“A rising tide lifts all the boats”.But when it goes out some of the boats end up sitting on the rocks!
The good economic times over the last few years have probably covered over a few business shortcomings. It has been hard not to do well, when there has been lots of business around. Now the game has changed in two ways. First there is less money around, and secondly, because there’s the same competitors, there will be more competition for the business that is around.
The natural response is to cut costs to manage the anticipated reduction in revenue. That’s important always. But here are a couple of other things to think about:
- How effective is your business development process? In particular I’d look two aspects – at the quality of the sales interaction and the effectiveness of sales management. I am always astounded by the generally poor perception of clients towards suppliers involved in tender situations. Most sales people still don’t ask enough questions and don’t listen well enough. And most sales management is focused on results. You can’t manage results as you have no control over them! Clients decide! Sales management needs to focus on behaviours. What are the right behaviours at this point in time? Based on the sales pipeline, sales targets, and the specific client.
- How effective are your client/supplier negotiations? Like cost savings, these go straight to the bottom-line. What I notice in sales teams is a tendency to give value away. They want to get the deal, profitability isn’t that important! Of course, they don’t say that. There is always a very good reason why they have to give value away!
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