Q: I’m seeing a lot of anxiety and nervousness about the economy all around me. Do you have any thoughts on how to respond to this?
To my readers…This started out as a normal question and answer. The more I wrestled with my thoughts, the more I became convinced that I had a responsibility to take my response to deeper levels, and so I have. We are going to vary from our normal format and my response will be separated into a second and third post. So, be forewarned. This contains some thoughts that you are not used to hearing from me. I’d love to hear your responses…
Answer: I sure do. I’ve been through a number of economic downturns, have weathered years of rampaging inflation, and have struggled through a couple of personal financial cataclysms. I’m coming at this subject from the point of view of a battle-scarred warrior who has been here before and learned some lessons along the way.
If you will permit me a little leeway, I’d like to ramble for a bit, and then talk about how, as a salesperson, you should respond to this. In Part II, we’ll discuss what you as a business owner or manager can be doing. Finally, in Part III, I suggest some things that you, as a person, should be doing.
First, a Bit of Perspective of Economic Hardships
We certainly are in for an economic contraction. I’ve lived through at least a half dozen of them. You should know that this is not at all unprecedented. You may recall that in the Old Testament Bible, the Law of Moses prescribed a Year of Jubilee every 50 years, in which all the property in the Jewish state reverted to its original owner, and all debts were canceled. God knew human nature and knew that without some built-in corrective mechanism; people would act in a way that brought on regular and cyclical economic chaos. The 50-year cycle prevented that.
We, however, don’t live by the Old Testament. So, in the history of this country, there have been major financial corrections at about that interval. The Great Depression was in the 1930s. There was another major economic upheaval in the late 1800s, about 60 years preceding that. There is a regular cycle in economic activities that occurs when a couple of generations of people grow up not having learned the lessons of the previous generations. They then make imprudent decisions that lead to an economic contraction. This occurs predictably, over the course of human events, about every 50 – 70 years.
That is exactly what is happening now. I am a Baby Boomer, and my generation, for the most part, has not been guided by the lessons of our parents. We rebelled against the morals and restrictions of our parents and created the climate for the current malaise. And younger generations have, for the most part, paid little attention to the lessons taught to them. So, several generations of people have ignored the lessons that their parents and grandparents learned. Millions of people have made bad decisions, and, as a result, we are facing a significant financial contraction.
Nervousness and Living Far Beyond Your Means
The fundamental mistake is, of course, to live far beyond your means, and to focus on the acquisition of material things at the expense of the development of soundness of character and the pursuit of deeper values.
How that plays out in our day-to-day lives is this: In the 2008 contraction, prompted by mortgage brokers and financial service companies who were motivated by selfishness and greed, hundreds of thousands of people bought homes and cars they couldn’t afford, and pursued a lifestyle funded by someone else (the mortgage lenders and credit card companies). Driven by greed and the pursuit of things, millions of individuals found themselves over their heads in debt. Many companies, driven by the same motivations, did the same. The politicians and bureaucrats that make up the federal government, driven by greed and power, did the same thing by spending money they didn’t have.
As a result, the country is trillions of dollars in debt. Sooner or later, that debt has to be confronted. Some of that occurred in the real estate crash. The years of several generations of people spending more than they made, living a lifestyle beyond their means, finally came home to roost.
In my opinion, (and I’m not an economist) we are likely to see a significant economic contraction in the next few years. Don’t count on the government bailout to fix things. It may blunt the intensity for a while, but many people, whom I respect, indicate that it is way too little to make a significant difference. In the history of this country, government meddling in the economy has always hindered growth and prolonged slumps. It was, in part, the government, attempting to meddle in the free market, that was partially responsible for the 2008 real estate crash. The government changing the fundamental principles upon which our society is based by nationalizing our financial system is not the answer.
The short-term politically expedient fix will eventually undermine the strength of the economy by taking money from those people who have been prudent and wise and giving it to those who have been greedy and selfish. The government will need to raise taxes, and every time the government takes more of our money, it leaves less money for investment and new job creation. Socialism, regardless of what name you call it or how you package it, is not the long term answer to growth and prosperity.
What all this means to you is that we are likely to see two to ten years of very difficult economic times just over the horizon. There is something about adversity that sharpens us, that helps us to focus on the really important things in our lives, and that makes us better and stronger people, if we respond correctly. Many people will look back on this time, say ten years from now, and reflect that it was, ultimately, good for them to have gone through it and learn the lessons only hardships can teach us.
I hope that will be true for you.
