The outbreak of COVID-19 is affecting business unlike anything we’ve seen in modern history. The ground under us seems to be shifting and changing faster and faster, and the impacts to society are unprecedented.
Earlier this month, Challenger reached out to sales and marketing leaders to get a sense for how their organizations are addressing the crisis. In the few weeks between our two surveys, it is clear the situation has shifted dramatically, and sales leaders everywhere are updating their plans and strategies to match.
One of the biggest changes we’ve seen is that respondents believe the duration of this crisis will be longer than initially expected; companies now believe it could take as much as 4.5 months before business returns to normal, which is about a month longer than previously thought. In addition, these same respondents report that nearly a third of their anticipated Q1 pipeline has been postponed due to the virus, revenue that may never be recaptured.
Companies are starting to batten down the hatches for the long, unpredictable storm ahead.
First, and most fundamentally, COVID-19 has immediately and massively disrupted how companies communicate. Given this, it is no surprise that the vast majority (90%) of B2B companies have aggressively transitioned to a teleworking environment to ensure their teams remain connected to each other. While the pace with which companies embraced this change is impressive, teleworking is merely “table stakes” for business continuity – teleworking doesn’t do anything to address the abrupt market developments faced by every company’s customer base.
To this end, the Challenger team is eager to understand how sales organizations have been modifying their strategies to address the unique implications of the COVID-19 outbreak and its downstream impacts. What you’ll notice first in the chart below is that only a minority of respondents have taken any decisive action and the most common action, by a good margin, is transferring marketing budget to digital spend – an obvious step in an era of social distancing.
Although it’s commonly understood that revenue will be dramatically affected, only around a quarter of companies have changed account plans, adjusted revenue goals, or looked for ways to adjust pricing and product scope to be more competitive.
Uncertainty is the most common emotion everyone feels right now – and we are justified in feeling; it when we can’t predict what will change day-to-day. But there are common sense actions we, as sales and marketing leaders, can (and should) take. We present the five most critical to consider below:
1. Engage Your Highest Sales Performers
Never is the Pareto Principle – that 80% of the incremental output comes from 20% of the team – more acute than in times of crisis. In previous downturns we’ve observed that the gap between top and core performance widened as sales become more difficult to achieve. To this end, engaging top performers can mean the difference between an organization floundering or succeeding in the face of major headwinds. Sales leaders must make their best sellers feel rewarded, appreciated, and amply prepared to continue doing their best, every day. And, lest we forget, top performers always have somewhere else to go if you don’t treat them well. During the Great Recession, while millions of people were being laid off, there were still a few million people each year who quit their jobs and went elsewhere to work despite the dire economic climate. These are disproportionately people with highly valued skills, such as “rainmaking” salespeople.
Good treatment starts with resetting to realistic expectations. If your business is struggling, you will want to consider signaling adjustments to quota expectations and commission plans as soon as you can. Uncertainty of expectations, together with shrinking pipelines, lower conversion rates and longer sales cycles may send high performers a signal that their current gig has run its course and they should start looking for the next.
Do not lapse in providing more regular coaching to show you are invested in the deals your team is working and the skills and strategies they will need to close them. Even top performing sellers will encounter customer issues and selling situations in the coming weeks they have never encountered previously. You can’t expect them to navigate these new situations without real-time support. Virtual training and coaching are necessary modes of engagement now, and if you’re not already, you need to be prepared to offer these solutions ASAP.
2. Rethink Your Account Plans
This social and economic crisis is affecting every business differently. In some industries (travel, retail, etc.) activity is at a standstill. But other industries (CPG, Healthcare) can’t keep up with demand. Your sellers and your marketers need to understand and tailor messages/solutions account by account. Presenting the wrong message or the wrong solution in this emotionally charged environment could damage credibility and make repairing that relationship nearly impossible.
Sellers must take time to listen closely to their accounts as part of restructuring the plan. What, of a host of potential problems, are they prioritizing? How are they taking delivery of what they buy? How are they operating and serving customers? What is their market or customer base experiencing? You’ll be significantly better positioned to succeed if you understand clearly where opportunities are possible and where they are not.
