• Michael Hudson

Are You Ready For A Downswing?

10 Techniques to Manage Through a Recession for Your Business

A recession is approaching, and that’s a fact. Expansions/Recessions are cyclical and typically occur every nine years, which means one is overdue based on historical precedent.

When times are good, many businesses get complacent and don’t plan for unfavorable business conditions. Prudent businesspeople expect, plan, and manage for adverse business conditions. Sales and marketing functions are not an exception.

When things start to tighten up, what can sales and marketing do to reduce unnecessary spending and maximize your pipeline development? The founders of Contact Persona have worked through four major recessionary cycles and present you 10 pieces of advice:

  1. Prioritize: Don’t skimp on business development and customer service. If you have to cut resources, cut everything you can before cutting your outbound business development and support for your existing customers. Your sales team will be the first line of defense maintaining revenue flow.

  2. Invest More in Biz Dev: Increase your investment in business development and funnel building, even if you have to pull the money from somewhere else. In good years, you need a funnel of 3.5 times your revenue target. As things tighten up, it would be prudent to increase that ratio to 4.5-5.0 to make sure enough early-stage opportunities are coming into the funnel to maintain your revenue targets.

  3. Review Channels: Evaluate your business development tactics (web, social, outbound email, phone prospecting, channels, trade shows) and determine the customer acquisition cost and conversion rates for each channel. Reduce investments in the lower productivity methods and focus your funds and efforts on the higher productivity channels.

  1. Nurture: Don’t neglect dormant customers. Even if existing customers reduce their spend because of their own recession mitigation, stay in regular touch. Let them know you understand their situation and will be there for them regardless. Customers won’t forget that when things loosen up again.

  2. Productivity: Once you have refocused your business development efforts on your most productive channels it is time to make them as efficient as possible. Examples of a few of the things you can do:

  • Bad Data: Do you have a lot of dead or stale data in your prospect list? – are your outbound prospectors wasting time calling into wrong numbers and getting bounces back from their outbound emails? More than likely the root cause is poor data and it is time to clean/refresh it. Read this article for more details.

  • Everybody sells: You staff probably includes experienced people with wide personal networks. Encourage them to reach out and advocate on the company’s behalf to their professional networks. You may find some low hanging fruit to help fill that larger funnel.

  • Named Accounts: Are you using Named Account Lists? Do you have all the prospects captured that your reps can call into at each account based on the ideal client profile (ICP)? If you don’t you may be missing out on significant opportunities right in front of you. Check out this article for more info

  1. Be Decisive: Don’t get sentimental about making the hard decisions. Failure to act, especially when you could anticipate and mitigate the danger, could cost you your business. It’s human nature to avoid tough or painful decisions but not cutting costs and adapting your business promptly could make it worse as the recession really begins to bite and you have less options.

  2. Incentives: Consider using special incentives and prizes to build motivation and excitement among the sales and marketing team. Negative incentives (e.g. “if you don’t close more business we will go under”) doesn’t work. The sales executives will assume the company is in trouble and will jump ship and make your pipeline situation worse.

  3. Communicate regularly with your teams: A vacuum of information from management will be filled with fear and negative assumptions. This will cause staff to leave and replacing them will be time consuming and expensive when you can least afford the time and disruption. Celebrate significant sales wins so the team knows you are still closing deals during the recession.

  1. Lead by example: You can’t expect the staff to tighten their belts and work harder during a downturn while you are flying first class and showing up at the office in a new Porsche. Your staff won’t walk on water for you when they see you passing them by in a speedboat!

  2. Challenge Assumptions: Put your ego aside, take a step back and evaluate your current business model with a trusted group of employees. You may be missing something that will help you manage through the recession or possibly even take advantage of it.


Most important of all, when faced with a recession don’t panic! – Like people who buy high and then sell low in a panic during a market downturn, acting hastily and reactively could cause more harm than good to your business and finances in the long run. Do the following before the downturn starts to show up in your revenue stream:

  • Review all non-essential expenses and preserve cash

  • Defer large purchases unless the business absolutely needs it

  • Evaluate all your vendors and look for less expensive options or alternative vendors

  • Make sure your staff understand that the company is in cost-control mode for a period of time and set clear expectations and assure them it won’t be forever.

  • Move more client meetings to virtual to reduce travel costs unless going virtual will put a deal at risk

  • If you have to trim your payroll, start outside Sales & Marketing to minimize impact on funnel building

  • Regularly communicate with your staff, a vacuum of information will be filled with fear and negative assumptions


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