5 Strategies to Drive Sales During a Recession
Whether we’re “technically” in a recession or not, your customers are feeling the crunch from the higher cost of everything and yet another interest rate hike. Purse strings are tightening. Fat is getting trimmed. And CEOs have to have a plan to keep their products and services off their customers’ chopping blocks.
These five strategies will keep your sales from suffering in an up-and-down economy and keep your company on course for a BIG year.
1. Understand Your Customers.
When money is tight, your customers are going to behave in one of four ways.
1. Slam on the brakes. Which of your customers will be hardest hit by a potential recession? How dramatically do you anticipate they will cut back on their normal purchases?
2. Ride it out. Who will be affected, but not devastated? Are they likely to tighten their belts?
3. Stick to business as usual. Who do you anticipate will continue their normal purchasing patterns?
4. Make the most of an opportunity. Which customers might see a chance to lock in value or jump ahead of their own business competition during a downturn? Could their demand actually increase?
Once you understand where your most important customers are coming from, you’ll be able to fine-tune your sales and pricing strategy. Pay particular attention to customers who fall into that fourth group; those extra sales could offset losses you’ll experience from customers who are really struggling. Could you feed that demand and get yourself paid faster by switching to an annual billing model, or instituting a customer loyalty program?
2. Develop a Revenue Bridge.
In our Make BIG Happen System, we often use the Revenue Bridge Tool to help CEOs visualize their growth strategy and stress test the feasibility of their goals. By identifying your historic growth drivers and annual revenue, you’ll be able to anticipate how much additional revenue from new sources you’ll need in order to build that bridge up to your BIG goal for the year ahead. You’ll also have a better understanding of where your sales are coming from and how you can maximize them during a recession.
For example, rather than push your traditionally best-selling products, you might focus on selling products that have a higher profit margin. Maybe you can make those top-sellers more desirable to nervous customers by selling in bulk or bundling them with other products or services. Cut low-selling SKUs and you can refocus your resources on moving the products that will keep building your bridge.
3. Reimagine How and What You Sell.
Sorry, that’s not going to cut it. If what you’re selling isn’t “must-have” when times are good, then you’re disposable when times are tough. And even if you do manage to survive a potential recession, you’re ripe for customer atrophy and disruption.
The solution? Think BIG!
That’s what Caryn Seidman-Becker of CLEAR did during the pandemic. Early in the pandemic, Caryn pivoted away from travel security to Health Pass, a new service that used biometric data as a universal ID so that customers could share verified health information, such as proof of vaccination or negative COVID tests.
In June 2021, as the travel business was still in shambles, CLEAR held an IPO worth $4.5 billion. It may have been “nice” to skip long airport lines before the pandemic. But at a time when businesses and governments were restricting who could go where, being able to share verified healthcare data was a “must.”
Use your Revenue Bridge and your understanding of your customers to anticipate what they “must have” to get through the months ahead. What needs could a recession create that you can meet? What problems can you anticipate? What will be the most effective marketing channels to reach new customers? And what pricing models will keep your sales growing?
4. Adjust Sales Training and Marketing.
High-EQ leadership has a way of permeating every level of an organization, especially during challenging times. The way you model empathy towards employees and customers can go a long way toward helping your sales team adjust their mindsets as well.
Consider devoting a meeting or training session to discussing what’s most important to your customers in a recessionary environment, and how your products and services can help. Talk about ways your sales team can emphasize your company’s value proposition to both existing customers and potential new customers. Explain what products and services you want your sales team to focus on, and how you’re going to incentivize and compensate for those sales. And work with your marketing team to highlight how your brand isn’t selling stuff, it’s offering solutions that folks can count on.
5. Don’t Panic.
Ayrton Senna, the great Brazilian Formula 1 driver, once said, “You cannot overtake 15 cars in sunny weather, but you can when it’s raining.” The pandemic showed us that when nervous CEOs slam on the brakes, they just fall further and further behind companies that have true vision and a commitment to growth. And CEOs who try to cut corners to stay in the black eventually slip off the track and spin their wheels in the dirt.
The best path through the rainy days ahead is forward. Connect with your customers. Inspire your employees. Keep working towards your goals and, recession or not, you’ll keep Making BIG Happen.
About CEO Coaching International
CEO Coaching International works with CEOs and their leadership teams to achieve extraordinary results quarter after quarter, year after year. Known globally for its success in coaching growth-focused entrepreneurs to meaningful exits, CEO Coaching International has coached more than 1,000 CEOs and entrepreneurs in more than 60 countries and 45 industries. The coaches at CEO Coaching International are former CEOs, presidents, or executives who have made BIG happen. The firm’s coaches have led double-digit sales and profit growth in businesses ranging in size from startups to over $10 billion, and many are founders that have led their companies through successful eight, nine, and ten-figure exits. Companies working with CEO Coaching International for two years or more have experienced an average EBITDA CAGR of 67.8% during their time as a client, nearly four times the U.S. average and a revenue CAGR of 25.5%, more than twice the U.S. average.