It’s not looking good. We have been rocked by dismal and fearful financial and economic events that have rippled through the global economy leaving no company feeling the ill effects. Credit is harder to come by and hibernation is setting in. There are dire predictions that our economy could be faced with a severe recession over the next 12 to 24 months – maybe even 36 months. Causing companies to drastically cut budgets, implement painful layoffs, and to disband growth investment plans. Not a pretty picture.
Typically, in an economic downturn, there is the natural impulse to cut sales and marketing budgets. We see retractions of sales forces, sales territories, marketing programs, and marketing support. Is this really wise? There are three reasons why companies need to invest more into sales and marketing during a downturn while streamlining costly operations:
Solving Customer Challenges
Many companies today will be faced with unexpected and new challenges as a result of the downturn. This is the very time companies need to be engaged in collaborative efforts to solve problems and challenges through creative means. If sales forces retract and these conversations cannot take place then opportunities will be missed. Opportunities that involve solutions to weather the storm together and to help companies become more efficient.
Buyer Behavior and Processes Will Change
Undoubtedly, buying behavior and buying processes will change as a result of the economic downturn. The buying process cycle will become longer and the cast of buyer personas will increase. How? Let’s say for example that your product and services typically cost $100,000. At this level, a Senior Director may currently be the decision maker and it fits into his or her budget. The evaluation, decision, and purchasing process take typically four weeks. Now consider that a company reacts to the downturn by implementing new purchasing guidelines. These new guidelines call for more layers of approvals from Vice Presidents for any expenditure over $25,000. In addition, all purchase orders must be reviewed by a committee and justified with data which must come from the supplier and outside third party sources. The purchase order accompanied by supporting paperwork then must go to the CFO with a no or yes recommendation from the committee. The change in the buying cycle has now gone from 4 weeks to 10 weeks. As you can see, there will be a significantly longer buying cycle, new buyer personas, increased demand for supporting data, and a new set of drivers which have to be met. Without actively engaging with customers and learning about these changes, opportunities will be lost because of the inability to adapt to new buying processes.
Nurturing the Upturn
With the economic downturn cementing into place, lead and client nurturing will become more important than ever. At some point, an upturn will happen. It may be in 6 months, 18 months, or 24 months. However long it lasts, companies will remember who their friends are! Sales and marketing especially have to work in a concerted effort to provide the right level of messaging and communications that engages the lead and the client in an ongoing dialogue. Sales must make investments in long term relationships by truly being the trusted advisor during difficult times and offering periodic advice without the precondition of a sale. Meaning also those organizations will have to revaluate current compensation plans and adapt to the economic downturn not only to allow for nurturing but to ensure they keep in their brightest and best people in place for the long term. If nurturing takes place effectively at the lead and client level, both the supplier company and the client company will be poised to act when the upturn takes hold.
Organizations today who act impulsively and go into hibernation mode with their sales and marketing functions may be doing themselves irrevocable long term harm. Allowing competitors to gain entry and a strong footprint into their customer’s businesses. They will also present themselves with a real risk that exceptional talent will leave and mediocrity will become part of their company DNA. What are four actionable steps that organizations can take today to invest in heir sales and marketing during a downturn?
Customer Insight
The downturn will have a cataclysmic effect on buying behaviors and processes as aforementioned. Organizations will need to gain insight into these changes and identify how hey must adapt. This is exactly the time to actively engage in customer insight research that allows for buyer persona profiling, buying process scenario building, and getting at the core insights driving buying behaviors and decision-making. The outcome will be a more targeted and effective identification of how to connect with buyers and how to navigate the changes in buying processes.
Training Correlated to Customer Insight
Once insight into buyer personas and buying processes has been achieved, organizations should invest in training and education of their sales and marketing forces on how to understand buyers, meet their goals, and help facilitate the buying process. It is important to make a distinction here between sales training and education correlated to customer insight. Sales training will always be a prudent means of improving sales effectiveness but it will be less fruitful in an economic downturn unless it is tied to understanding of real-time shifts in buying behaviors and buying processes. It is critical that sales and marketing have education on these important insights and how they must adapt. This type of education will not only maximize return on conventional sales training but will also produce the type of effectiveness that reduces wasted dollars in chasing improperly vetted opportunities. In addition, continued and refreshing education will help to keep the talent pool stocked with dedicated winners.
Customer Messaging
Marketing efficiency is determined by its ability to connect with customers and buyers with resonance. Based upon buyer persona profiling and gathered customer insight, Marketing will need to adjust customer and sales-ready messaging that connects with buyers on a level that appeal to their drives and goals. Web strategy will need to be evaluated so that customer interaction points are aligned with the buyer’s needs during the buying cycle process. Armed with insight, Marketing will need to align messaging and supporting data with that of the buyer’s process. In the hypothetical example provided previously, marketing will need to insert an interaction point whereby it makes it easier for buyers and buying committees to pull down third-party supporting data such as analyst reports. In an economic downturn, it becomes doubly important for Marketing to support Sales with sales-ready messaging that is on target, purposeful, and useable. Primarily for the reason that in a downturn, you have fewer chances to get your message across to potential buyers and clients. There is little room for error in getting your message right.
Sales and Marketing Alignment
An organization can gain significant efficiency in sales and marketing strategies if they are aligned. Again, with fewer opportunities to get a story in front of potential and existing customers, discord or discrepancies will be magnified if sales and marketing are out of synch. Having a deep understanding of the buying process, sales and marketing can be aligned around providing the buyer with the critical messaging and information needed at the right moment. Potential and existing customers are fairly astute at knowing when a “fire drill” is on in order to meet a specific request during an interaction point. Too many of these “fire drills” will seed doubt into the minds of buyers about the company’s ability to serve them after the sale is made. In effect, introducing “buyer’s remorse” early into the process and causing the buyer to perhaps flee.
The organization that can focus on these four areas during the economic downturn will find itself in a stronger position when an upturn is starting to take hold. In tough times, companies are afforded the opportunity to sharpen their sales and marketing prowess, tighten their focus on customers and messaging, and gain efficiencies in alignment.
An economic downturn is without question tough for both suppliers and buyers. Measures must be taken to streamline and reduce expenses. All too often though, sales and marketing can be seen as the easy target for the amplification of dropping numbers is most felt in these areas. Good and smart organization fight the impulse to scale back their sales and marketing dramatically under the false pretense that customer(s) are not buying at the moment. Understanding the reasons why this is the precise moment you must invest in sales and marketing and what actionable tactical efforts can be made will prevent companies from making this fatal mistake. And buyers, at those moments of upturn, will remember who their friends were during those rough days.
