Layoffs, budget cuts, and hiring freezes, oh my. Unfortunately, it seems as if the writing’s on the wall for many businesses and it’s time to get scrappy and adapt quickly. In the face of economic hardship, the world of B2B selling is likely to see more competition and less willingness to spend money than ever before.
Ultimately, this means that companies prepared to operate in a recession-proof manner will have a huge advantage over those that are unprepared.
Today we’re giving you five steps to take now to create a recession-proof sales organization in the future. Let’s get into it.
Step 1: Evaluate your sales tech stack.
Even in the best of times, it’s best practice to keep tabs on the ROI you’re seeing from each and every sales solution you invest in. In reality though, most businesses, ranging from startups to established enterprise organizations, inevitably develop bad habits around technology spending.
For this reason, even if you think you have a good understanding of your sales tech stack, we recommend intentionally auditing your toolkit. Here’s what you should look at:
- Usage: How often is your team using each tool and what percentage of your team actively logs in? Identify which tools have the lowest adoption rates and figure out why.
- ROI: What kind of return on investment does each tool have? What is it giving your team– productivity? time? money? Do your best to understand and quantify what the exact value of each purchase is in comparison to what you spend on it.
- Duplicates: Do you have multiple tools that do the same thing or have some kind of overlap? Determine if you need everything you’re paying for and if there is any opportunity to consolidate.
The key to keeping a cost efficient technology stack is investing only in sales solutions that bring true value to your sales team. Unless it’s saving your team time or bringing in money, consider getting rid of it.
Step 2: Prioritize seller experience.
In today’s market, with constant talk of The Great Resignation, it’s time to double down on providing a better seller experience for your reps. What we mean by this is that you should be doing everything in your power to retain and nurture top sales talent. We know that sales is a candidate-driven profession and a highly-sought role– especially now. That means, if given a reason to leave, your reps will certainly do so.
It’s important to establish loyalty and do right by your team now, because you won’t be able to afford the costs associated with sales turnover down the line. Here are a few things we recommend doing to ensure your sales reps are happy and engaged at work:
- Over-communicate: Communication is a huge factor when it comes to employee experience. Especially in sales. The best way to prevent accidental lapses in communication is to consistently over-communicate. It’s better that your team tells you it’s too much, than realizing it wasn’t enough after it’s too late.
- Invest in transparency: Spend time and money on tools and systems that increase transparency on your sales team. We know it can be scary to spend more money in the face of an economic downturn, but making the right investments can actually help to future-proof your organization in the long run. Think about what your team wants and needs access to and make it easy for them to do so.
- Ask questions: As a sales leader, you should be checking in with your team and individual reps regularly– not only to give them information but also to ask questions and act as a resource. Asking questions can help you keep your finger on the pulse of your sales team and prevent any major issues before they arise. No one can tell you about your sales team better than, well… your sales team.
- Act with empathy: The economy isn’t the only thing suffering right now. Your team is likely feeling stretched thin and stressed out from multiple angles in life. The added pressure of hitting quota and being successful at work during a recession doesn’t help. Understand that your reps may have a bad day, month, or quarter and do your best to be supportive rather than critical– especially if the rep has a documented track record of success.
Remember, your sales team is the lifeblood of your organization. Creating a positive seller experience and an environment where reps can thrive is only going to benefit you in the long run.
Step 3: Revisit your compensation plans.
When you’re a business leader, there are a lot of expenses to keep track of. One of the biggest? Your team’s compensation.
Sales comp is one of the biggest expenses in most businesses and yet, many teams report that their compensation plans aren’t as efficient as they could be. So, if you haven’t revisited your sales compensation plans in a few months, there’s no better time than now.
The benefits of auditing your sales commission plans are threefold. Let’s take a look at what this will help you to achieve:
- Smarter investments. Compensation is just like any other money you spend as a business. It’s an investment. And, just like your other investments it’s important that you keep tabs on the program’s ROI. That way, you can make tweaks to conserve in places where you’re spending too much and double down on the people and behaviors helping you to generate revenue.
- Improved seller experience. You’ll be able to improve your seller experience and create a more fulfilling environment for your reps to work in if you’re paying them appropriately for the work they do. An audit will help you identify and close any gaps you find. That way, your top performers and revenue generators will always feel appreciated and taken care of and any under performers will be more incentivized to hit their targets.
