Recession Selling Strategies

Music Gerhard Gschwandtner: Hi, my name is Gerhard Gschwandtner and welcome to Selling Power TV. Today we have the pleasure of meeting with Neil Rackham, the author of Spin Selling. Welcome Neil. Neil Rackham: Thank you. Gerhard Gschwandtner: The stock market is down, the housing market is down, the automotive market is down. The economy is really in tough shape. Neil Rackham: Yes. Gerhard Gschwandtner: What's your strategy that you recommend to sales leaders on how to sell themselves out of a recession? Neil Rackham: Well, the first thing is to understand what not to do. Here are some of the mistakes that sales leaders made in the last recession. Firstly, they thought it was about price and so they did everything they could to get quickly to minimal pricing. It didn't help them. It just cut their margins. What we know is that selling in a recession is about risk. Customers will often buy much more expensive solutions in a recession if they perceive them as less risky. So, the role of the sales force is to make comfortable customers. Customers who don't feel there's a risk involved... Gerhard Gschwandtner: It's a safe bet. Neil Rackham: It's a safe bet, but the problem is it is safe, but sales people telegraph out to the customer nervousness. Gerhard Gschwandtner: Yeah. Neil Rackham: Because the sales person is getting anxious. Gerhard Gschwandtner: Yeah. Neil Rackham: About how am I going to make the sale, am I going to make my quota. I'm under threat. They pressure and pressure is very negative in a recession. They do all the wrong things. So, they have to understand my job is to minimize risk and the company has to help them do that. That's the first thing. The second thing, when people are selling in a recession, they tend to feel that activity is good. Gerhard Gschwandtner: They want to run faster. Neil Rackham: Yeah. Gerhard Gschwandtner: They want to see more people. Neil Rackham: Yeah. They'd much rather half-sell to twice as many people. Gerhard Gschwandtner: So, I that -- twice as many people and only do half the sales job? Neil Rackham: That's right. Gerhard Gschwandtner: Okay. Neil Rackham: That's exactly what happens. Whereas, if you look at successful companies who actually prosper in a recession, what they do is they focus. They choose fewer opportunities, they put more resources to them and they outsell their competitors and they win because in selling, there's no price for coming in second. It is not as though you could be like an Olympic Silver Medalist and make a good career out of coming second. Gerhard Gschwandtner: Right, right. Neil Rackham: There's nothing when you come in second. Gerhard Gschwandtner: Right. Neil Rackham: And the cost of pursuing a sales opportunity has become very high nowadays. So, we can only afford to pursue the ones we are going to win. Gerhard Gschwandtner: Okay. Neil Rackham: That means fewer opportunities. Gerhard Gschwandtner: Now, let me give you a realistic example. Let's pretend you're the sales leader. You have 300 sales people and you look into that forecast and you see that your next quarter is going to be down by 30%, what's your three-step recommended course of action? Neil Rackham: The first thing I would do is I will get my people together and I would say we are really down, let's focus on the ones we can win. Whereas, most sales leaders say, we're really down, let's open up a lot more opportunities. Gerhard Gschwandtner: Right. Neil Rackham: That just dilutes. Gerhard Gschwandtner: Right. Neil Rackham: The second thing I would do is I would understand this in bad times where there is risk involved, I have to, as the sales leader become very involved in key sales. I can't just let my people do it. I have to strategically intervene to try to elevate the level of things, because I am a better representative of the company. Gerhard Gschwandtner: Right. Neil Rackham: And the customer needs to know that the company is a safe bet. And I therefore represent safety, so I become involved in the key sales. The third thing that you do is you have to ensure that your sales people don't believe that they're under terrible threat, it will cause them in turn to pressure the customer... Gerhard Gschwandtner: Right. Neil Rackham: And to telegraph nervousness. So, you have to be very self-assured doing all this. Gerhard Gschwandtner: So, you need to reassure them they are going to keep their jobs. Neil Rackham: Yes. Gerhard Gschwandtner: The dream hasn't died. There's plenty of opportunity if we pursue it right. Neil Rackham: That's right, yes. Yes, you have to be confident and you have to be focused. Gerhard Gschwandtner: Yeah and you need to transform fear into action. Neil Rackham: You said it. Gerhard Gschwandtner: Thank you so much. Neil Rackham: Thanks, Gerhard. Gerhard Gschwandtner: Neil, it is a pleasure.

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