Surviving and thriving: How to hit sales targets in a recession
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By the end of 2022, most economists agreed that the global economy is heading for a downturn. When markets take such a big hit, they stay down for a while. This leads to missed sales quotas, spending cuts, and diminished profit margins.
Yet, the economy seems to have started 2023 in a better position than expected. While this is great news, the business world is still bracing for the impact, and the concern for a downturn is already having repercussions throughout all sectors.
Many organisations feel the pressure to cut expenses and avoid risky investments at all costs. This results in reduced sales velocity, more client turnover, and a decline in sales volume that undermines long-term growth. But new opportunities will manifest for the businesses that are prepared to seize them.
In this blog post, we will discuss the strategies business leaders can use to hit their sales targets in a recession and keep their organisation growing during tough economic times. Here’s a snapshot:
Learn from the past.
What happens to your business today, happened to someone else’s before.
Get your house in order.
Under stress, organisations expose the flaws that cost them market share.
Adapt quickly.
If you focus solely on surviving, you will not be able to grow. Think ahead.
Switching from offence to defence will set your business back
Consider the past 25 years. In the time it takes to pay a mortgage, the business world has gone through:
- the burst of the .com bubble in 2002,
- the Global financial crisis of 2008-2009,
- the Pandemic-fuelled downturn of 2020-2022.
On each of these occasions, companies had to adjust their strategies to remain competitive in a chaotic market. They have done it in different ways and to radically different outcomes.
Some have cut back on expenses to simply stay afloat. Others have invested in boosting their sales and marketing capabilities and soared.
The global management consulting firm Bain & Company has done some research on this and revealed two constants:
- Companies that downsize marketing and sales take longer to recover than their competitors.
- Companies that learn how to distinguish between risks and opportunities grow steadily.
In periods of economic downturn, companies need to be more careful with their spending. There’s no question about it. If we think about where the deepest cuts go, though, Marketing is often on the chopping block.
Now more than ever, Marketing needs to prove its ROI to secure a budget. This is hard to do with poor lead generation and conversion processes. Three ways to recession-proof these processes are to:
- Re-develop your ideal customer profile. During a recession, potential buyers review their priorities and change their perception of value.
- Measure buying intent. It helps identify and prioritize potential customers who are most likely to convert.
- Sift and score your leads for Sales. Not all leads are equal: pass only the best to Sales and brief them on the details.
For more tips on the marketing challenges that will weigh on your business in the coming months, and how CMOs can help sales hit their sales targets in a recession, dive deeper into the topic here.
If the wheels are falling off, don’t press the gas pedal
Tighter budgets mean less confidence in investing in new solutions. As this happens on a global scale, inbound sales declines. In response, businesses tend to intensify their outbound efforts.
If you only care about volume of calls and emails when your buyers aren’t ready to purchase though, only a disappointing fraction of your sales leads will convert to paying customers.
You cannot brute-force a turbulent market: your emails will end up in a spam folder and the low-quality cold calls churned out by your stressed Sales function will damage your brand.
Defaulting to this approach is the first symptom of a deep inefficiency in your revenue engine: a misalignment between Sales and Marketing. Sales believes Marketing leads are inadequate and a waste of their time; Marketing blames Sales for not helping them prove ROI.
Globally, this problem costs businesses 1 trillion dollars a year. That’s 12 zeros. Yet, a recent study from the University of Northern Illinois has proved that a strong alignment instead:
- Helps achieve sales quotas
- Delivers higher conversion rates
- Increases the accuracy of sales forecasting
- Improves customer retention rates
- Boosts revenue growth and average account size
Rather than pointing all on increasing call volume then, identify the main drivers of the misalignment between sales and marketing and fix it before it’s too late. Our alignment blueprint is a good place to start your own diagnostic.
Observe the market and be prepared to adapt
According to Klipfolio, 70% of B2B companies take a minimum of 4 months to win a new customer. Depending on your solution and market though, your sales cycle can be as long as 12 months.
During this period, your customers’ most important needs can change quickly. When the market braces for a global downturn, their pains will evolve. It is up to you to keep on top of this change to hit your sales targets.
To stay relevant, you must change how you talk about your products or services in line with your prospects’ new challenges. This means refining your ideal customer persona and learning how to answer their questions and find solutions to their problems.
Where do you start?
To be best equipped, understand the emergence of new pains in the market, investigate how they are impacting your target businesses and if they are reconsidering their sales priorities.
This information must be shared with Marketing. If you implement this process, Marketing can craft messaging that really speaks to the brand-new challenges experienced by your prospects and offer them a solution. This will help you attract more interested leads and give Sales a better chance to convert them.
If you focus on boosting your conversion rates, hitting your team’s sales targets in a recession will become much easier.
The companies that shake things up during tough times are the ones that come out on top. In the months ahead there will be many opportunities to steal market share from your competition. But you need to prepare your business to seize them now.
Give us a shout and let us show you how we can help.