obstacles during the recession.
Focus on value: In a recession, companies are often more cost-conscious and seek solutions that deliver tangible value. Highlight the return on investment (ROI) and cost savings your offering can provide. Clearly articulate the benefits and show how your solution can help customers achieve their goals and mitigate risks in challenging times.
Build relationships: Building strong relationships with potential customers is crucial during a recession. Take the time to understand their unique needs and maintain ongoing communication. Position yourself as a trusted advisor who is invested in their success. This approach not only helps you close deals in the short term but also sets the foundation for long-term partnerships.
Adapt and iterate: As market conditions change during a recession, it’s important to stay agile and adapt your sales strategy. Continuously evaluate your approach, learn from your successes and failures, and refine your sales techniques. Flexibility and responsiveness will be key to navigating the challenges of selling into a recession.
Remember, qualifying for pain is not just about identifying problems but also about offering meaningful solutions. By understanding the specific pain points your customers are experiencing and effectively communicating how your product or service can address those pain points, you increase your chances of success in selling during a recession. It’s not easy, but it’s possible. Good luck!