Companies Face Economic Uncertainty
by Dave Kurlan
Reprinted from the December 2000 issue of Smart Selling
After the recent free falls on Wall Street, there is much reason to be concerned as we begin the New Year. Many companies, despite record growth, are looking at lower than expected earnings and with disappointing profits come changes in strategy. Will we see massive lay-offs or emergency cost cutting policies? What about wage freezes? Will there be an end to investments in R&D and capital equipment? Perhaps. But if we look more closely and apply some logic, you can learn how to prevent this from happening at your company.
Why is it, that despite record growth, earnings were so weak? Well, companies were selling products and services with lower margins than ever, the result of companies, so caught up in the once in a lifetime opportunity to sell volume that they resorted to the epitome of laziness, taking orders without regard to profit. Most of your salespeople were hired during the economic boom of the 90’s and as such, have not really been “put to the test”. Few would argue that during the last five years, most salespeople who received an audience with a prospect would generate business because it was there for the taking. But what about now? With the buying frenzy about to end and a possible recession looming, what can we expect from this presenter/order taker breed of salespeople? As economic conditions worsen, not much.
If ever there was an Achilles heel in a company, it’s now and it’s the sales force. As companies begin to spend less, look for lower pricing (as if pricing could go any lower) and make decisions more slowly they will quickly become frustrated with their salespeople’s inability to sell. Salespeople too will become discouraged with their sudden inability to get deals done, oblivious of the fact that they weren’t really selling before but merely capitalizing on being a salesperson of the nineties.
Some companies will wait – until it’s too late – and then start the cost cutting and layoffs that we’ve seen in the past. Smart companies will take action now by evaluating their sales forces to learn who, among their current team, DOES have the potential to sell effectively in the coming downturn. And, as the results of an evaluation will suggest, what kind of development help will they need in order to become more effective? Who lacks the elements necessary for this type of selling and will you have to replace them? Who should you replace them with?
This isn’t time for tightening the belt. It’s time to acknowledging that the easy times have passed, how that’s all about to change, adjustments must be made to your sales force and the way you approach sales, and there is great urgency to make those changes before your competitors do.