Ready or not, here it comes.
Whether it appears justified or logical unfortunately doesn't matter. Things have tightened up quickly.
Is it actually a downturn? Could this spark the start of a recession? Could it be even worse? On the other hand, could it be over this week? Either way, guess what every executive is thinking right now?
"How long is this going to last?"
"How bad is it going to get?"
Guess who knows the answer? Nobody. We can all prognosticate - but nobody knows.
Uncertainty is a crazy-machine in the brain. The challenge of the unknown throws everyone into a subconscious maintenance and survival mode.
And speaking of unknown, it's been 12+ years since the last downturn. What percentage of your customers were in their current roles back then? How about even their current companies? What percentage were even in the workforce? Probably not a single one fits all three categories. So, even if we all had certainty around the environment, there's inherent uncertainty from lack of experience.
To start, think about this: What do you do when things get unpredictable personally?
- Picture the worst-case scenario and begin to prepare for that. Survival comes first. You don't want to be the last person to get prepared.
- Seek ways to extend your runway - whether it's cash, supplies or anything else. Run over to your local store and see how many surgical masks and bottles of hand sanitizer you can find. Remember that word "uncertainty" above.
- Focus all available resources (time, dollars) on only the essentials until certainty develops. Any elective, nice-to-have, discretionary spending stops. Right? My wife wants a new couch - but she knows it can wait.
Now think about the companies you are selling to. The uncertainty train has arrived, and I'll bet the discretionary spending train is already leaving the station. There is nothing like uncertainty and looming crisis to immediately snap EVERYONE into focus.
Given how you adjust when the going gets rough, let's think about it from a corporate perspective.
- Priority #1: How do we maintain revenue? This may sound surprising, but executives have already come to the conclusion that their quarterly growth target will be missed. Yes. It's already happened. Even Sequoia Capital is sounding the alarm to their founders. Every sales executive I've talked to this past week has told me that March is going to be trouble. In other words, executives all have a newly minted excuse to miss their short-term revenue goals. Seriously. It’s subconscious - but the execs are already getting their speeches ready for their next board meeting, and who’s going to argue with a missed number right now?
- Priority #2: How do we ensure we have the runway to get through for the foreseeable future? How much cash do we have? If our customers stop buying and stop paying, how long do we have? What other ways can we reduce short-term costs and non-essentials to extend that runway? The smaller the company you're selling to, the higher this priority.
- Priority #3: How do we reduce or maintain our risk levels? In other words, with every decision, what can get us through the storm without making it harder to ride the eventual rebound? While longer-term projects will go on hold, shorter-term decisions regarding priorities 1 & 2 will be seen through a longer term lens.
So, what does this mean for you?
Step 1: Evaluate your value proposition and messaging: What bucket does your solution fall into? Are you currently seen as a discretionary project? Something nice-to-have? Is it a project with a longer-term ROI? Does it simply solve an ankle-biter problem?
During the last downturn, I was the VP of Worldwide Sales of a tech company that solved a training issue for large manufacturers (i.e., airplanes, aerospace & defense, oil & gas, automotive, etc.).
"We are able to take CAD design and repurpose it for use in creating 3D, interactive work instructions." Wow - that sounds cool...but who friggin' cares about modern training content development during a potential crisis?
Step 2: Escalate that messaging. Dig deep. Now.
Thinking about our training solution above - we managed to quickly pivot the messaging & discussion.
Mrs. Prospect, we've talked about your challenges with creating effective training materials. Why does that training issue matter? Oh, you need to enable shop-floor workers to do more assemblies than just one-or-two? Why? Oh, due to resource costs, you believe that one assembler can do 4-or-5 assemblies instead of just one-or-two like today, but there's a training effectiveness issue? Having one person do 4-or-5, all more efficiently than they could previously do on just one-or-two would keep labor costs down and get more product out the door faster? So, solving the training issue means lower labor costs and faster time-to-revenue in an area where all eyes are on this product launch? Got it.
That single conversation took us from being a $3M cash-burning short-runway startup to a $7M cash rich company almost overnight. What was previously seen as a 5-figure solution became a 7-figure solution in the eyes of our buyers. Our buyers could be heroes! Escalating our messaging to address short-term cost reduction, faster time-to-market for essential projects, all with a longer-term focus led us to 400% year-over-year growth in the heart of the downturn.
And, in January of 2009, I was on-stage at Caesar's Palace in Las Vegas accepting the Golden Stevie American Business Award for Worldwide VP of Sales of the Year for how we pivoted during the downturn.
My strong advice for you: Get on tightening and escalating your messaging - like right now. Get ahead of everyone else:
- Your solution must be positioned (and able) to help with short-term costs and business runway extension: The priority of an organization's spending will go towards existing projects and short-term issues. Your messaging must hit home here. Whatever problem you solve or solution you provide must have empathy for buyer uncertainty in today's environment.
- The path to cost reduction and short-term reward has got to be easy; to justify, to buy and to implement: Transparency wins here - if you can't immediately build credibility and trust, and not force the buyer to do more homework, you'll move up to the bottom. Easy evaluation. Easy purchase. Easy implementation. Immediate reward.
- Your solution has got to maintain risk levels and not risk current revenue levels: Companies will not risk customer satisfaction or long-term revenue by making short-term mistakes - so your messaging must convey a short-term win with a long-term benefit.
This is a whole new selling environment - that has splashed upon the scene in quite literally the past few days. Hopefully it's a false alarm, and will be over quickly. If it's real, it won't be easy. Hopefully cooler heads will prevail, but while uncertainty looms, the best you can do is to immediately elevate your conversations. Elevate your purpose in times of uncertainty. Empathize with your buyers.
And to make matters worse, the week starts by losing an hour and ends with a Friday the 13th, but we'll all get through this... 😃
Oh, and be vigilant - wash your hands, quarantine yourself if you're sick, use common sense.
On Friday, March 13th at 1pm CT, join me along with Sales Assembly and sponsors Gong, Outreach, Sendoso and Path Factory for a webinar talking about the science behind buyer anxiety, and how to prepare for a downturn. SIGN UP HERE - IT'S FREE