- Increase in revenue. By making sure your sales commission plans are incentivizing more of the right behaviors and outcomes, you can expect a corresponding increase in the revenue your reps generate.
We won’t spend too much more time on this topic since it’s something we discuss frequently on the Spiff Blog, but if you’re interested in revamping your comp plans here are a few good articles to get you started:
- How to Secure More Sales Comp Resources During a Recession
- Reprogramming Commission Operations for Maximum Growth
- The Psychology of an Effective Sales Compensation Plan [Infographic]
- Communicating Compensation Changes to Your Team: A Guide for Managers
- Motivating Employees Through Compensation in Sales
Step 4: Plan for the worst
Although only time will tell if we’re heading into a full blown recession, it’s best to prepare for the worst case scenario. After all, it’s easier to look back and laugh at yourself for being too cautious than it is to look back and wish you’d been more proactive. As the saying goes, it’s better safe than sorry.
Research from the Harvard Business Review supports this. Take a quick look at this excerpt:
“The best time to undertake major changes that will strengthen a company during recession is before it hits. Prior to the past recession, both eventual winners and eventual losers in a group of 3,500 companies worldwide experienced double-digit growth rates.”
“Once the recession struck, however, performance began to diverge sharply – the winners continued to grow while losers stalled out. The performance gap widened even further during the recovery. What did the winners do that the losers didn’t? They pursued a variety of tactics before the recession that were designed to fortify the firm when the downturn hit.” (source)
So, what does preparing for the worst actually look like? In the most basic sense, here’s what we recommend:
- Don’t be overzealous with your hiring plans: The best way to make sure you don’t overhire is by having a hiring plan in place before you start looking for new talent. One way to do this is by creating a hiring plan that includes both planned hires and contingency hires (people who are ready to step up if needed). Although it’s tempting to hire for your ideal future state, a recession isn’t the time to take risks. Only hire when you’re sure you need to in order to maintain your existing output.
- Don’t make decisions that aren’t backed by data: Stay away from relying on your gut feelings to make decisions during times of economic hardship. Instead, try your best to justify the decisions you make with well-vetted data. Think of your data as a GPS. You wouldn’t go on a long car journey without a GPS and you shouldn’t enter a recession without one either.
- Automate, automate, automate: We all know the stats about sales productivity and time spent on non-selling activity. In times of economic down turns, it’s important to automate as much manual work as possible to free up your team’s calendars for more revenue generating activities.
Although these measures might seem extreme now, think back to the research cited earlier in this section. Preparing now will benefit you long term and might even save your business in the face of a recession.
Step 5: Refocus your selling strategies
There are fewer dollars to go around, especially in B2B sales. As a result, it’s more important than ever to revisit your tried and true sales strategies before economic hardship really hits. The same tactics that worked in good times won’t work in bad times. So, what do you do? We recommend changing things up. Here’s how:
- Use data to fine tune your qualification process: If you don’t already have a grasp on pricing and deal size, it’s time to get well-acquainted. Dig into metrics to determine how much time, money, and sales resources you spend working a single deal. Then look at the average deal size or customer lifetime value to determine where your cut-off is when it comes to deals that are too small to be profitable. Adjust your qualification process accordingly.
- Consider your business model: Is there any opportunity to implement a self-service or freemium version of your product? Depending on your product and business model, self-service options are a great way to make money from smaller deals without expending the same amount of resources.
- Revisit your positioning: During a recession or economic downturn it’s important to focus on the two things that your buyers are most worried about– revenue and ROI. In order to keep sales up during hard times, your reps must be trained to prove value in ways that matter. Prioritize enablement and sales training to make sure each sales rep understands how to concisely explain how much money prospects will save or how much their revenue will increase by purchasing your product.
Final Thoughts on Recession-Proofing Your Sales Organization
As you tighten your belt and keep close tabs on your budget, other companies will inevitably do the same. In B2B sales this poses a unique challenge, but if you start preparing now, this may also be a great opportunity to set your organization up for long term success.
Remember, when so much feels outside of your control, it’s important to focus on the things you have a direct impact on. Your sales organization will thank you.
Spiff is a new class of software that creates trust across the organization by delivering real-time automation of commission calculations and motivates teams to drive top-line growth. With a combination of an intuitive UI, real-time visibility, and seamless integrations into current systems, Spiff is the first choice among high-growth businesses. Spiff’s sales commission software enables finance and sales operations teams to self-manage complex incentive compensation plans and provides transparency for sales teams.