3. Review Territory Coverage/Segmentation
This step may require a longer-term implementation, but it’s worth planning for now. After evaluating your account plans, you may find it necessary to pursue new markets and new customers to generate as much revenue as possible. Consider the following questions: Have you focused enough attention and limited distractions in the territories containing your key accounts? Do you have your best hunters focused as heavily as possible on generating new business in the customer segments that offer the greatest promise in the current market environment? Have you positioned relevant product expertise appropriately in territories with the best cross sell / upsell potential?
One more important thing to consider: Sparking the attention of new customers and moving them through a complex decision cycle in this economy will be a challenge. You’ll need skilled sellers who approach customers with powerful insight and build a compelling case for action. These individuals may not be the same “volume hunter” profile that worked in a market with high demand and customers flush with cash.
4. Align Your Insights to the Current Situation
Now, more than ever, your ability to offer meaningful, actionable commercial insight to your customers will be central to your success. But it’s likely your commercial insight needs a refresh. Just a few months ago, in a healthy economy, the most common challenge with commercial insight was finding a hidden problem significant enough to motivate customers to act. Now, the same customers are overwhelmed by problems affecting the core of their business. The challenge will be prioritizing the right one. Once you do, make sure you’ve done your homework to tailor it properly, deliver the facts with empathy and make sure the path to business improvement, using your differentiated solution, is crystal clear.
The good news is that tough times favor commercial insight. We know from years of researching decision-making that buyers are uniquely open to new ideas during crisis and will seize on new perspectives offered. But marketing and sales must act fast. Customers open to new ideas are also open to considering new sources for those ideas, including your competitors. Your ability to bring commercial insight that leads to customer improvement is the only way to truly protect these relationships.
Also, consider the full path for these fresh commercial insights. Have you mapped them into the buying journey, providing the necessary content to your customer Mobilizers to support building consensus and taking the opportunity to close? Has marketing incorporated them into the digital content ecosystem (website, email, social, webinar, etc.)? As both selling and buying become more virtual, the need for powerful digital content to spark attention, introduce insight and confront to motivate action is greater than ever.
5. Remove Sales Process Friction
Nearly all B2B sales organizations now find themselves needing to manage complex deals exclusively in a virtual environment. The same is true of the buying process executed by your prospective customers. This new operating environment, together with rapid policy changes on both sides, will introduce a lot of friction into the mix. An ounce of understanding/flexibility/ patience goes a long way to creating momentum and maintaining positive relationships with prospects.
More specifically, it is our belief that buying behaviors will likely not revert to the status quo ante. As companies find new ways to conduct business, purchase behaviors are bound to shift. In this environment, it may be necessary to temporarily relax your expectations of how business “should” be done. As you think of your current sales process, we think it is reasonable that the following pieces will need to adapt:
1 | Demand creation activities will need to become digital native accelerating a trend that has been observable for a while. One hypothesis is that sellers will not fully regain access unless they double-down on insight delivery as opposed to being focused on solutions delivery. It is reasonable to assume that channel structures will change.
2 | In times of stress, buying decisions always move up in seniority. In this environment, it becomes ever more important to identify the right mobilizer with the motive, and budget, to be able to rally behind a purchase.
3 | Negotiation practices will likely change. Buyers may respond to increased risk by looking for more rigorous contracts. On the seller side, speed to respond will of utmost importance given that buyers may change their minds.
4 | There will be a period where both sellers and buyers will have questions about each other’s financial viability. Sales will need to work closely with finance to address these issues.
5 | As delivery and fulfillment requirements change, companies will look to protect their supply chains. Companies whose businesses have accelerated, will likely be looking to diversify supply and will want increased transparency.
To stay competitive, you need to be prepared. Being prepared is taking the right steps before you are forced to do so.
Sales and marketing teams now face the extremely difficult task of re-examining almost every assumption they made at the beginning of the year. In a matter of just a month, contexts have changed dramatically, and competitive positioning and business health mean something very different than they did in February. Maintaining business continuity in such a volatile environment is going to mean asking hard questions and taking decisive action.
We’ve given you five important steps to start with. Over the next few days, we’ll be describing each of these five in more detail to give you greater insight into how to accomplish them, pro-actively and successfully.
We’ve created a one-page graphic that highlights the key steps sales leaders need to take now to position themselves for a stronger recovery.
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