Business Growth In A Slow Market
It’s funny, Nature has trained us to accept the changing of its seasons, and you don’t hear too many people exclaiming, as Nature contracts, “Oh no! What’s gone wrong? Another Winter!” And yet, while every market, including yours, is a broader part of Nature and so breathes in and out with a rhythm resembling the seasons, you’ll still hear plenty of people exclaiming, at the next contraction, “Oh no! What’s gone wrong? Another Recession!”
Surprise, surprise! Did they expect that unlike anything else in their experience, markets in general would just continue to breathe in – and expand forever? Come on! If it did that, the logical result is pretty obvious, isn’t it?
So the market, like the seasons, has contracted and if we are smart we’ll adjust our behaviour to harmonize with it – or wear the consequences.
So, what changes do you think are called for right now?
Change is Hard
From the outset it’s smart to accept that changing behaviour is hard for most people, and even harder for most groups of people – and most businesses are a “group of people”.
So just how hard is Change?
On a scale ranging from one (easy) to 100 (impossible) I see a strong case that Change is an 89 in difficulty.
Why?
Because for every 100 people diagnosed with heart disease and scheduled for bypass surgery, only 11 will make the changes to their diet, exercise and weight loss recommended to extend their chances of survival. The other 89, while clearly appreciating their need to change to avoid a significantly increased risk of death, fail to do so – because Change is hard!
So, before we get into the “What change do we need to make to meet our changing market?” a better question might be, “What will I have to do so that I and those I work with can change?”
I’m going to save the answer to that one – the $64,000 question if you like – to the end, and begin with what changes are indicated.
What Changes Are Needed?
Space dictates I take a narrow approach here, so I’m going to address the question of, “What changes to selling processes would be wise in a softening market?”.
1.Don’t do kneejerk cuts. Don’t cut sales budgets or staff without first analysing the likely effect of doing so. A 10% cut in sales staff or resources projected to result in an 8% drop in sales might sound tolerable, but if the bottom line effect of 8% less sales is 12% less profit, it’s illogical to cut.
2.Think counter-intuitively. If your opposition is cutting staff, then market coverage, contact frequency and standards of services must generally suffer. That may also mean that some good sales people who were previously inaccessible to you are now on the market, enabling you to top-grade your own team and to step up coverage, contact frequency and service levels to clients who are still out there needing to buy. Don’t underestimate the power of the positive message you generate into your marketplace with this move, and be aware that a nervous market will gravitate towards strength and certainty in uncertain times.
3.Look for Savings, Then Spend. If the market is softening, and you have managed your cashflow in the past so as to provide a capital reserve, you are going to get more bang for your buck on any purchases in a soft market as people compete keenly for your business. This could be an excellent time to embark on a project that could cost a lot more in a stronger market. The “strength message” applies again.
4.Be flexible. You could just cut 10% of your sales staff. Or, you could ask all of your sales team to take a 10% cut so that you can keep them all. The actual financial cost to them will be less than 10% due to the effect of marginal tax, and the effect on morale and esprit de corps is likely to be huge. If things tighten further, consider asking your sales team to take one day in ten off (say, every second Friday) – that saves another 10%, is likely to add positively to their work/life balance and keeps the team together so that you are at full strength if the market surges momentarily, or recovers fully.
