Sales Leadership In An Economic Downturn

Canary Wharf with razor wire

If sales leadership is about creating the right motivating atmosphere, one that stimulates salespeople to give their best as frequently as possible, it raises an intriguing question – what is the correct Sales Leadership position going into a recession?

In our work we are seeing some intriguing evidence emerging:

  1. The first thing is whether the sales leader is old enough to have been in a previous recession. If a definition of leadership is ‘grace under pressure’ we find sales leaders who are able to contextualise the current situation transmit greater confidence to their salespeople. Being able to show how the market is likely to behave, how customers will want to shape the relationship agenda differently, and how the salespeoples’ own organisation is likely to behave, all give salespeople the idea that their leader knows what is going on.
  2. Next, understand what you are dealing with when it comes to the sales force. Have they seen a recession before? Have they been tested in these conditions? Put more controversially, many haven’t really been asked to sell until now. In a recession the only way to maintain sales levels is to take market share, this means selling competitively, beating the competition to business opportunities. This requires a tougher sales stance, one that demonstrates resilience in the face of rejection and a dynamic, clear line of approach around why the customer should buy from you. Seasoned sales directors know this; they prepare their salespeople to move out of the reactive sales comfort zone and into the tougher area of proactive business taking. We find that organisations where salespeople routinely develop new/new (new customers, new business) revenues are better equipped for difficult economic conditions.
  3. The biggest risk a salesperson can take in their job is to sit in front of an actual or potential customer and ask for the business. There is nothing more dangerous they can do. What is critical to understand about sales motivation is when sales people feel stressed, unconfident, a failure, this critical activity becomes too difficult, so they avoid it. What is known as Failure Avoidance. This appears completely counter intuitive. You would think when the going gets tough, the salesperson seeks more closing opportunities, but that’s only true when they are well motivated and feel confident in their ability to cope with objection and possible rejection. If not, you will see procrastination, and more secondary activity (admin, report writing, customer research etc). The number of closing opportunities created goes up with successful salespeople and goes down with struggling ones, which of course reinforces each mode of behaviour and becomes a self fulfilling prophecy. Sales leaders see this and coach to avoid it becoming ‘grooved behaviour’. The quickest way to increase sales confidence is through success, the quickest way to success is to be around customer opportunities, get out there guys!

There is a companion piece to this article With A Recession Coming (or Not) 10 Things Management Can Do To Keep the Sales Force Focused, Positive & Performing.