Had the pleasure recently of hearing Neil Rackham share his thoughts on how to sell in a recession. A summary follows (the thoughts are his, the errors if any are mine). The deadliest selling mistakes, when times are hard:
- chasing too many opportunities,
- negotiating rather than selling, and
- selling price rather than safety.
Rackham notes that only 1/3 of B2B Reps have ever sold in a recession. This creates the risk that most will make these same deadly mistakes that were made last time, and they won’t even know when it’s happening.
Whenever it takes many calls to conclude a sale, and the economy tanks, sales leaders may ask their Reps to work harder. Reps then build bigger funnels and half-sell to twice as many prospects. This is a proven recipe for big effort with small rewards. An example which Rackham cited: a capital goods company in which Reps were making an average of 1.4 calls per day. The VP Sales pushed for more effort and got:
- a 36% increase in calls/day
- a 16% increase in orders
- a 1.5% decline in sales (as the average deal size declined)
- resignations from 4 of his top 10 salespeople
- subsequently fired
Instead, in these circumstances, Rackham advocates:
- working smarter, not harder (serve the right few)
- creating value (rather than communicating it)
- making calls so valuable that prospects would pay for them
- focussing on safety (it will matter more than price)
