How a Down Economy Alters Customer buying Philosophy

Get Inside Your Customers’ Heads

Understanding your customer is always key, but it is never more important than when you are selling in a down economy. Improve your sales territory planning by getting hip to changes in customer philosophy that accompany recession-time business.

During a recession, salespeople need to recognize the changes that occur in customer philosophy. When the economy gets tough, customers need different kinds of products than they do during a booming economy. They start to look more critically at products that they intend to buy and they will no longer do business without knowing how the product will either cut their costs or increase their revenue in the short term. While this can become a difficult situation for sellers who intend to continue making zero-effort sales, for sellers who are willing to get inside of their customer’s heads this can be a great opportunity to increase sales on products which directly target their customers’ concerns. Here’s how to get inside your customers’ heads:

Ask the Customer More Questions!

This sounds easy, and it is!You should already have a standard protocol of questions that you ask every customer in order to understand that customer’s very specific needs and concerns. Add to this list of questions a few that deal with how perceived changes in the economy may be effecting their company. For example: “How are the current changes in the economy effecting your buying practices?” On the one hand, you might be surprised to hear that their sector has been hardly effected at all by the recession. If this is so, you might need to change little about your current strategy. However, you NEED to ASK for this information. You can assume nothing.

In the more likely case that the company you are dealing with has changed many of their practices, you need to be proactive in your approach. Ask your customer directly what changes they have implemented in their buying procedure as a result of the recession.

  • For the most part, you will find that customers now want to focus on buying products which will either cut their costs significantly or provide very short term revenue increases.
  • Many companies will require more lengthy buying procedures which require approval from people higher up in the company. (Sometimes you can save yourself a lot of time if you can manage to talk to superiors directly).
  • A lot of companies will also want their buyers to get multiple quotes for any purchases they make.

You need to ask your customer about all of these contingencies at the beginning of the sale so that you know what you are getting yourself into. This will save a lot of time and help you to create a sales plan that targets the customer’s needs directly. The better you are able to understand your customer’s needs, the better you will be able to sell to them. If you still feel shaky about this process, then educate yourself. There are plenty of great books and websites available where you can get additional information on this topic. For a quick and easy introduction check out SalesRoundup.com. You’ll find dozens of podcasts on complex selling and links to other resources.

Sell Products that Cut Costs and Boost Short Term Revenue

As a sales manager or a salesperson conducting a complex sale during a recession you need to show your customers how your products will

  1. help them to avoid risk and
  2. help them to increase their revenues.

The order of these two factors is important. Since the overall feeling in the economy today is gloomy, companies will want to create solutions that they know will increase their profits in the short term. The quickest way to do this is by cutting costs. For this reason many companies will make cutting costs their primary concern. You want to market products to your customers that will help them reduce costs first and help them to increase revenue second. During a recession, the customer will want to see how the product can increase revenue sooner, not later. They generally won’t want to speculate about three years from now but will want to see how their revenue will increase within 18 months or even within 12 months. Find out from your customer if this is the case, and market products to them accordingly.

The bottom line is that the solution that you offer needs to save the customer money, and you need to be a pro at explaining to them how it will do this.

This post was inspired by the SalesRoundup Podcast episode titled; “Selling in a Down Economy Understanding Your Customer”

Good Selling
Mike & Joe
SalesRoundup Podcast

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16 comments for “How a Down Economy Alters Customer buying Philosophy

  1. January 17, 2009 at 7:37 pm

    Good stuff Joe!

    In regards to the economy, I have taken an “only if you mention it” approach with my prospects. As I ask questions and work my way “into their head”, I listen very closely to understand their current situation. If they mention or make reference to the “down economy”, then I explain how our company is currently providing solutions to help during tough times. On the other hand… if the prospect doesn’t say anything about the economy… I don’t bring it up either.

    http://www.SalesBlogcast.com

  2. JP
    January 21, 2009 at 6:32 am

    Hi guys: thanks for the good work. I want to ask you an opinion about when calling to the top officer on a company is too high. I’ve been calling big accounts and while I’ve been able to contact the CEO (I speak about 30000 people companies) and got visits, when we met there always was the specialist or tech guy at the side and ALL the value and savings my offer has gets in hand of this ashw…and the lead is stuck forever. The CEO is way receptive to save 500k.a year but the CIO don’t care, for example.

    Sounds familiar? How to get around this?

  3. Tim
    January 21, 2009 at 1:29 pm

    Since I am with a small community Bank and the industry is getting tagged I have taken a different approach. We are acknowledging the economy is bad and have started a Breakfast at the Bank Breakfast in two of our locations to get companies together monthly so that they can network and get some business. We have had 3 or 4 companies already get together to do business. As we keep doing it it is increasing our name recognition and people understand that it is about them not us. Very little or no marketing being done.

    Love the podcasts and I am starting to get my team to listen as well.

  4. January 22, 2009 at 9:04 pm

    Hey Tim

    That is a great idea! By providing the business community free resources (the bank meeting room) you will be the recipient of potential future business…. This is great PR and it doesn’t cost a lot!!

  5. January 22, 2009 at 9:13 pm

    JP

    Following up on your question When calling on a top officer is too high? I don’t think you are ever too high. The only thing i would recommend is be prepared! You must first understand the C level’s business needs. In you example the CFO responded positively to saving $500K, but the CIO was disinterested. Perhaps the CIO has different needs (MBOs) and you haven’t aligned you solution with his / her needs… You certainly did with the CFO!!!

  6. Jonathan Wiener
    February 26, 2009 at 11:41 am

    With all due respect to the efforts of others, I believe this was one of the best and most “high leverage” articles I have read in a long time. I have never known a more highly valued or compelling company offering than profitability. Nor have I known an offering more highly sought out in a down economy. With this in mind, I strongly believe that the organizations who do the best job of aligning their solutions, processes, intellectual properties and experiences with bottom line impact will be best positioned to deliver consistently high sales results. Keep up the good work guys.

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