The economic fallout caused by the COVID-19 crisis continues to present opportunities for leaders to show their resolve. Assertive businesses have taken the lead and have handled the crisis with resilience. This proactive mentality is essential going forward.
The recovery from the crisis will be determined by forward-thinking leaders. Sales and marketing teams have been slashed, and pipelines are running dry. Businesses must take aggressive action to spur an economic bounceback in 2020. There are many challenges ahead, but there is an opportunity to emerge from the crisis stronger than before.
Small Businesses Face the Biggest Challenges
The impact of the crisis has had a devastating effect on small businesses around the world. During the period of Feb. to April 2020, the number of active business owners in the United States plunged by 3.3 million, or 22%, the largest drop in history. Unincorporated business owners dropped from 7.8 million to 5.1 million (34%), while incorporated businesses fell by 20% from 5.8 million to 4.7 million.
Extended restrictions and the resulting loss of demand are creating unique challenges for those unequipped to handle the situation. Many small businesses were operating with extremely low margins before the crisis began, some operating at a loss or only breaking even. The U.S. Census Small Business Pulse Survey estimates that less than 20% of businesses have enough cash reserves to cover three months of operations.
Following the 2008 recession, it took larger companies an average of four years to recover their pre-recession level of GDP, while smaller companies took six years. Like before, small businesses are looking at a longer road to recovery. Many companies will need to make drastic changes to overcome the challenges they face.
Old Sales Funnels Are Drying Up
The shrinking number of businesses and the threat of a prolonged economic slump are causing major difficulties with filling pipelines and closing deals. A SalesHacker survey of a variety of sales professionals highlights the depth of the issue. 57% of professionals surveyed are generating fewer leads, with an average decrease of 20%. Roughly half of the respondents are experiencing a 60% drop in leads.
With fewer leads in the pipeline, booked meetings are even more difficult to attain, with 68% of respondents experiencing a decrease. More than half of those scheduling fewer meetings have experienced a drop of 60%. Those still able to come by meetings are suffering as well. As many as 80% of respondents are closing around 30% fewer deals.
Businesses are adjusting by cutting budgets and reducing staff. The impact of these changes is highlighted in the marketing segment. The CMO Survey for June 2020 observed that 9% of marketing jobs have been lost due to the ongoing crisis. Planned marketing hiring has dropped to its lowest point, going negative for the first time since the survey began in 2008, with average hiring estimated to be -3.5% in the next year. Of those surveyed, 24% of marketers — the largest segment, do not expect lost marketing jobs to return. The inability to function in a normal capacity will continue to challenge businesses going forward.
B2B Sales Operations Are Changing for Good
The ongoing crisis is forcing sales leaders to adjust how their companies sell in the presence of shifting customer behavior. It is not uncommon for sales reps to travel around the world to win prospects with face-to-face meetings. The lockdowns resulting from the pandemic have severely crippled in-person sales. The B2B Future Shopper report surveyed over 200 B2B professionals and found many businesses have shifted away from sales representatives in favor of eCommerce. Roughly 16% said their business bought directly from sales personnel after the pandemic compared to 44% before the outbreak.
The shift to digital will likely be a long-term change. A McKinsey survey of B2B businesses across 11 countries observed that companies see digital interactions as two to three times more important to customers than traditional sales going forward. Nearly 90% of sales have moved to phone, website, and videoconferencing sales models and more than half of companies believe these models are more effective than those used prior to the pandemic.
How You Can Grow Your Business and Spur the Recovery
The outset of the crisis provided the opportunity for individuals and organizations to showcase their strength by leading in the face of adversity. Those who were able to make decisions quickly and take assertive action were able to weather the storm with resilience. This forward-thinking approach is needed to push the next stage of recovery forward.
No one has a precise timeline for a recovery. Professionals across the board have expressed mixed perspectives on a return to normalcy. McKinsey reported that half of B2B professionals are optimistic and expect an economic rebound in two to three months, while 41% were more pessimistic and feel the economy will not recover for six to 12 months.
No matter how long it takes to recover, leaders must come up with new and creative ways to fill pipelines and close deals. The crisis has created unexpected challenges but there is still plenty of opportunity present. A LeadMD survey of US B2B companies observed that over half of respondents are still in the market for purchases. The majority of those considering purchases are seeking new solutions in the wake of the crisis.
Leaders must adapt their message and approach to be relevant in the current climate. What customers looked for in the past is not guaranteed to be the same now or when the crisis ends. It is important to determine which behaviors will change for good, and which segments are most affected. With a better understanding of the new landscape, a solution-oriented approach can be created. Here are a few practical adjustments to help navigate the shifting environment.
1. Now Is the Time to Hire
With ample opportunity to acclimate to the current landscape, now is the time for businesses to hire. Fully functional sales and marketing teams will be needed to navigate the shift in customer behavior and new emphasis on digital channels. It will involve developing new advertising and promotional strategies, performing customer research, generating new leads, and creating new product and service ideas. Bolstering sales and marketing teams will help companies be prepared to capitalize on re-emerging demand.
The post-crisis world will need salespeople and marketers with a different set of skills than before. The increase in remote work will demand self-directed individuals with digital and communication skills. Make it known that your company is hiring and looking to grow at this time. Many viable candidates may assume companies are not hiring given economic conditions. When you let qualified candidates know your company is pushing forward, they will naturally gravitate towards your company.
2. Deepen Connection with Customers
Now more than ever, how you sell matters just as much as what you sell. Many buyers are facing new and complex challenges. They are looking for thoughtful support and guidance for their unique challenges. According to the CMO survey for June 2020, marketers estimate that customers will place more value than ever on trusting relationships, with 29.3% stating it will be customers’ top priority. This is a considerable rise from only 19.9% saying this following the great recession in Feb. 2009.
Now is not the time to take a blind guess on which targets are in the market. A cold reach out during a tense situation could alienate the prospect forever. Moreover, targets that are showing some level of demand require a different approach. The focus should be long-term and to nurture leads thoroughly. If you approach leads with an aggressive or irrelevant pitch while they are struggling to get by, you have tarnished your chances of ever doing business with them. However, if you act with empathy and focus on providing value during this difficult period, you will be perfectly positioned when they are ready to buy.
3. Enhanced Analysis of Customer Data
Diving deeper into customer data will help accurately measure active demand and allow you to target the most viable prospects in the market. Leverage every engagement insight you collect, including email conversations, CRM data, and website visits. Combine these insights with third-party intent data to get a more robust understanding of your target prospects.
4. Reevaluate Primary Targets
Odds are you have prospects on your target list that were severely affected by the crisis. Companies in travel, retail, and nonprofits are just some examples of those faced with a substantial drop in revenue. Smaller companies are also more likely to be reducing budgets and will be impacted greater than large organizations. If your pipeline consists of companies like these it is time to consider alternatives.
As some industries struggle, others flourish during this situation. Consider e-learning, contactless technology, and remote working tools. Many companies in these fields have experienced an unexpected windfall and are actively seeking ways to expand even further.
Strategies and resources must shift to match changing perspectives. Businesses must take bold action and provide enhanced value to their buyers. Doing so will support both parties and begin to turn the wheel of recovery.
For nearly 30 years, Dan Freeman has used his deep expertise in business, technology, and sales processes to help businesses succeed. As a founding member of INFUSEmedia and its chief revenue officer, he has overseen the company’s growth from startup to a global organization of over 400 employees with six offices on two continents.