Your customers might be spending less, but that doesn’t mean they’ve stopped spending altogether. Make sure you’re top of their list.
When the economy tightens, business owners often go into survival mode. Belts get tightened and products get discounted. The fear of sales dropping and clients disappearing can be crippling.
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“Tough economies don’t mean people stop spending. They still need to eat. They still need pet food, holidays, office supplies, computers, health products and machinery. You just need to make sure they’re spending their money with you.”
Greg Tinkler, The Cre8tive Group
Rather take a different view. When people and companies spend less, it’s a strategic opportunity to ensure that their spend is with you.
Here are four ways to position yourself for better sales in the future:
1. Qualify your sales leads
A ‘spray and pray’ approach is never successful, and yet this is the sales and marketing strategy of so many businesses. Instead, qualify your leads and put your time and energy into customers who need your solutions.
“Like many businesses, we hadn’t done adequate client research,” says Shameem Kumandan, founder of Washtub Industrial Laundry Service. “This meant we weren’t profiling our clients and finding businesses that suited our specific offering. We also couldn’t adjust our offering to precise client needs. We would just drive down Sea Point, make a list of hotels, and market to all of them.”
The result was actually damaging to the Washtub business and brand. Shameem and her team were wasting a lot of time and effort on unqualified leads. “We could have been targeting the right customers. Instead, in many cases we contracted clients whose needs and expectations were a mismatch to our offering.”
Unbeknown to Shameem, she was scrambling in ‘red’ waters; the metaphorically blood churned waters of a feeding frenzy of multiple businesses fighting for the same clients.
“Our shift came when I contracted the services of an experienced marketing director. She taught us the value of preselected leads and customer profiling. We made a list of the top ten customers we wanted, studied their needs, created a customer-centric solution for them, and then pitched our business.”
Through this new sales methodology, Shameem and her team signed the Westin Cape Town Hotel, one of their pre-selected clients and a major win for the business.
2. Don’t lose focus by chasing clients you wouldn’t normally want
Some businesses are already focused and pre-qualify their leads. For these businesses, founder of The Cre8tive Group, Greg Tinkler has a different warning: Don’t lose focus now. “When people get nervous about the economy, they do cut back on their spending. Use this as an opportunity to become more strategic in your sales approach, not as a reason to pursue the wrong types of customers.
“There’s a reason you don’t pursue them when times are good, and that reason probably hasn’t changed. Do your best to stick to your niche and enhance the value you provide to your current customers. They may decide to make their cutbacks in areas other than yours.”
Keep this in mind: If you try to broaden your core product or service appeal to please a wider audience, you run the risk of alienating your best customers, giving them one more reason to stay home or spend less.
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3. Don’t discount
While there is a place for discounts in business, particularly on large orders and to encourage repeat business, be careful. When you start discounting too frequently, not only are you undervaluing your product or service, but you’re training your customers to only buy when you’re offering discounts.
“During the last recession in the USA, both McDonald’s and Burger King put their Big Macs and Whoppers on sale so often that they trained their customers never to pay full price,” says Tinkler. “That created a margin problem that ultimately took them years to recover from.
“If you need to make your products more affordable, do so carefully and deliberately. But lower the price instead of offering a discount.”
Gill Bowen, co-owner of Shooshoos, a local manufacturer of children’s leather shoes, has taken this approach to pricing.
“We don’t want to start discounting our products. Instead, we’ve made the strategic decision to offer a second, more cost-conscious range of shoes, with a tag ‘By Shooshoos’, so that our customers know they are receiving the same quality, but with simpler styles. We’ve worked carefully with our customers to understand current buying needs and what price points the market can tolerate, and we’re applying those learnings to our strategy going forward. What we do not want to become is a discount brand. That will only hurt us in the long run.”
4. Add value
As a business owner, your company needs to change the conversation from one of price, to one of value. What value are you offering your clients? If you can’t answer this question, you either haven’t done enough research to understand your clients and their needs, or you haven’t adequately communicated the value your business brings to its clients.
This isn’t a features and benefits conversation. It’s an in-depth analysis of what your client’s business will look like with your offering, and in the absence of your offering. What does doing business withyoumean tothem? If you can’t answer this question, it’s time to go back to the drawing board.
Anthony Iannarino, an international sales leader and best-selling author ofThe Only Sales Guide You’ll Ever Need, says that if a buyer doesn’t value the difference in results that are created by paying more to obtain them, then the seller hasn’t done their job. The real value being offered hasn’t been adequately unpacked or positioned.
BEFORE YOU OFFER YOUR NEXT DISCOUNT, TRY THIS INSTEAD:
- Have you adequately considered the value your business brings to your clients?
- Are you able to articulate that value?
- If the answer is no to either of these questions, either reconsider your pipeline or spend time on the two points above.