Selling on a Down Cycle

As we are painfully aware, businesses all have up and down cycles, which make it almost impossible to properly forecast sales and revenue. When we’re on the up cycle, we don’t worry a whole lot. We just ride the wave and pray that it will last forever which, of course, it never does. It’s the down cycle that causes the real grief.

Three types of down cycles

Down cycles come in three sizes: a market adjustment, a recession, and the mother of all down cycles — a depression. While sales and selling continue through all three types of down cycles, we need to modify our approach to accommodate the market realities.

In a depression, all the rules get thrown out and companies go into survival mode. A recession will often see the marginal or poorly managed companies fall by the wayside, while market adjustments only produce a small financial hiccup for well-run businesses.

The recession-based down cycle, whether caused by the cooling off of an overheated economy or by international events, requires sales managers to shift gears in order to keep sales moving.

A down cycle is not the time to pull over to the curb and wait for the traffic to pass. It’s a time to plan, encourage, and motivate your people to take advantage of the situation.

Be careful what you cut

Business fundamentals still apply in a down cycle. In order to survive, you have to bring in more money than you put out. So you either cut costs or you increase sales. Smart companies will work on both these elements. Dumb companies will panic and spend all their efforts cutting costs, often to the point where sales suffer and the downward spiral continues to the death (bankruptcy).

Trimming costs is definitely one of the strategies to be put in place but be careful what you cut or eliminate. Too often the first thing to go in poor times is advertising and marketing. Training seems to be the second thing!

You may want to trim your marketing and advertising efforts but don’t eliminate them altogether. This is an ideal time to get the word out because many of your competitors won’t be and you’ll stand out even more.

Shift your sales efforts

Salespeople are a strange lot. In a down cycle they become galvanized into total inactivity and sit around whining about how difficult times are. Don’t let this happen. Get the team together and develop sales plans that keep them too busy to whine. Shift your sales efforts in two directions.

First, make sure your best customers are serviced extremely well. Don’t let a desperate competitor get his foot in the door of your major sources of income. Offer to partner with key customers and see if you can help them find business. Get your salespeople to become welcomed resources, not just peddlers looking for business.

Second, shift much of your sales efforts to the front end of the selling process — prospecting. Start making inroads into your competitor’s customers. Get creative in finding new sources of potential business. This approach may not get you immediate results but if you don’t plant the seeds for new business now, you’ll have nothing to harvest when the cycle changes direction.

Invest in training

Keep your salespeople in a positive frame of mind. This is where training may help, as there is a high level of motivational content to most training. When I say training, I’m not referring to those one-day rah-rah sessions that I consider the Chinese food of the training business (two hours later you’re hungry for more!). I’m referring to skills development.

Your people may need a half-day workshop on creative prospecting or handling price objections, or they may benefit from a comprehensive workshop to develop well-rounded selling skills. Whatever, training shouldn’t be viewed as an expense; it’s an investment. As my associate Paul Crozier used to say… you’re not buying a computer, you’re investing in a skill.

Bottom Line

Selling in a down cycle is a challenge for both salespeople and their managers. As a sales manager, your challenge is to get the job done through others. It’s not an easy task but that’s why you have the job.