By now, we’re sure you’ve heard it on the news — the U.S. is likely headed towards a recession with inflation on the rise and showing no signs of slowing down. In fact, a recent Bloomberg article states the U.S. has a 30% chance of a recession in the next year. This statistic is over double what was predicted just three months ago, suggesting the likelihood of a recession is only increasing. A recession often precedes budget cuts, both within your own organization and in your buyers’. This makes selling during a recession that much more difficult — you’re facing limited resources and a more cautious consumer base. But don’t fret! There are a multitude of ways you can reach your sales quota and goals even during times of economic turmoil.
When buyers are more hesitant, relying on your typical methods of marketing and selling won’t drive more revenue. Buyers will discover new problems and pain points as a result of the recession. This requires rethinking how you market and sell, as well as the tools you use in order to close deals.
Selling during an economic downturn can be difficult, but it’s not impossible. In this article, we’re debunking the top 5 myths about selling during a recession.
Myth #1: You Should Stop Marketing Spend
In times of recession, one of the first things organizations do is reevaluate the budget to cut down on any unnecessary expenses. Every department and every dollar spent is scrutinized to ensure that no money goes to waste. Some organizations take this opportunity to slash marketing budgets, assuming that marketing is a luxury rather than a necessity — but they couldn’t be more wrong.
Businesses that prioritize marketing when selling during a recession perform much better than those that don’t. A study during the 1981-82 recession found that companies who marketed aggressively throughout the recession had 256% higher sales than those who did not. Although the ‘80s recession was 40 years ago, the basic economic principles underlying the study haven’t changed. Investing in marketing keeps sales performance consistent, and helps make recovery that much smoother on the other side.
Marketing spend is essential to sales success. Not only does marketing increase brand awareness and generate interest in your product, but the marketing team is responsible for pulling in best fit leads at the top of the sales funnel. The marketing team also works closely with sales enablement to ensure that sales reps are equipped with the most impactful resources to sell more effectively. Without marketing, sales is losing out on much more than just brand awareness. And if that’s not enough, marketing nets, on average, a 3% savings in future expenses.
Myth #2: People Aren’t Looking to Buy During a Recession
As your own budgets are cut and restructured, it’s safe to assume that the same is happening within your buyers’ organizations — but that doesn’t mean they’re less likely to make a purchase. The recession often creates new pain points for buyers, meaning that when selling during a recession, your sales approach needs to adjust to better address the new problems buyers are facing. Instead of assuming your audience doesn’t want to buy at this time, ask yourself where the recession may have presented an opportunity for your product to solve these pain points.
For example, budget cuts may have resulted in layoffs within a buyer’s organization. With limited staff, administrative tasks may be spread to employees who typically don’t perform them, eating into the time these team members could be spending focusing on their primary job functions. Does your product offer a solution to make repetitive administrative tasks easier, giving buyers back much-needed time? Consider how your product can solve problems in the buyer’s new recession-era normal.
Get valuable insight from our CEO on the 3 Tips for Recession Proofing Your Company.
Myth #3: You Need to Reduce Your Tech Stack
Much like marketing, technology often falls under the category of luxury rather than a necessity when it comes time to start cutting costs. Yet, similar to marketing, technology is a vital aspect of successfully selling during a recession. Organizations are going to have to determine which tools in their tech stack they should keep, and which they can do without.
The right sales enablement tech should save time, making the investment incredibly worthwhile. On average, sales reps spend 66% of their time on activities other than selling (inputting prospect data, logging activities, organizing content, etc.). A large amount of these tasks can either be simplified or automated, giving reps back two-thirds of their day to focus on revenue-generating activities.
For a tech solution to be worth the investment, it should:
- Engage buyers with more interactive meetings and seamless content sharing between interactions
- Create data-driven sales tactics in response to buyer activity
- Streamline reps’ workflow by embedding flawlessly into the process while making content organization and task execution simpler
- Help new reps ramp up quickly and get them selling as soon as possible
- Provide marketing insights to better focus efforts on sales enablement tools that drive buyer engagement
When you invest in the right sales enablement tech, it pays for itself. On average, Enable.us customers win deals 3-5+ times the size of their investment in the tech. The investment creates better sales performance — closing just one deal that may have been lost without Enable.us, pays for itself.
Myth #4: Only Focus on Converting New Customers
When a recession hits, it’s natural to worry about growth and acquiring new customers. However, existing customers can generate a great deal of revenue. In fact, a 5% increase in customer retention can bring in 25-95% more in profits. When loyal customers are generating the most money, selling during a recession should focus on ensuring existing customers have a positive experience.
Already happy, loyal customers are more likely to purchase additional products or increase user licenses. While a rep has a 5-20% chance of selling to a new customer, they have a 60-70% chance of selling to an existing customer. This is partially due to the fact that existing customers already have a positive experience with your brand, and partially because reps simply have more opportunities to up- and cross-sell to existing customers.
For example, perhaps an existing customer is using the lowest level plan of your company’s software solution. With the basic plan, they’re only able to accomplish a minimal amount of work with the technology, so the rep offers a free week-long trial of the upgraded plan. The buyer can then evaluate whether or not to purchase the upgrade, or to remain on the lower level. If the buyer purchases, the rep has won an upsell opportunity!
Myth #5: When Selling During a Recession, You Don’t Need a Customer Reference Program
Customer reference programs are one of the biggest assets sales reps have to demonstrate value to prospects. Getting rid of your customer reference program during a recession does far more harm than good to your sales — 92% of B2B buyers are more likely to make a purchase after reading a trusted review. Customer success stories provide buyers with the third-party opinions and information they’re seeking to reach a purchase decision.
Since customer references are such a key resource in successfully selling during a recession, your tech stack should be able to offer seamless customer reference management. Enable.us allows users to automatically collect targeted customer reference content. Users can build reference libraries, allowing sales reps to easily and quickly share the most relevant customer testimonials with the buyer.
When selling during a recession, it’s important to understand what works and what doesn’t. Readjusting to buyers’ new pain points and implementing the right sales enablement technology helps to maintain (and even improve) sales performance, so that you come out of the recession stronger than ever.
Interested in Enable.us’ digital sales rooms, but unsure if you’re ready to adopt new software during these uncertain times? Download our ROI guide for insight into why a digital sales room is worth it.
Plus! Get your copy of our Sales and Marketing Playbook for Navigating the Impending Recession to discover key tips and strategies to recession-proof your sales and marketing programs.