Ian: Welcome to the Business Coach Podcast, an advice-oriented series that tackles the top issues and opportunities facing Canada’s small businesses. I’m your host, Ian Portsmouth, the Editor of PROFIT Magazine and we’ve developed this podcast in cooperation with BMO Bank of Montreal.
How do you sell more in a recession? Well, it’s not a trick question, even though a recession is symptomatic of a diminished desire among consumers and businesses to spend money, you can’t convince them to buy whatever it is you are offering. You just have to work harder and smarter at it. Here to share some smart selling strategies for recessionary times, is Dominic Rubino, a Vancouver-based sales and management trainer who writes a regular online column about sales for profit. He is also the CEO of FocalPoint Business Coaching in partnership with Brian Tracy. Dominic, welcome to the Business Coach Podcast.
Dominic: Thank you for having me.
Ian: Dominic, from a sales person’s perspective, how do customers typically change in a recession, how does their mood change, how does their outlook change, how does that impact their buying decisions?
Dominic: Thanks Ian. You know the way customers typically change in a recession is they’re looking for ways to get more functionality out of their products and services that they buy and they are probably questioning to a higher degree whether they need to buy it at all.
Ian: Are some customers better than others in a recession? For instance, you know, is it probably a better bet to go after your existing customers than new customers?
Dominic: Well, existing customers are always the easiest place to make a sale. And that’s simply for the reason that they know you, they have a relationship with you, they probably already passed a credit check and you know what they have for equipment, materials, services or supplies and you know what could be added to that account. Aside from that, looking for new business, this is probably a great time to go after your competitor’s business because there would be a lot of unknowns on the competitor’s side as to what they are doing. So it would be a great time to approach accounts that you’ve always wanted to go after.
Ian: Now given that most buyers are price-sensitive during a recession, what are some good ways to change the perception of your price? So how can you make it look like your price is actually less that it really is?
Dominic: Well, I mean the price is the price of course. But one of the ways to do that is really to use the topic of framing. So rather than to blur out the price, let the customer know that you’ve had some big meetings internally, you’ve decided that our company ABC is really going to take part in helping the growth of Canada and we are doing that by helping to have some creative pricing strategies. So you’ve just rolled out a new program that allows customers to pay x amount in advance in x amount of payments. Now, even if that’s the existing program you had before, framing it in a way that makes it beneficial to the client now is probably going to fall on welcome ears, although they may have ignored that advance even two months ago.
Ian: Now, what about the idea of pencil selling. Can you tell us a little bit about what that is and whether customers have the patience for it during hard economic times?
Dominic: As a matter of fact, I think their patience has increased for pencil selling right now. Of course, pencil selling is the ability to take the purchase of your product and reduce it to its lowest common denominator. So for instance, if you are selling forklifts, reduce it to what that purchase would, or that investment on the side of the customer would be on a per hour basis, if you could track it by hour or per use basis or length of lifetime of product basis. And that makes it easy for the customer to justify, in the case of a forklift, if they know that they are paying $0.03 an hour for a forklift, but their productivity is $0.07 or $0.70 an hour for doing that work, it starts to make a lot more sense to make that purchase now.
Ian: Now of course, it’s not always about price, it’s also about value and even in a recession, I presume customers are still interested in value for their money. So how do you demonstrate the value of your product?
Dominic: I think right now would be great time to demonstrate more value from a product. And that would be products that have more than one functionality or you are able to draw the case were this product did have more functionality. So if you can show fuel savings for your product, space savings, maintenance savings, longer life, all in one strategy, right now, that would fall in very welcome ears again on the purchasing side when they realize that through this one purchase from you, investment with your product or service, they were able to do more than one thing, that would be something a company would be welcome to see.
Ian: Now, that brings us to the idea of differentiating yourself from the competition and sales people across the business spectrum are going to be out there using some of these same strategies in a competition with each other. So how can you still differentiate yourself above and beyond the pricing strategies and some of the things you’ve already explained?
Dominic: Yes, this is really a time to get back to the feature benefit and what it’s in for me selling. Clients are making purchases right now; there is no doubt about that. Business hasn’t stop, it’s just that the questions have changed. And the desire for new acquisition has changed. Why are they making that decision? Now is the time to really go back to what your product and service does, what the impact on the business would be and why they should do it, what’s in it for them. So going back to show your benefit are taken more seriously.
Ian: Now finally, you’ve been in sales for a long time, can you share any secret inside tips for our audience of entrepreneurs?
Dominic: I think now would be a real good time to think about pulling out the big guns, get the big guy involved, if you will. Now is a great time for customer to hear a message directly from the President for instance or the CEO of the company. Imagine something relatively small, like somebody buying a new shredder for their office and they are looking at a number of suppliers, they know they need a shredder, etc. That need has been established. But then they get a phone call from the owner of the shredding company who says “We had many meetings in the company talking about you there and I just want to let you know, we are very excited about the things you are doing to move forward in this economy and we really hope you are going to buy a shredder from us.” That makes you stand out from the competition because now that customer knows they are not just a number. And that’s I think what really draws that difference in. Sales are still made on emotion, not logic. And you can really make them vocal a lot of emotion by getting them to feeling that they are talking to the highest level possible.
Ian: And these are emotional times. Dominic, thanks for joining the Business Coach.
Dominic: Thanks Ian.
Ian: Dominic Rubino is a sales and management trainer based in Vancouver as well as the CEO of FocalPoint Business Coaching in partnership with Brian Tracy.
That’s’ it for another episode of the Business Coach Podcast. Be sure to check out other episodes which you can download from BMO.com, profitguide.com and iTunes. If you have any comments or suggestions about the podcast, please send them to me at firstname.lastname@example.org.
Until next time, I am Ian Portsmouth, the Editor of PROFIT Magazine, wishing you continued success.