economic-uncertainty-plain

How to Prepare Your Business for Economic Uncertainty

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Since the global economic collapse in 2008, the U.S. economy has consistently improved, making it relatively easy for businesses to make sales and close deals.

However, there are signs things could be changing:

  • Financial markets are more volatile.
  • Experts believe a recession could be just around the corner.
  • Interest rates for borrowers are going up.
  • Tariffs could impact product availability and pricing.
  • Many people are feeling less confident about their jobs and salaries and their ability to make purchases.

It’s never too soon for your marketing, sales and sales enablement teams to plan for changes that could impact your sales and revenue. Anyone who remembers the last economic downturn knows it’s better to be prepared rather than wait until it’s too late.

Here are some of the top economic trends that could impact your business in the years ahead along with ideas on how to plan for them.

Reduced demand for your products or services.

The Problem

Supply and demand are the biggest factors that impact sales and your ability to earn revenue. They are at the very core of the society we live in and the economy that sustains it.

One thing most marketers have not been focused on over the last few years is creating artificial demand for their products and services. Instead, they’ve spent more of their time and budgets on brand-building and awareness.

That’s because, during flush times, consumers — both individual and business — feel confident about buying things and generally don’t need to be encouraged to spend money. This causes prices to go up organically, with little or no need to artificially increase demand to do so. These are the conditions marketers and salespeople have lived with over the last decade.

Entering into a less stable period may leave businesses and individual consumers less willing to part with their cash. That means you may not be able to depend on steadily increasing demand in the years ahead like you have in the past decade.

In more challenging economic climates, when demand is low, prices — and profits — typically fall. And when there is a limited supply of materials, either due to tariffs or manufacturing issues, demand increases due to the lack of supply, which causes prices to go up. Despite this, profit margins are usually reduced because of higher material and manufacturing costs.

The Fix

Marketing, sales and sales enablement typically step in when supply and demand go out of whack. Here are some things they can do to keep sales and profits stable in uncertain times:

  • Marketing updates messaging so it focuses on generating greater demand for your products and services or positions them at a premium level so you can charge more and continue to earn reasonable profits on each sale.
  • Sales reps adjust how they sell so the product/service they offer remains competitive in a tougher sales environment.
  • A sales enablement system provides data so you can identify opportunities in an evolving economy. It should also be used to distribute updated sales support materials for reps to use with clients and supply training on how to sell in challenging times.

Consumer confidence changes purchasing habits.

The Problem

Both businesses and individual consumers are less likely to buy things when they don’t feel confident about the economy or their finances.

Part of this is rational: If you have less cash, you can’t keep spending in the same way as when you have more — or you need to borrow to do so.

Part of it is emotional: If you’re not sure about what’s next, you feel more anxious about making financial commitments you may not be able to keep.

The Fix

When consumer confidence is low, sales and marketing should work together to find ways to take a more emotional approach to engage with buyers. The right messages and tactics can help overcome fear and give buyers the confidence they need to spend money on your products and services.

At the same time, sales enablement tracks the effectiveness of this more emotional approach to selling with different consumer segments. This allows you to identify winning messages and tactics, so they can be replicated and optimized over time.

A recession forces budget cuts.

The Problem

Historically, economic recessions impact everyone, including large corporations, small businesses and individual consumers. Businesses generally cut costs so they stay profitable through recessions. They typically do this by laying off staff and reducing spending on marketing, research and product development.

Consumers may have less money to spend and are concerned about their uncertain financial futures. They react by cutting back on discretionary purchases. This includes buying big things like cars or vacations or small ones like candy or soda at the checkout counter.

The Fix

Marketing and sales face additional challenges during recessions. In addition to the things they do during other negative economic cycles, they’re often forced to address some of the other fallout that results from a recession. Marketers may need to develop messages related to layoffs at your company to appease buyers that have concerns about the impact they could have on their local communities.

In addition, salespeople must be prepared to sell in a challenging environment while fielding new types of questions from buyers. A sales enablement system, like the one offered by Mobile Locker, should be deployed during a recession as a rapid response tool, delivering sales content and education that responds to current events in real time. This makes a big difference when it comes to your business surviving or thriving during a tough recession or becoming a victim of it.

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