Sales Leadership in a Tough Market – How to spot a downturn

How to identify when your business is going into a downturn might seem blindingly obvious - sales reduce.  As smart and experienced as we all are, however, sometimes being busy with the quarterly number can cause us to overlook danger looming ahead.  Added to which some of those signs of a downturn may not be so obvious or may need analyzing as a cluster of signals to uncover what is happening around you.

So here are 11 warning signs:

1. Late or non paying customers -especially those that have changed their normal payment patterns
2. Pipeline freeze - its not just cold weather that freezes things up, budget cancellations and cuts can result in prospects getting stuck or simply fading out of a pipeline - checks to see if prospects are moving in your sales process can help detect this danger
3. Competitive panic - keep an eye on competitors, if they are really suffering you may see them in bids to customers you are trying to win offer price reductions, some dramatic, or bundling of services for free.  Any of which could threaten your win probability.
4. Suppliers, on who you depend, can also come under pressure.  Pay particular attention to the availability of products and services that are critical to your sales
5. Governments, in severe downturns, can make changes to regulations without the usual consultation of affected businesses.  Of course such changes may have a positive impact on your business but they could equally present a severe threat
6. Large organisations can impose restrictions on subsidiaries limiting their capabilities -ignoring the viability or success of the subsidiary.  Look out for trouble from above!
7. Money in all spending budgets starts being delayed, reduced or cancelled.  This affects not only customers and their ability to place orders but also internal sales budgets for events, promotions and hiring
8. Reporting starts to become more regular and more detailed as business leaders demand to know what is happening to orders you expect to win.  Are they on time or late, are they at the forecast value or lower?  Monthly updates move to weekly and in some cases daily as executives try and balance likely sales revenue with costs to protect the company’s viability
9. Morale of the sales force drops as the trading environment becomes harder.  Salespeople used to regular success can become deterred and defeatist when faced with customers who delay, or need much more compelling reasons to place orders.  Maintaining high morale with an emphasis on training to present quantified business value, planning and activity is vital to win business in a downturn
10. Changing plans, even those involving a major strategic direction, at very short notice can be a sign that a downturn has been identified at a senior corporate level
11. Stopping non core activities indicates a “tightening down” of an organisation, in your customers this may be a forerunner of orders being delayed or cancelled.

Do you know any other warning signs that we can add to these 11?

For a comprehensive discussion of all these points and 15 other sessions check out the online sales leadership course How to protect your topline in a downturn.

Richard Lowe
www.lets-begin.com