Addressing the "Bad Economy" Objection

Sharpening your messaging and approach

business owner stressed about the economy

Concerns about the Economy

Unless you haven't been paying attention, most owners have heard that the economy is slowing down and that we are all headed for a possible recession. This has led many of your potential customers to put off buying decisions. "Putting things on the back burner” is a natural reaction. Owners don’t like risk and will avoid it if they feel it could impact their cash flow. This shift in the market necessitates a sharpening of your sales approach.

The Owner’s Perspective

Less effective salespeople just talk about their products or services and how awesome they are. If that's the approach, then the owner is only going to think “additional expense” and “I can’t afford to do that in this economy.” The best salespeople know how to speak to owners/executives in a language they understand. The truth is, Owners and CEOs often don’t really care about what your product or service is, how it works, or the features. What they really care about is how your solution will benefit their company, their bottom line, and their cash flow. If you are not using that language, you're missing the boat. 

Put Your Owner’s Hat On

If you are the owner of a business and see a slowdown coming in your revenue (and therefore profit and cash flow), you're probably going to be hesitant to spend any money. Many owners may have bad memories of finding themselves in a cash crunch. It was probably extremely uncomfortable and forced them to have difficult conversations. They don’t want to repeat that. If you are a seller, that's a big uphill climb to get over. Just remember, owners are business people. If you can show them how your product or service can help them improve their business without adding risk, then the chances of them buying go way up.

Let’s look a bit deeper. Think about why somebody buys your solution in the first place. It is not because they like the cool product or service. It usually boils down to one of these 6 concerns for owners:

  1. Will it save me money/reduce expenses which will make me more profitable? 
    They want your solution if…
    • They see your product as making them more efficient
    • They can get things done faster 
    • Your solution makes them less labor intensive
  2. Can it make me more money?
    They want your solution if…
    • It provides them with more capabilities which gives them a reason to charge their customers more
    • It provides a new revenue stream for them
  3. Can it speed up my time to market?
    They want your solution if…
    • It allows them to get their own products to market faster.  This could give them a competitive advantage which drives revenue and profitability.
    • It can help them execute their strategy faster.  Owners typically have a strategy and plan for growth.  If you can help them get to that growth faster, you win.
  4. Can it reduce risk?
    They want your solution if…
    • It brings them into compliance with some regulations and without that compliance, they could face fines.
    • It allows them to balance inventory – if you can deliver products on short notice, then less of their cash flow is tied up, which reduces risk. 
    • All of their eggs are not in one basket.  Remember when people couldn’t get products during Covid? Many have expanded their number of suppliers so that doesn’t happen again.  You could be a safety net for them.
  5. Will it give them a competitive advantage?
    They want your solution if…
    • Your solution gives them something their competition doesn’t have.  That allows them to either a) charge more for their product, b) win a greater percentage of deals, or c) both.
  6. Will it provide them with better data to make decisions?
    They want your solution if…
    • Your solution gives them better insights to make better decisions.  Owners have to make hard decisions every day in an effort to maximize profits.  If you can show them how your solution helps their decision-making process, your chances of winning improve.  

Your solutions most likely will not hit all of these categories, but there are probably one or two that are very relevant to what you are selling. Determine what the business impact is of your solution and adapt your selling approach to emphasize that.

Get the elephant on the table

Some salespeople don’t want to have the business discussion outlined above for fear that it could sour the deal. “I don’t want to talk about a possible recession. That could spook them.” Guess what? They already know. I say, bring that conversation front and center. This is the topic they really care about. Think about asking questions like:

  • What is your outlook on the economy?
  • How will this affect you and your company?
  • What is your biggest concern?  (could be cash, inventory, reduction in revenue, etc)
  • What are you doing to prepare for this?  (they may be thinking about cutting in some areas, de-emphasizing focus, reprioritizing, etc)

These types of questions will give you great insights as to how to sell to them.

A Real-life example

When the Covid pandemic hit in 2020, the first thing that owners did was pull back on spending in a big way. There were all kinds of uncertainty about the economy and cash flow, so owners were reducing expenses like crazy. Where did they cut? One area was marketing. One of our marketing clients anticipated this and became very sharp with their messaging. They adapted their approach to focus more on business and less on SEO, PPC, Google Ads, etc. Those marketing tactics were simply vehicles to get the business results that owners wanted.

Our client recognized the fact that most owners were cutting marketing expenses. This would create a void in the market, which their customers could take advantage of. They positioned to their customer that if all their competitors pull back marketing expenses, and they double down, they could take advantage. They told their customer that they could get a lot more advertising for a cheaper cost. Since demand for marketing was down, the price to buy advertising, keywords, etc had also gone down. They explained how their customer could dominate all advertising and be listed first in all areas at a much lower price than normal market conditions would allow. After all, people still need the services they provided and they could show up first when people searched for them.

Owners understood this approach and it appealed to their business sense. They saw the market opportunity and positive ROI that doubling down could bring. Yes, there was some risk, but they took advantage. During a time in the economy when companies were cutting marketing expenses left and right, this particular marketing company actually grew. Keep in mind, this had way less to do with the services or why our client was different. It was a strategic business discussion that led to more sales.

Get to the Right Person

Everything I've talked about so far is predicated on having a discussion with an Owner, CEO, or high-level executive. If a salesperson tried to have this discussion at a middle-manager level or with procurement, their success rate will most likely be terrible. The people at these levels often are just executing on direction from above, not making strategic decisions. The best salespeople will figure out how to work their way up the chain to someone who has P&L responsibility. Some of that starts with developing relationships higher up in the organization from the beginning. If you're not there yet, you need to ask for meetings at a higher level. Show the person you're talking to the WIFFM (What’s in it for them). The WIIFM in this case is that they can look really good to their bosses for thinking about the company's P&L and bringing this strategic discussion to the forefront.

Our economy may or may not be coming into a recession. Nobody can predict that with 100% certainty. But salespeople need to learn to have business discussions vs. product or service discussions if they are going to continue to be successful in selling their solutions

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