Karen Green presents the five step CEO blueprint for trading your way out of a financial crisis
“We are seeing two types of business during the current crisis – multinationals who have cash reserves and the confidence to continue to invest in infrastructure and marketing which enable them to grow and be ready for the future…and those who don’t.”
So, said a client of mine, who is successfully winning multimillion intralogistics contracts with businesses that are willing to invest but also seeing others withdrawing from the game either because they are not willing to take a chance or able to put funds into capital projects.
But who is right in times of financial trouble – the confident spender or the cautious saver?
Research shows that it is the spender who wins during recessions, especially when increasing marketing spend. McGraw-Hill looked at 600 companies from 1980 to 1985 (during the 1981-82 recession) and found those businesses which chose to maintain or raise their level of advertising expenditures had significantly higher sales after the economy recovered. In some cases, sales were over 2.5x higher than those that did not continue to advertise.
You might be convinced that it is the right way to go, but you might not be able to invest. Massive inflation on raw materials, logistics and labour not to mention consumers tightening their belts and less willing to spend is impacting on revenue. The knee jerk reaction for many CEOs is to hunker down, focus on cost cutting and ride out the storm reducing expenditure.
But you have to speculate to accumulate. The only way to create real profitable growth is by doing just that… growing! Cost cutting might help to mitigate overhead inflation and might even help you manage a survival cashflow but as a successful CEO, you don’t want to survive you want to thrive and to do that you need to trade your way out of the financial crisis.
So how do you ensure your business sells more and sells better?
The CEO five step blueprint for trading your way out of a crisis
CEOs need to consider building a 5 point plan to create the virtuous circle that builds brand awareness, generates sales and new business growth, that creates the revenue to reinvest, and so the cycle continues.
Step 1: Build Awareness
77 percent of B2B purchasers will not speak to a salesperson until they had done their own research (The Corporate Executive Board) which means you need to be out there building brand awareness so they can find you.
To be found, you need to really understand your target customers and target them in the right way at the right time with the right messages with a strong trade marketing plan.
Buyers are not swayed so much by advertising more by advertorials, webinars exhibitions and of course social media. Building awareness is critical throughout the selling process This may involve trade press advertising/PR, exhibitions, webinars or LinkedIn.
Step 2: Unique Value Proposition
Everyone is experiencing some form of financial challenge right now whether that is falling footfall in stores, drop in consumer sales or general lack of confidence. This creates an aversion to risk which puts buyers off buying.
The solution is to totally understand your target customers’ problems and how your business can solve them whether that is boosting revenue or cutting costs or just making their life better.
The art is to create the unique value proposition for each customer that really demonstrates an understanding of their business and how you will transform their life not just during troubled today but into the brighter future of tomorrow. Every customer is different and everyone needs a tailored solution that creates value.
Step 3: Getting to Yes
Many retail buyers are not taking on new suppliers right now as they are focused on inflation and sticking with what they know. But as we have already seen, a cautious approach to trading does not bear as much fruit as an ambitious growth plan. Selling compelling value proposition in a creative and tailored way alongside some skilled negotiation is going to close the deal and get to yes.
This is often the area that most CEOs need to invest in training – to ensure that their sales teams are well equipped for this critical part of the BUYER process.
Stage 4 Successful Execution
Trading your way to success isn’t just about closing the deal. How you execute the deal is critical and having the right teams to do this is a key part of Stage 4.
Be very clear on the offer agreed in stage 3, so that the team can deliver on time, in full, to the quality that your customers expect without any difficult surprises. This can be tough in a world of shortages, logistics and other challenges. But successful execution means happy customers and happy buyers who are more likely to buy more which leads us to the final step:
Stage 5: Review, Reorder and Recommendation
Research by Gartner showed that increasing customer retention rates by five percent increases profits by 25 percent to 95 percent so keeping the customer satisfied is a very important step so that we can have an awesome stage 5. You need to plan for positive reviews and reorders that will help generate more revenue. The business also needs to anticipate their future needs so you can diversify and add additional ranges.
The second key outcome is gaining referrals. Now, if you are selling to a high street retailer, they might actually want to ensure you keep all the good stuff for them and would not even think about recommending you to another retailer. But the buyer might recommend you to another buyer especially if you have created some synergistic products in another category
And did you know that 84 percent of B2B decision makers begin their buying process with a referral (Sales Benchmark Index)? A happy customer creates more sales, both from their own company and also referral to others
And thus, we come back to the start of our virtuous trading cycle – increasing revenue through buy building awareness of better targeted products and services which gain more “yeses” and through effective execution lead to reorders, positive reviews and recommendations.
CEOs need to speculate to accumulate and lead their businesses into successful trading cycles of growth that enable their businesses to generate more revenue that can be reinvested into marketing through the BUYER process.
Karen Green is the author of Buyer-ology: Know your buyer, sell more and sell better. Published in March, it is available from all leading bookstores.