Selling and Marketing in a Downturn

There’s good news, though. A downturn can be a time for marketers to shine, to improve cross-functional collaboration, and to build or strengthen their status as an advisor to the business. The key is to avoid some common mistakes and, even better, seize often-overlooked opportunities.  

Do not panic or over-flex

Organizations frequently react to downturns by adding— rushing to pile on new strategies, initiatives, tasks. Teams end up overloaded with the new and lose sight of what was already working or not working. Resist the impulse to over-flex, and instead, calmly consider how to best use your resources:

• With your team, explore how you can be 20 percent better, rather than trying to be 80 percent different and better.  
• Let go of anything that isn’t effective and recommit to campaigns and initiatives that get results. Set a manageable pace and streamline the workflow. Avoid throwing too much at your team, which only leads to confusion, frustration, and misalignment when you can afford it least.
• Deepen your understanding of the customer. Recessions hit every customer and every company differently. Customers might suddenly behave differently (e.g., from innovation interest to cost focus). Recognizing how each client is affected builds trust over the long term. Also, remember that many industries thrive during a downturn (think tech or pharmaceuticals and healthcare in 2020). Identify clients that are still doing well and intensify your marketing efforts to them.  
• Increase alignment with other business units and the C-suite. Collaborate to link marketing’s efforts with the those of sales, enablement, product development, etc., coordinating with their business cycles and using data points to drive decisions and messaging.    

Get back to the fundamentals

• Continue branding efforts.  
• Reinforce your brand identity. Begin by reengaging employees in company culture, mindset, and brand, an identity they know and are proud to represent. In a downturn, organizations sometimes soften their messaging. That’s a mistake. This is a time to energize your organization around reinforcing your brand identity to customers and potential customers. It’s time to get louder.
• Shift your messaging but protect your authenticity. Marketers must revisit their messaging and make changes that resonate with their target customer, whose own circumstances have changed. The danger: overreacting and being inauthentic to their brand, latching on to the latest buzzwords or mimicking what other companies are doing. The creates confusion and lowers customer engagement. Be authentic and build your customers’ confidence in your brand as something they can trust, even in times of uncertainty.
• Watch your language. When a downturn forces budget cuts, every cost comes under greater scrutiny. Improve the language you use to demonstrate how your product or service is not an expense, but an investment, an investment your customers can’t afford to not make. Draw attention to the value they’re getting, not the transaction.  
• Embrace sustainability as a brand advantage. In a recent survey, 91 percent of US CEOs said they were convinced a recession was on its way; 59 percent of those executives said they were preparing for a downturn by pausing or reconsidering environmental, social, and governance (ESG) initiatives [i].  Research reveals this short-sighted tactic will likely backfire:“A review of company performance during the last recession also suggests that investments in sustainability can pay off during difficult times: between 2006 and 2010, the top 100 sustainable global companies experienced significantly higher mean sales growth, return on assets, profit before taxation, and cash flows from operations compared to control companies” [ii].

In a recession, marketers need to promote the importance of a strong sustainability strategy internally—and confidently tout that strategy externally.  

• Revisit customer segmentation and the customer buying cycle.
• Identify those customers for whom what your organization provides is critical even in a downturn, or especially in a downturn. Increase your marketing efforts to those segments.
• Reexamine your customer’s buying cycle to understand what changes are happening during a downturn. This will allow you to make sure your marketing aligns with sales, enablement, and customer service—in sync with the buying process and focused on achieving results for the customer.
• Revamp your multi-channel and omni-channel marketing strategy. Even in the best of times, multi-channel marketing isn’t about playing in every channel. It’s about aligning to customers’ preferences. This becomes even more crucial in a sluggish economy. Prioritize the channels that either continue to bring in potential customers despite the downturn or that are best suited to reach those customer segments you’ve decided to direct your efforts toward during the downturn.

Focus on the long term

In a downturn, organizations understandably default to survival mode, anxious that today’s slowdown could be tomorrow’s crisis. However, research from the Great Recession confirms that companies thrive during a downturn when they don’t over-rotate on short-term tactics.

