Large corporations, especially those in the tech industry, are laying off workers and cutting costs. For sales teams selling to customers in a cost-cutting model, this requires new strategies. B2B sellers must realize that a slowdown creates different types of opportunities: Buyers have shorter time horizons, less willingness to take risks with new suppliers, and increased focus on core profitable business units (making harder to sell to experimental or peripheral businesses within larger companies). Sellers need a way to avoid peanut butter and instead focus resources on the most promising opportunities.
Sellers must take a proactive and customized approach
One sales leader told us, “Last year, we had fish in our boats. This year, We gotta go fishing.” Sellers will need a more differentiated and proactive approach. When a seller’s product is stronger relative to the competition, and customers are ready to do well in a slowdown (e.g. banks typically benefit as interest rates climb), the answer is to double down and look for growth opportunities . Sellers can expand their reach and increase market share by actively seeking out new opportunities and customers, while seeking to drive innovation in products and services. We expect Google to expand its customer-facing organization in its focus areas (cloud, search, and YouTube), even as it cuts other businesses and reduces the number of non-customer-facing jobs. With the cloud business booming, the decision to continue investing heavily was obvious. Search is a perfect example of a business that requires a more nuanced approach. Search ad revenue experienced a sharp slowdown in areas such as insurance and loans and mortgages. While reducing ad sales efforts in these areas, we expect Google to increase investments in high-growth areas. Calling back anywhere is bad practice. On the other hand, even if the sellers offer differentiated products, customers who face weak business will always think of getting twice the result with half the effort . Sellers must have proactive conversations with customers to extract more value to help them through this difficult time. By listening to and understanding customer needs, salespeople can redefine products to match the customer’s modified sources of value. They might offer shorter-term contracts, a stripped-down version of the solution, or favorable payment terms. Sellers can help customers look around and predict what might happen in the future. When a seller’s product is in a weak competitive position, whether customers are affected by the slowdown or not, the best approach is to focus on selected relationships, activities, and sources of value. When a buyer-seller relationship is strong, trust is an important source of customer value. Sellers can emphasize their ability to deliver reliably and consistently.
Opportunity for everyone
Like Google, most companies have multiple businesses and divisions, some of which do very well, while Others are not good. For strong businesses, there is an opportunity to take market share from weaker competitors and hire great sales talent while others scale back. For weak businesses, difficult economic times create opportunities to implement difficult decisions, such as selective layoffs and portfolio rationalization. This is also a great time to shed excess fat and manage creep. For example, Google has already canceled its next-generation Pixelbook laptop, cut funding for its internal Area 120 incubator, and shut down Stadia, its digital gaming service. With the cuts in place, retaining top accounts and key salespeople is imperative. Additionally, opportunities vary based on the seller’s relationship with the customer, which can range from a strong on-the-job relationship to no relationship. When uncertainty is high, buyers tend to be risk-averse. If current suppliers are meeting customers’ needs, buyers perceive any change as risky; a new supplier could make a good thing worse. Therefore, the incumbent has advantages. The incumbent also has excellent client access. Especially in service industries, by spending more time with customers, sellers can discover new opportunities. (By the same token, if a current supplier fails, buyers will quickly switch to promising new sellers with significantly lower costs.) Thriving sellers will have one thing in common – a strong digital backbone network, enabling them to tailor customer engagement to each situation. According to the data, a hybrid sales strategy (a strategic mix of digital, virtual and in-person customer contact) is critical to continued success. In search of efficiencies and cost savings in certain areas, sellers can make greater use of digital channels and automate simpler selling tasks. In order to find effectiveness and impact in other areas, face-to-face selling needs to be enhanced. In both cases, the use of analytics can drive smarter resource allocation.