Navigating The Current Crisis - The Great Restart (Vol. 5)
Sales challenges and opportunities
- Navigate the current crisis with resolve and resilience
- Plan for the recovery
- Reimagine the next normal
- Target growth. While companies are generally reducing spend, a sizable number are increasing or maintaining it, with rates depending on company size, sector, and—more than any other factor—location in the world.
- Digital interaction. Looking forward, B2B companies see digital interactions as two to three times more important to their customers than traditional sales interactions.
- Remote selling. Almost 90 percent of sales have moved to a videoconferencing/phone/web sales model, and while some skepticism remains, more than half believe this is equally or more effective than sales models used before COVID-19.
Don’t let the Coronavirus Economy flatten your sales abilities. Stay confident in your vision and be on the offensive in how the pandemic affects your business (and your clients’ business).
One thing is certain: people everywhere have taken for granted the ability to meet face-to-face with others. Social distancing has quickly reminded us that, as a highly social species, humans crave the sight and sound of other humans.
Why else would video conferencing apps have experienced a record-breaking week for downloads from March 14th to 21st when “safer from home,” non-essential business closures, and other such social-distancing policies became the norm in the Coronavirus economy?
At first, it may seem hard to differentiate yourself and your organization in an all-virtual sales environment. You are no doubt using traditional email to reach out to individual prospects. Often though, these emails look about the same and they’re highly susceptible to falling short on personality. Voicemails add a layer of personality but they too, lack access to a universal language: the emotion seen in a human face. – Leslie
Business Challenges and Opportunities
CASH FLOW REALITY
It’s understandable to feel that it’s unfair of customers to ask for extended terms when they know that you’re not a bank and that times are tough for you as well. But this is an extraordinary time during which everyone is under cash pressure due to declining profits and a general deceleration of payments. Thus, there is a serious concern about the long-term loss of business because customers moving away to competitors who help them and then staying there after this is over.
Of course, you are worried about the possibility of ultimate non-payment. Extended terms should be given to financially stronger customers who do, however, have cash flow issues as well as an incentive to conserve their own working capital. In making this decision, you should consider the impact of non-payment on your firm which is not the amount of the invoice but just the out-of-pocket cost of producing the work, usually about 60% of the invoice. On the other hand, if future orders are not received, the impact is the forgone overhead contribution to overhead from them or about 40% of the quote. Balancing these two numbers would suggest that a crossover is reached at about two missed orders of roughly equal size to the one that wasn’t paid for.
While you want to treat your suppliers fairly. for most printers, the largest dollar amount is that owed to paper merchants and mills. These are large firms that traditionally have been a source of working capital for printers, not, we suspect because of their generous nature but because of the reality that paper machines run 24/7 and are messy to turn off and on. Thus, the product must go somewhere and better in the printer’s warehouse than the mill’s.
The bottom line in this is that we’re all in this together—we’ll get through it if we work with our customers and suppliers with all of us trying to accommodate the “new normal” that we’re living through. – Bob