Three Critical Mistakes Companies Make During a Recession and How to Avoid Them

Recession brings to mind one thought – fear. As a result, many organizations do three things that devastate their financial viability. Again and again I see these same mistakes exacerbate the problem rather than helping the organization. Smart companies, however, remain confident and realistic in their pursuit to survive (and even thrive) during a recession. They avoid these mistakes.

During a recession, many organizations will fail because they make these three mistakes:

1. Cut their Sales Development Budget – Hiring and developing successful salespeople is paramount to staying afloat in a recession. Too many senior executives cut these budgets so they can “keep the doors open”. Well, if the salespeople aren’t selling, then no budget cut will save the organization. You sell your way through a recession. Smart companies take this opportunity to train or re-train their salespeople, focus on identifying high probability sales opportunities and streamline their sales processes. In addition, they take advantage of the rich unemployment field to hire good salespeople who are looking for a more stable company. What’s more stable than a company who remains calm and focused during tough economic conditions? Professional sales training and a proven sales assessment for hiring are invaluable at this time. Leave the panicking to your competitors and invest in your salespeople. They are the ones who will keep your doors open.
   
   
2. Cut their Prices – Why would you cut prices… because everyone else is? Margin rules. Cutting prices attracts the wrong kinds of buyers. It also adds additional stress to your operations, administration and technical folks with less and less return. Smart organizations maintain their price points, retain margin and actually gain market share during economic downturns. How? Their competitors go out of business because they’ve dropped their prices, shaving off so much margin that they can’t stay solvent. Costs consume all of their minuscule margins due to price chopping executives. Instead, condition your salespeople to hold the line on price. (Investing in sales training and hiring good salespeople will help you do this!)
   
   
3. Cut their Marketing Budget – How are your salespeople supposed to sell their way out of a recession if they lack marketing support? Instead, work with sales and marketing people to retool your message. Promote your differential value and use testimonials to paint a picture of success. Technology affords you a cost effective means to remain close to your customers and keep in touch with prospects. This way your salespeople will be contacted first when the time is right for customers to buy.

You have a choice to make. Will you give in to conventional price slashing methods and cut your sales and marketing budgets? Or will your confidently invest in your sales and marketing team to sell your way through troubled times? I recommend taking the smart approach and avoiding these three common mistakes that failing companies make during a recession.

About the Author

Barrett Riddleberger is an internationally recognized leader in the practice of sales assessment, sales training, sales recruitment and retention. His new book, “Blueprint of a Sales Champion,” details how organizations can find, train and retain top performing salespeople even in a highly competitive market. An accomplished lecturer, Riddleberger is also highly in demand as a business development and motivational speaker for organizations seeking to inspire their sales force. For more info go to www.ResolutionSystemsInc.com or www.BlueprintOfASalesChampion.com or call 336.665.0506