Now, assuming that you are a salesperson, here’s my advice to help you successfully navigate these turbulent times and come out the other side stronger and better.
As a salesperson …
Your basic strategy is to work at making yourself as productive and profitable as you possibly can.
Understand this. Unless you happen to be in one of those slices of the economy that is robust right now, your company is probably not growing in the way they would like, and in the way in which they have become accustomed. It may even be shrinking. That means that your company can probably not tolerate the luxury of unproductive employees. As they look over their group of employees, they naturally will keep those who are most valuable and productive, and cut loose those who are least valuable and least productive.
Looking at this issue through your managers’ cold, hard perspective of needing to pay the bills and make the payroll, they can’t afford the luxury of keeping you around just because you’ve been there a long time. The questions will be these: “Who is profitable?” and “Who is valuable?”
So, You Must Be Profitable and Valuable
Work harder, work longer, do more, help your company make it through the difficult times. If you don’t, believe me, there are a bunch of people who would love to have your job.
Forget your pride. Forget your years of longevity with the company. Forget the contribution you made last year. None of that matters. Focus on contributing to the company right now.
That should be your basic mindset. Now, specifically…
1. Make sure you are investing your time wisely and spending time with customers who are likely to pay their bills and survive. This is not the time to feel sorry for good old Joe, your buddy, who is hanging on by his fingernails to a business that probably shouldn’t survive in the first place. Get tough-minded and analytical on whom you call, and how much time you spend with them. See Chapter Five of my book, Eleven Secrets of Time Management for Salespeople for a system to help you do this.
2. With those customers who are worth your time, focus on being more important to them. If you are a marginal vendor and have a not too significant piece of their business, you are vulnerable. You want to become important to those good customers. That means digging deeper, knowing people all up and down the hierarchy, finding ways to reduce their costs (not their price, but their cost,) and putting together combinations of your product and services in ways that help them grow their businesses and become more profitable. See my book Question Your Way to Sales Success for specific ideas on how to do that.
3. Communicate, communicate, communicate. Bring all kinds of information and observations back to your company’s management. Become an information magnet in the market, actively seeking information that may be helpful about customers, competitors, markets, products, trends, etc. Look for opportunities for additional business for your company, both inside your customers as well as inside your markets. Constantly bring ideas to your management about things that you have seen, the opportunities you’ve discovered, and partnerships that could be created, etc.
4. Distance yourself from your competitors by becoming more professional, more focused, and more of a consultant to your customers. Your competitors will, for a while, desperately try to cut prices to keep their doors open. Don’t follow suit. Take a longer-term perspective.
Focus on doing these basic things better:
- Engaging with the right people.
- Strategically creating positive business relationships.
- Knowing your customers deeper and in more detail.
- Providing larger and deeper proposals that make you more important.
- Leveraging every relationship and transaction to wring more value out of it.
- Manage yourself effectively. Don’t give in to negative thoughts or depressed emotions. Refuse to be a victim. Work on the premise that you are responsible for your actions, and your actions produce your results. You are ultimately responsible for your situation.
Accept the responsibility and make good things happen. There is a great book to help you with this. Read Learned Optimism by Martin Seligman.
I know all of this is easier said than done. However, I’ve devoted the last 30 years to developing resources to help you do these very specific things. Visit my web site, www.davekahle.com, or The Sales Resource Center, or call us to talk about our resources to help you implement these things.
It’s much easier to be successful when everything is growing. All you have to do is show up. However, it takes a real pro to be successful when things are going in the other direction. This is the time to prove yourself.
Sales Training Shouldn’t Be This Easy
Add an hour to your sales meeting once a month. All the content is online, the handouts are downloadable, and your instructions are emailed to you. It couldn’t be easier. Educate, motivate, and inspire your sales force in one hour, once a month.
I truly see God’s hand in everything you folks published to help us. Thank you for the years of support.
You are welcome.
Dave, you’re right on the money. I’m a 66 year old business owner of a sales business. It feels just like 1979 to me and sales are going the way they did then. Getting rid of overhead is key and rethinking your sales strategy is key. Think out of the box, bring more value to that customer, things like these helped me through that time.
Thanks for your comment, John. I know exactly how you feel.
Enjoyed the read! As a Pastor and salesman I appreciate the Biblical concepts of your training and look forward to reading more of your materials. I’ve recently stepped down from management to go back in sales after 11 years and this material is going to help me “get back on the old horse.”
Glad it helped! Thanks for your comments.