How sellers can close deals in an economic downturn
During an economic downturn, sales organizations need to improve their sales process, sales skills and seller engagement to continue closing deals.
How sellers can close deals in an economic downturn
When deals slow down and buyers start to hesitate, a good seller knows it’s time to take action - and the signs are there. Though we’re just at the start of an economic downturn, quota attainment and win rates are down by 10% already. The average deal size has dropped by 13% and almost half (46%) of organizations are practicing more price discounting.
What does this data tell us? Buyers no longer have a fear of missing out (FOMO). Instead, they’re plagued by the fear of messing up (FOMU), a term coined by Matt Dixon.
As a result, buyers are taking longer to make purchasing decisions. While considering their options, they’ve invited more stakeholders to the table to ensure that closing the deal is the right call. This means sellers must convince more people to move forward and invest their dollars. That is, if buyers are willing to make any investments at all.
In this tough environment, how can sales organizations adjust to the uncertainty and prepare for the future? How can they keep their sellers motivated despite a downturn? And how can they overcome buyer hesitation so they can convert prospects into deals?
Our experts have answered these questions and more in a recent webinar. Here’s a preview of some of the topics they’ll cover that will show your sales organizations how to close a sale in a challenging market.
Three quarters (75%) of buyers say that their organization has experienced either significant or some changes to their buying process in the past year. Today, buyers are more hesitant to take action. Even when they do move forward, they settle on a seller later in the buying cycle after doing more research themselves. Our studies show that sellers are consistently near the bottom of resources that buyers consult when making a purchase.
And, when purchases are being considered, more stakeholders are contributing to the conversation, so sellers have more work to do to overcome FOMU and convince a buyer to pursue a deal.
As the downturn intensifies, sellers need to strengthen their skills to give buyers the confidence to close the deal. And those skills need to be reinforced through sales coaching and encouraged through proper incentives.
All these changes mean that sellers need improved and different sales skills. This doesn’t mean sales organizations should establish a holistic training campaign. Rather, sales organizations need to consult their data to determine the best way to optimize their salesforce. To do that, they need to study their numbers — and we don’t mean their sales results.
Best-in-class sales organizations assess their top performers to understand what skills, competencies and behaviors propel them to success. They then seek to replicate those winning attributes across the salesforce through training. During COVID, 52% more best-in-class respondents agreed that knowing what “good” looks like was imperative for sales growth.
To respond to the changing buying environment, sales organizations will need to equip sellers with three new skill sets:
Our research shows that best-in-class sales organizations rely on a sales methodology that focuses on sharing perspective — the insights that help buyers better understand their situation.
Perhaps even more important than teaching new sales skills is reinforcing skills through a robust coaching program. Time and again, the data shows that adopting a dynamic approach to sales coaching — with defined processes aligned with the organization’s sales enablement framework — has a staggering impact on sales success:
In part, this is because dynamic sales coaching reinforces sales methodology (+47% adoption) and sales process (+36%).
Unfortunately, sales managers historically spend twice as much time on administrative work and sales forecasting as they do on coaching their teams. And many sales organizations define sales coaching as a funnel review or a discussion of opportunities. To be most effective, sales coaching needs to encompass more than funnels and leads to include accounts, territory skills and behaviors.
Now is the time to double down on coaching by developing sales managers’ coaching skills. Organizations that spend more than $2,500 on sales training per sales manager have 10% higher quota attainment and 15% higher win rates than organizations that spend less.
Compensation is a concern for both sellers and sales leaders with shrinking budgets and diminished financial outlooks. The key here is not to be rash if you’re considering layoffs or cutting base pay. Remember that you’ll need your front-line sellers to recover, so you don’t want to alienate them.
The best approach to incentivizing sellers is to collect data so you can make informed compensation decisions. Your goal should be to keep your incentive program simple, straightforward and transparent. Look at a variety of metrics and consider which levers to pull to come up with the ideal mix between pay and incentives. And, given market uncertainty, it may make sense to tie rewards to margin rather than top-line revenue.
When considering appropriate incentives, remember that you have meaningful options other than cash. Sellers may appreciate recognition of their achievements. The key is to ensure your people feel valued, not just paid.
There’s a lot of process around sales, and it matters. A good sales process adopted by 75% or more of an organization’s sales force boosts win rates by 30%, quota attainment by 19% and revenue attainment by 8%, according to our 5th Annual Sales Enablement Study. The problem is, less than half of sales organizations say they have a good process. Getting back to sales fundamentals can create a foundation for a stronger process moving forward.
Sellers should plan every interaction with buyers, from prospecting through deal closing. According to our 2020-2021 Sales Performance Study, sellers only spend 16% of their time prospecting and preparing for calls.
Also, sellers need to establish relationships with the economic buying influence, who gives the final approval to proceed with a sale. To reach them, sellers should focus on the ROI of a potential investment and its impact on the organization. Sellers must also identify the coach: an ally who shares the resources and information that enable you to close a deal.
Finally, sellers must use a formal method to qualify opportunities, such as a scorecard, to assess the following six categories:
Here are two additional elements of winning sales processes that best-in-class sellers follow.
Every organization’s sales process should anticipate and be ready to discuss and address buyers’ fears. Then, sellers must work with buyers to de-risk the buying decision. That means sellers have to go beyond selling features and functionality of their offering and refocus on making the business case and return on investment for their buyers. Therefore, sellers must bundle their offering with services necessary to build a holistic solution that gives buyers the confidence to invest.
Learning how to ensure buyers are open to discussing a potential opportunity is also important for sellers. One tool that sellers can use to overcome FOMU is perspective. When sellers lead with perspective, they give buyers new ideas that help shape their vision for success. And perspective positions sellers as experts who add value in every interaction, whether by serving as a source of best practices or as a problem solver.
In this environment, sellers can deliver valuable perspective by identifying problems that buyers have yet to recognize, offering solutions that buyers haven’t anticipated, pinpointing opportunities that buyers haven’t noticed or introducing others who can support a buyer’s business.
In ordinary times, the number of prospects that turn into deals hovers around 50%. That number is even lower today.
So, when sellers are trying to decide which opportunities to pursue and which activities are likely to yield the best results, having access to accurate data is critical. If your sellers have kept your CRM and other sales tools up-to-date, you’ll be able to harvest real-time data plus insights into customer intent that will show your sellers where to invest time to get buyers to commit. If not, there’s no time like the present to start encouraging sellers to spend time with your tech stack.
Going forward, your sales technology can serve as an enabler for your sales organization. Investing in tools that connect sales methodology to sales opportunities transforms former data repositories into real-time training tools that can prompt a seller to take the right actions to close the deal.
Our sales experts explore why and how sales organizations can move deals forward in an uncertain economic climate. The first webinar in our Seize the Sale series, Taking action to defeat the downturn, covers:
Watch on-demand now for insights into sales closing techniques and more, including how your organization can adjust to economic uncertainty, keep the sales pipeline moving and keep your sellers engaged and motivated.