Practical tips for customer acquisition during a recession

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Running a business in a recession requires persistence, perseverance and determination coupled with IQ/EQ and real-time problem-solving skills.

As boards of directors want to coach their CEOs and executive leadership teams, I share a few practical/executable ideas along with a philosophy and approach to consider:

In times of great uncertainty, it is very important that CEOs and leadership teams are personally present in front of employees.

I believe it is valuable that the CEO spends a lot of time sharing the vision for the future with employees in different regions and regions.

Layoffs/financial cutbacks and restructuring are part of the tools many companies will use. Employees need the reassurance that they are part of the forward-thinking team.

Employees need to hear the vision and know what to expect in the future as the CEO shares the plan and more importantly on the soft side of EQ, drives the company around the company’s mission and creates cultural connectivity.

In these difficult times, employees look for positive points of reassurance.

Recognize your employees who are performing well in these difficult times. Employees want to know that they are valued, valued and that as they tighten their belts and lean in to do the really hard work of getting through this difficult cycle. Find ways to celebrate and recognize both small and big successes. Perhaps a new product feature is released or a metric is reached. Think about how you can celebrate the team’s achievements more regularly and recognize your best performers.

On the practical side, creating morale and esprit de corps is key.

Regular all-hands meetings and face-to-face encounters in the field have a lot of impact. Think about how you interacted with your team in the early days of Covid.

You may also want to consider whether there are inspiring outside motivational speakers who can be part of a rotation of all meetings.

At Wynn Resorts
WYNN
the company created deeply emotional and powerful internal videos that celebrated the Wynn culture.

These videos were very effective and they showcased the wide range of different people and different roles and functions in the organization, capturing the authentic and sincere feelings of the individuals and creating an esprit de corps that enhances what is special about your culture. Perhaps there are similar video artifacts you can create.

Employee engagement is key to getting through this difficult cycle. Look at delegating some authority to managers and look at giving them a budget so they can give small recognition rewards to their team members. Little things can range from hats, gift cards, etc., but delegating authority to the manager and giving them a budget is very effective.

Not everyone on the team has the skills, background and resilience to handle both the growth cycle and the current recession cycle.

You may have to make the tough choices about who won’t make it through the recession cycle.

You need the team members who are motivated and motivated for the long term to get through this difficult time.

You may want to ask management to review the employees through the lens of who the right people are for this cycle and make the hard decision about who won’t come early.

Another important thing to ask your CEO and leadership team is to identify the top performers who really “move the needle”. This would be a time to lock them up with differentiated equity and long-term incentives.

Those who are your top “lifeboat choices” should be rewarded and retained in a differentiated manner.

Customer Acquisition:

When looking at business functional groups in a recession cycle, one of the lessons often cited from other recessions is the importance of customer acquisition and retention.

I think it’s worth going really deep into some of the actual very small tactical things that have identified top sales leaders like Steve Benson:

It’s valuable to look at how you would plan for your CRO’s challenges
KRO
and sales team will face in this bad economy, here are some examples from the software industry:

1. Facing a crisis, great leaders face reality. In times of major change, you need to be action-oriented and understand the challenges you believe your business will face. Draw up a plan. Have a positive outlook, involve the team and be transparent about the future action plan. Identify your most successful reps and discover their custom playbook they’re using. They figured out how to crack the code. Make that rep the hero and teach that behavior throughout the organization.

2. Sales leadership must be very close to each deal and ensure it reaches key decision makers. Sales leadership will often have to step in to help close the big deals.

3. Sellers need coaching in the down economy. There are new skills you need to help the team acquire. Assess whether your sales leader spends at least 50% of his time coaching the teams and having face-to-face conversations.

4. Looking maniacally at lead generation and qualified leads in all three sections of the funnel are key. (Understand if your deals are getting stuck in the middle of the funnel or at the end).

5. Buyers will negotiate tougher conditions. Deals can get stuck and not close. It is important to qualify if the buyer is actually authorized to proceed or if there is a company-wide freeze. Deep focus on the sales activity and forecasted KPIs so you can be sure that deals are really progressing to close.

6. Decide if you need to change your commission plan. Do you want to compensate on turnover in this time of coercion, or do you want to compensate on margin? Historically, software industry representatives have been paid based on revenue. Would you consider paying them on profit/margin?

7. Look at upskilling your sales organization in negotiation and training the sales organization to sell the benefits of the solution. Plan ahead to defend your margins.

8. Your competitors may become desperate and offer significantly deeper discounts. Some companies will be so pressured that they can liquidate their stock. Expect pressure to give away free advice or steal other valuable products/services from your customers.

In an ideal world, you would hope for one very deep round of layoffs instead of multiple cuts. Given that this recession is new and unfamiliar to many businesses, you may be going through the pain of more than one cut. The board should consider whether it is prudent to encourage management to do the difficult planning of aiming for one big cut and trying to avoid making many small cuts.

I hope reading this list has spurred you on your own tactical lessons and experiences. Think about applying this tactical lens to other functional areas and distilling the most specific tactical decisions that can be made to move the company from the cycle of peacetime growth at all costs to wartime profitability.

There is much wisdom that your friends, colleagues and board members who have experienced cycles can share.

At your next board meeting, consider making time for a discussion about what lessons each board member can contribute after experiencing several cycles of recession. You energize your board by asking them to participate. You’ll be surprised by the liveliness of the discussion as everyone works together to help iterate on what experiences and lessons are most appropriate for your business.

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