Economic downturns are part of the business cycle. Stay prepared with our tips to navigate a recession successfully and help your B2B startup thrive.
In the next few months, we may or may not be entering an economic downturn. Recessions are a normal part of the business cycle so it’s always good to be ready to adjust your sales strategy in case circumstances change.
Furthermore, recessions deepen the gap between companies. Some businesses continue to prospect or even strengthen their position on the market, while others struggle to survive.
To navigate a recession successfully, a company needs to adjust to changing environments and “business as usual” is no longer enough. Here are 7 tips to help your business flourish, even in uncertain times:
There is no doubt that it becomes harder to sell during an economic downturn. Improving your marketing and sales strategy and your pitch can boost your pipeline and closing rate.
However, the first thing you must do is focus on your team.
As the economy changes, customers' needs also change. You may find yourself exploring new markets and adjusting your product. Your team must be aware of these changes otherwise they may get confused, pass on outdated information to prospects and clients, or lose faith in the company’s strategy altogether. A refreshed positioning statement can support you here.
Whether via an updated positioning statement, or by some other means, it's critical everyone in your company is on the same page. It's better to over- than under-communicate. Make sure everyone understands the new circumstances and are onboard with the new high-level company positioning.
During a recession, consumers become more price sensitive and re-evaluate their priorities.
Your products may, in their eyes, switch from essential to expendable.
Because of this, market research is even more important than before. You can track how consumers' needs are changing and feed that information into your product and marketing strategies.
Start refreshing your marketing strategy by answering these questions:
Then, sketch out a strategy on how to achieve marketing KPIs. The below-mentioned questions (and your positioning statement) can help you with this:
Next, create a plan with clear actions and a timeline, test new strategies one by one and measure their impact, and then adjust according to obtained results.
Now that you've refreshed the marketing strategy and positioning statement, it's time to focus on your sales strategy. In B2B SaaS, sales is generally about creating pipeline and closing deals.
You will likely generate most of your pipeline via outbound efforts by your business development team. It may be that in a downturn, formerly successful strategies no longer produce results. So be ready to analyze and adapt as the environment changes.
During a recession, people are generally more concerned about their safety and stability. It’s worth keeping this in mind when refining your pitch, and emphasizing how your solution will improve the stability and security of your prospect's business.
When contacting potential customers, place quality over quantity. If your outbound efforts are not meeting expectations, go back to basics. Perhaps you need to talk to more potential and actual customers to better understand their shifting needs? Or perhaps you should resegment your customers so that you can draft more successful messaging?
Make sure you incorporate your learnings into a BDR playbook that captures best practices for your team. There isn't much point in discovering improvements to the outbound strategy, if you have no systematic way of communicating those insights to the wider team.
Do you know your key metrics? It’s now time to set targets!
Targets need to be moving the organization toward its long-term goal. They can create a connection between the organization's goals, the team, and each team member’s work.
Especially during more demanding times, I recommend setting team targets, instead of only individual targets. Having team targets ensures that the whole team is working towards a shared goal. This kind of transparency also encourages trust within the team and helps build camraderie.
During times of economic uncertainty, one of the most important things is to have a transparent, target based pay structure for your sales and BDR teams.
Incentive-based compensation will help you to manage and motivate your sales force, and that’s why it needs to be carefully structured. Incentive plans that worked in the past will become outdated as your selling strategy adjusts to the changing environment. Update your plans so that you’re incentivizing behaviors that will help you achieve your current KPIs– not the ones you had in the past.
Commission plans need to support you in achieving your KPIs, but at the same time, they need to be easily understood by team members. It’s all about finding the right balance– there is no use in a technically great incentive plan if salespeople don’t understand how it works.
To enhance cross-team collaboration, consider splitting the incentives so that everyone involved in the sales process is rewarded.
When deciding on the commission plans’ logic, communicate it to your sales reps, get their feedback, and if necessary adjust the plans. It’s important to get your sales force on board, because otherwise, they may feel that you are trying to avoid paying them what they deserve.
Your team needs to have a clear understanding of how to maximize their commission.
I recommend making your commission process transparent so that reps can inspect and understand the calculations behind their commission; this will preempt many disputes. Team members should be able to check their commission before the payout is finalized and leave comments when something looks off. Don't squander your team's trust, try to have a reliable review process for your commission calculations.
When it comes to increasing motivation, real-time feedback is the key. Have one source of truth for commission calculations that is trusted by sales teams, management, and finance teams. Sales reps should be able to see how a recently closed deal impacts their payout. It also helps to present this information on a dashboard, so it is more accessible.
Real-time feedback helps motivate reps to "go the extra mile" and close more deals.
In times of recession, you may have to minimize costs.
Keep your team informed of what is going on and why, otherwise rumors and distrust can develop.
Start with cutting non-essential business expenses, but try to protect incentives as you don’t want to lose your top performers. You need them now more than ever and they will be vital in recovering from a recession faster than your competitors.
A recession may seem like a daunting time, it is a time of change and may even involve a shift in business priorities. However, the decisions you make during this period will strengthen your business for the future and is a great opportunity to build trust and collaboration within your teams.
Looking for a way to organize your incentives? Software like EqualTo can help you organize and take control of your commission process, taking away the risk of errors at this uncertain time.
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