“There is also evidence of the benefits to maintaining a focus on the long term, even during a period of crisis: companies with a long-term orientation achieved higher annual growth and total shareholder return (TSR) than their counterparts during the previous recession” [iii].

For marketing leaders, this is the time to keep your eyes—and strategy—focused on the future. Use the downturn as a trigger to implement long-term initiatives and changes that will result in more data-driven, evidence-based, and efficient marketing.

While thriving during a recession is never easy, it doesn’t have to be complicated. By simply avoiding the temptation to over-flex and fixate on the short term and going back to the fundamentals, marketing can make a downturn their time to shine.  

Sources

[i] KPMG 2022 U.S. CEO Outlook. Aug. 19, 2022. https://home.kpmg/xx/en/home/insights/2022/08/kpmg-2022-ceo-outlook.html[ii], [iii] “Five Ways a Sustainability Strategy Provides Clarity During a Crisis,” by Thomas Singer. Harvard.edu, July 6, 2020.

Only 20 percent of salespeople are prepared to offer real value during a sales call. In a tough market, this won’t cut it. Sellers who prepare for sales calls with general industry knowledge are not able to demonstrate the unique value required to sell in today’s increasingly challenging environment.

To successfully close deals, sellers need to be customer-centric and develop a deep understanding of their customer’s business objectives and success metrics, aligned to the organization’s specific context. This approach builds sellers’ credibility, conversational agility, and their ability to adjust their talking points to address clients’ different motivations, which are critical when spending isn’t really on the table.

Customer centricity also allows sellers to engage with clients throughout all parts of the sales cycle, which enables them to find unexpected opportunities. A seller who can shift gears mid-conversation by listening for cues will be able to address business priorities that genuinely land with the client—and get them invited back for further meetings. When sellers can see things from the customer’s perspective, they become trusted advisors.

By leveraging a customer-centric mindset to position themselves and their organization as a true partner for success, sellers will demonstrate value and win business, even in a tough economy. To build your teams’ customer centricity, sales leaders should facilitate the following steps:

1. Gather deep industry knowledge

It’s not enough to have company-specific history and context in your back pocket; industry expertise and context is critical to build rapport and trust. Going beyond “show me you know me” and demonstrating exactly how a product or service provides value to your customer and represents an investment is crucial in today’s market.

Sellers also need to gather in-depth information about the people seated across the table—prospects and customers specifically. To prepare, sellers should comb through social channels, read 10-Ks, and keep up with industry press, and ask: What challenges are keeping your prospects up at night? What innovations do they have in progress? Who are their competitors? Are there any recent shifts in customers they’re targeting? The context allows the seller to speak directly to prospects’ pain points and develop custom, thoughtful solutions.

2. Develop the skills to secure a meeting

For salespeople, of all the skills to master, getting introductions tops the list. In fact, 70 percent of customers value “connected processes,” otherwise known as contextualized engagements. Think of this as a seamless hand-off between a person in the seller’s network and a decision maker at a company.

Introductions go beyond the introduction itself. They also require sellers to share a strong point of view and ask the right questions so that customers will open up about their businesses. It’s all about being relevant and bringing value to the conversation.

3. Understand customers’ metrics

Many salespeople enter the room with some understanding of their customer’s business challenges. Not as many come in with knowledge around the financials, initiatives, and KPIs used to measure success. Knowing how a client will measure success allows a seller to speak to those points specifically.

The seller must focus on the customer by providing insight, following up regularly, and even helping to strategize next steps. The goal is to ensure that customers see the value of the company’s products or services and seek to adopt them. Success will encourage additional purchases, and over time, generate steady revenue streams.

4. Pair the offer with the value proposition

Without a clear understanding of how the company’s products or services deliver value for clients and how to present this in a compelling way, sellers will consistently fail to close deals. Understanding and delivering the value proposition is so mission critical that it should be built into every organization’s training and enablement.

One way to prepare sellers is through simulations, which immerse customer-facing teams in their customer’s challenges. Being on the inside of their customers’ business allows sellers to become more intuitive and thoughtful about developing solutions. Furthermore, they get to practice having challenging conversations, whether with their manager or a professional coach, in a safe environment that helps them to develop confidence.

