Despite these shared circumstances, some businesses will fail while others survive. Moreover, some will even go on to thrive. We know this because research from the Boston Consulting Group shows that “in the last four downturns, an average of 14% of companies increased both their sales growth rate and EBITDA margin despite the challenging circumstances.”
This dynamic brings an important question to the forefront: if the core challenges of today are shared, then why will outcomes be different across businesses? The answer is leadership.
The value of effective sales leadership is never more apparent than during a time of crisis. Unfortunately, leadership is often one of the first aspects of a business to falter as the focus narrows to only financial considerations.
However, strong leadership is exactly what is needed to address intensified financial challenges because effective leaders drive employee engagement, which, in turn, drives profitability. Research from Gallup shows that businesses in the top quartile of employee engagement enjoy 12% higher profitability than business units in the bottom quartile. Measures like productivity and customer advocacy are 18% and 12% higher respectively in those same top quartile businesses.
Sales Leadership Best Practises for Navigating Turbulent Times
Strong sales leadership is important in good times but even more critical for navigating turbulent times.
Here are five key leadership actions needed to guide a selling organisation through a down market.
In a time of crisis, leaders need to deliver two or even three times the communication they offer in normal circumstances. This heightened communication should ideally occur across a variety of formats, ranging from all hands meetings to small team huddles to one-on-one meetings.
In addition to increased frequency, communications must also be overtly transparent. A crisis is often about facing uncomfortable truths. Avoiding these realities risks unwarranted optimism or, worse yet, a void in trust between staff and leadership. To overcome challenges, leaders and their teams need to determine and communicate an accurate assessment of the difficulties ahead.
The urge to bypass such conversations could be thought of as a “fight or flight” response in which the initial reaction is to flee or hunker down. However, long term success demands that leaders engage these threatening challenges and work through problems. The decision to confront problems is crucial to survival because in a time of crisis, the scale and nature of problems changes. Leaders must constantly reassess the conditions to ensure that their response is right-sized and relevant to the most pressing issues. Leaders can get this important information by asking their customers, peers, managers, and individual contributors about the difficulties they are experiencing.
Planning becomes incredibly difficult in a volatile business environment. Increased communication at the team and individual levels is the most effective way for leaders to get to the front lines of the business where they will have the most complete and clear view of the terrain ahead.
Reset and Clarify Expectations
Measures of success have changed, and many leaders continue to revise and iterate on their original 2020 goals. In order to reset and clarify expectations, leaders must articulate these changes to their teams. They must clarify both short-term and full-year objectives. Sales professionals need to understand how objectives have changed and what is expected of them.
While clarified expectations are important many fail to see the financial benefits that come from clarified expectations. In a published body of research titled The Cost of Poor Communications, researcher David Grossman reported that a survey of 400 companies revealed that, on average, each company lost $62.4 million due to inadequate communication.
Leaders must remember that a redefinition of expectations also includes a redefinition of a “win.” Leaders tend to focus on celebrating large wins, record-breaking quarters, and landing marquee logos. In an uncertain and beleaguered economy, the definition of success itself must be redefined for the organisation. What does success look like? What constitutes a win? Leaders must find the time to celebrate even the smallest of wins, ensuring that the behaviours that will lead the business to recovery are being reinforced. Recognition ranks high on the list of prised professional rewards for sellers and will continue to fuel sellers’ drive to succeed over the long haul. The acknowledgment of small wins reminds all other team members that it is possible to find new avenues to the sale even in a period of adversity.
Develop a Heightened EQ
A leader’s emotional intelligence, or EQ, becomes crucial to success during periods of stress. While many sales leaders have an inherently strong EQ, they must demonstrate an even stronger EQ as sales professionals face intensified challenges.
A heightened EQ means not settling for “Hanging in there!” when asking a sales professional how they are doing. Leaders need to go further. They must remember that in a difficult market, many team members will have guarded responses. Encouraging an open dialogue helps reveal the details behind selling challenges. Just as sales professionals need to ask deeper questions to understand the customer’s needs, the sales leader must do the same with their sales professionals. With these insights, the leader and the sales professional are equipped to work together to develop new strategies.
Numerous social science research studies illustrate the importance of EQ in navigating short-term upheavals and ensuring the sustainability of a business over the long term. One study, published in the Journal of Advances in Social Science-Humanities, found that there is a “very strong positive relationship between emotional intelligence and organisational culture equilibrium.” This finding is important to selling organisations because “organisational culture equilibrium” represents the balance between the interests of the organisation and the interests of the individuals within. Put simply: a strong leadership EQ creates an alignment between the business and the people.
The study concluded that “leaders with a high level of emotional intelligence are more likely to understand how they are feeling and why and more able to effectively manage their feelings.” This kind of management is critical when feelings of stress, uncertainty, and anxiety play an outsised role in decision making.
Intensify Client Retention Efforts
Leaders need to get creative in their strategies to retain customers. In a slowing economy, budgets often centralise and move upward. That is, the number of people authorised to make a spending decision shrinks and belongs to those higher on the corporate ladder. As a result, spending decisions made prior to a downturn are often reversed and sales professionals find themselves trying to preserve relationships and deals that were once assured.
Preserving those relationships means overcoming objections. To do so, sales professionals must first acknowledge the customer’s objection. This is a chance for the sales professional to demonstrate their empathy and engage in active listening. Next, the sales professional should ask questions that go below the surface and reveal the underlying reasons for the customer’s decision to abandon a purchase or pause a service. Questions serve both parties because the sales professional gains the details needed to overcome the objection and the customer has an opportunity to clarify their needs.
Finally, with the answers to these questions, the sales professional is equipped to begin positioning a solution that accounts for the customer’s new circumstances. Here, it is important for the sales professional to seek feedback from the customer to ensure that the new solution addresses the customer’s challenges.
This structured approach to overcoming objections works because it prioritises listening. This key element is critical to success because it is customer-centric. Though objections differ across customers, the above steps provide a framework that can be used to address any issue.
Create Cross-Functional Alignment with Uniform Skill Development
Leaders need to ensure everyone is working from the same playbook. Without cross-functional alignment, leaders risk an unbalanced approach to selling in which some sales professionals may choose to offer price concessions, or others may attempt to sell solutions that cannot be adequately delivered.
Aligning teams means providing the coaching, insights, and sales training that equips everyone to deliver the strong ROI message customers need to move forward with a purchase. Every sales professional must articulate how the solution translates into quantitative measures of success. However, without each team member doing so the same way, it becomes difficult for leaders to adjust the approach at scale. Therefore, training becomes critical in a time of economic difficulty when the likelihood of disparate selling practises is at its highest.
Leaders must remember that the global pandemic is unprecedented, and even the most tenured sales professionals have not experienced the complex nature of this event. New skills are needed. As teams participate in training, they develop a shared language and can work together more cohesively. This uniformity is even more important as more selling conversations occur in a virtual setting. In our most recent survey, we learned that 47% of sales professionals believe that engagements will increase as virtual selling normalises.
Leadership is becoming the deciding factor in the ability of a business to navigate a changed environment. As the difficulties of today’s circumstances become shared, effective businesses are discovering that strong leadership is among the last remaining differentiators.