Let's first start with what gap selling can do and can't do. What it can't do is increase the number of high potential customers for your product or service. But what it can do is to ensure that your high potential customers will try their best to allocate a budget for your product or service, even in a recession.
During a recession the costs of change are even higher for your customers than usual. Recessions are marked by an increase in buyer uncertainty and risk aversion. To overcome those you need to work hard on two of the core elements of gap selling:
Identifying and showing a clear, quantifiable impact
Pro-actively addressing and/or reducing costs of change
Identifying quantifiable impact is even more important in a recession
During economical growth periods you might get away by just promoting your product's shiny benefits or your company's reputation, but during a recession customer's need a strong reason to buy your product - a gap your product helps them close, which has a clearly identifiable impact on their business.
During a recession all of your customers are focussed on their bottom line. You need to show how your product or service helps them improve their bottom line. And no, this doesn't mean only cost reduction gaps work during a recession. You can still address volume growth or upselling gaps - but yes, the burden of proof for your ability to close those gaps for your customers becomes higher.
Be prepared that your gap becomes smaller as customers plan with lower volumes, but that does not automatically mean that you have to lower the price for your product!
Never forget, during a recession even small improvements to your customer's bottom line become comparatively more valuable due to the fact that customer's see less opportunities to improve their bottom line.
So before you drop your price, you might want to focus on addressing costs of change and ensuring that you have a strong sales process to secure your sales.
Addressing costs of change is crucial in a recession
As we said before, recessions are marked by significant uncertainty for buyers. Their financial outlook feels significantly more uncertain and their risk scenarios most likely include down-sizing. This is the worst period for investments with a long amortisation cycle or a recurring fixed cost.
You can address these issues by increasing the flexibility in your offer. Whether it is looking into more flexible or usage based payment schemes, developing rental options or flexible user agreements, anything that reduces the risk for your customer in this situation will help you closing sales during a recession.
Addressing customer fears with flexibility is not only financially more beneficial than offering "recession discounts", it is also significantly more impactful.
Recessions tend to increase the number of decision stakeholder
One aspect to be prepared for is that during a recession, because of the tighter budgets and the perceived increase in uncertainty, the number of people involved in purchasing decisions tends to increase.
It's easy to see why - even if it isn't a top down requirement to increase spending controls, buyers tend to be more risk averse during a recession and prefer to protect themselves by spreading responsibility for decisions with potentially negative financial impact among more people.
Therefore you should be prepared that you have to conduct a higher number of micro sales than you normally do during a sales cycle. At the same time, management at your customer is likely to be busier and more stressed than usual.
So you need to focus even more on creating small, easy-to-make "yes" decisions which drive your sales process forward through your customer's organisation.
Are your offerings and sales processes recession ready?
Recessions are a difficult time for every sales organisation, but with the right tools and processes you can get through this time without significant setbacks.
If you want to have an outside view on your readiness or in case you feel you need help to get ready for the challenge, feel free to contact me for a free initial consultation (reduced costs of change) to see whether I can help you.
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