The difficult economy we’re currently navigating brings to mind an old saying by Winston Churchill: Never let a good crisis go to waste. Sure, volatile conditions certainly create challenges for software sales, but a downturn also brings a window of opportunity. The key is finding ways transformation can help companies identify and adapt to these “silver lining” opportunities.
Think about this: A tough environment brings out the survival instincts of CFOs. They start tightening their belts and reducing budgets. They begin establishing higher prioritization metrics, such as preserving their internal rate of return (IRR) and solidifying payback periods. All in all, they’re forced to make more thoughtful choices and to be disciplined with corporate spending. On the surface, this is not great news for technology sales teams, since these CFOs will have a tougher set of purchasing criteria.
However, this also presents a unique, time-sensitive opportunity for sales teams to gain market share and accelerate top-line revenue — if they can be agile. Difficult financial straits never last forever; the window will eventually minimize or close, so sales organizations should act quickly. Even businesses whose products are in high demand during crises — like Clorox or Lysol during the pandemic — may struggle when the situation starts to normalize. But this transition out of a down economy can be a catalyst for change and innovation, because shifting circumstances call for transformation. And businesses often look to technology to facilitate change and add capabilities.
Match Transformational Opportunity with Transformational Value
Think of the saying “innovate or die” by entrepreneur Peter Drucker. Dire circumstances encourage us to dig deeper and push ourselves, both as innovators and as salespeople, to create opportunities that didn’t previously exist. “Innovate or die” is an ever-present concept in a weak economy, because the consequences of failure are starker. Yet sometimes, innovation and success come because of, not despite, a downturn.
For example, Kodak was awarded a $745 million government loan in 2020 to produce pharmaceutical ingredients, to strengthen the domestic supply chain and reduce dependency on foreign countries. The company, which formerly made film and photographic products, launched a new branch, Kodak Pharmaceuticals, to address this opportunity during the pandemic.
Rise To Your Customers’ Innovation Strategy
Not everyone suffers during a crisis. For instance, food delivery services like DoorDash and Grubhub prospered during shut-downs, for obvious reasons. Grocery chains followed suit, shifting to online deliveries. Retailers quickly added curbside service and stepped-up e-commerce capabilities, which consumers continued to favor even after social distancing ended — despite predictions that retail would falter.
By the same token, technologies related to collaboration, cloud services and unified communications went through the roof as people rushed to accommodate remote work and distance learning. Manufacturers of notebook computers and webcams couldn’t keep up with demand. Where there’s a deficit, you’ll find myriad chances to prosper — although you have to be nimble and responsive enough to know what new requirements your solutions should address. Pinpoint the area of your product offering that is positioned to rise, and build up that end of your business. In the current market, that could be security, software that accommodates modernization or cloud-based collaboration solutions, all of which can help enterprises transform their models for the new hybrid workplace. Or, something more unique might suit your own business model.
Regardless, there will always be competitors responding to external pressures simply via aggressive discounting. However, a race to the bottom is never the optimal strategy. It drives down margins for everyone. Pivot your offering instead. Enterprises in the market will be forced to innovate and adapt their business models to changing circumstances. As a software provider, are you demonstrating innovation and agility also? In a down economy, your value has to be about transformation, because that’s what your customer will need to achieve.
The Finite vs. the Infinite
Always keep the realities of business in mind. Many of us have been trained to sell solutions that help clients reduce costs, become more efficient and automate tactical tasks so they can focus on strategic initiatives. That’s basic, foundational selling.
There’s one problem with this in a restrictive economy: Cost savings are finite. There’s only so much you can reduce; you can’t go lower than zero. In contrast, revenue and top-line growth increases are theoretically infinite. It’s much more compelling to focus on solutions that create cost centers and generate new revenue streams in these scenarios. A focus on growth can encompass so many more areas: revenue, increased go-to-market channels, commissions and more. There’s no limit to how fast a company can grow mathematically, while cost of goods and administrative expenses can only be shaved so much.
Focus on the Individual
When pitching software in an unsure financial landscape, concentrate on the risks your customers are trying to address. Think about the individual you’re selling to and their personal pain points. For instance, everyone is fixated on job security in a tough market. Ask yourself, “Will this sale put the individual I’m pitching at a higher risk due to its complexity, scale, or risk?” Your solution should instead focus on positioning that person as a transformational leader who can drive company success.
In conclusion, a bad economy will pass like everything else; the only question is when. Even in the worst financial straits, there will always be ways to identify opportunities, and succeed where more rigid or less diversified organizations falter. As a software provider, you have to be innovative and observant enough to meet your customers’ evolving needs, delivering solutions that help them transform and thrive in the face of adversity.