Developing a customer-centric mindset is ever more critical for sellers who need to close deals in a challenging economic environment. Knowledge, conversational agility, and consultative skills enable sellers to become strategic client partners, win new business, expand critical accounts, and foster successful long-term relationships with important stakeholders in the market.

The hardest sell is not the one you have to make, it’s the one your buyer has to make internally against other priorities andinitiatives.

As a seller, you can feel it coming. When recession looms, a company’s first impulse is to dramatically cut spending. But you can work the downturn to your advantage—helping buyers position your solution not as just another cost competing for space in a tightened budget, but as the key to thriving in hard times.

These four steps will enable you to make it easier for yourbuyers to buy.

1. Improve your understanding of the situation‍

Take a macroeconomic view of how a downturn is affecting your customer’s business. Examine the trends moving against the company’s ability to purchase, in particular the implications of how these trends impact the budget areas where you sell today. Customers who were previously looking for 20 percent year-over-year growth are likely now aiming for something more conservative, or even hoping just to remain flat. Maintaining revenues and market position are more important than ever in a recession.

Even during market downturns, however, customers still have problems that need to be solved. Consider the decision levers influencing purchasing amid these macroeconomic trends by identifying high-level trends that customers need to focus on in a downturn. These will fall into at least some, and maybe all, of the following categories: technology, people, strategy, key initiatives, competitive landscape, and business performance. Examining the internal communication of your own company and any changes in how decisions are made mayalso give insight into what your customers are experiencing.

2.  Improve your understanding of the situation

Even your strongest business relationships can now look much different due to economic pressures. Most customers will be facing increased scrutiny on any purchasing decision, with new stakeholders involved in the buying process who require higher levels of justification. A longer sales cycle has wide effects on your ability to manage your pipeline and territory and forecast your year. In a downturn, sales fundamentals are more important than ever, so you need to take these three actions:

Evaluate your customers. Looking at your book of business, who are your most critical stakeholders? Taking the time to evaluate which relationships are essential to sustain and beginning to formulate a game plan will keep you focused.

Discover and align to changing goals. Particularly for your most essential customers, you will need to be intentional about understanding how the looming recession is affecting their business and their decision-making processes. Often a short-term strategy is put in place to maintain financial health throughout the downturn. As a good partner, you need to be able to align with the new success targets and be proactive in the process.

Uncover the new competition. A downturn can bring a source of competition you haven’t faced before: other initiatives inside of your customer’s company competing for the same budget dollars. With waning confidence in growth, C-suite leaders have little choice but to tightly monitor costs throughout the organization. Inevitably, this ratchets up the internal competition for funding as finance departments try to decide which initiatives are mission-critical and which could wait for better conditions.

Getting back to basics and spending the time to deeply understand how the external pressures are creating new internal processes for your customers can help you better position yourself throughout the downturn.

3. Position yourself

Now that you fully understand the new strategy of your key accounts and any potential internal competition, you are ready to position yourself. While you may be tempted to look at shorter contracts or discounting, any amount of discounting can have long-term effects on your relationships and signal desperation. More than ever, it is critical that you create a value proposition for your customers. In addition, you must present a creative value proposition that is broad enough to appeal to the new stakeholders at the table. You may find yourself with C-suite executives involved in conversations that previously required lower-level sign off. Being able to confidently present your offering and think on your feet will be essential. Be sure to understand what value your offering brings to different areas of your customer’s organization and know what levers you have at your disposal to help a deal move along. Remember that just as your customers want to avoid any short-term missteps for their business, you must protect your business as well. Look for creative ways everyone can win.

4. Identify new opportunities

Finally, you need to be more proactive and agile during this time. While maintaining major accounts and relationships is important, finding new areas of business may be even more important. You might have built a book of business around an industry that is widely affected by the downturn. Networking with your team and staying current on market conditions can you help you find marketplace shifts and lead you to new opportunities. Communicating with your sales and marketing leadership on what you see and hear in the field may help everyone uncover new applications, industries, and customers for your products.

There’s no denying that selling in a downturn presents a new set of challenges. But by leveraging empathy and insights into the internal and external forces impacting customers, you canpartner with your buyers to make a winning business case—even in a downturn.