Though the United States is not currently in a recession, it may be on the horizon. A recent Financial Times survey asked 49 U.S. macroeconomists if we were headed for a recession, and more than two-thirds predicted a recession may hit in 2023. In a recession, sales teams may feel inclined to panic. Recession sales can be difficult as consumers and businesses tighten up budgets. However, a well-informed and prepared sales team can adapt to a shifting economy.
We’ll explore the conditions of a potential recession and how to increase sales during recessionary times.
Understand what a recession means
First off, sales teams should understand what a recession means. While some believe a recession is defined by two consecutive quarters of falling real GDP, the White House states it may be more complicated. Economists must take a holistic look at incomes, production, the labor market, and consumer and business spending. It sites the National Bureau of Economic Research (NBER), which says a recession is “a significant decline in economic activity that is spread across the economy and that lasts more than a few months.”
For sales teams wondering how to increase sales during a recession, there are a few things to note. First, the NBER’s Business Cycle Dating Committee will not define a recession until after it has occurred because it needs sufficient data. Secondly, most recessions are brief, according to the committee. Expansion is the natural state of the economy.
This does not mean recession sales will be easy, but it does give reassurance that the economy—historically—has always bounced back.
Predict the impact on recession sales
It’s natural that salespeople will wonder how to increase sales during a recession. Businesses will typically cut new investments and reduce spending. When your job is selling, this can cause stress.
In 2009 during a major economic downturn, The Harvard Business Review recommended marketers and salespeople to stop thinking about selling to “demographics” or “lifestyles” (like “men under 40” or “environmentally-conscious consumer”) and instead think in terms of psychological segmentation. Those who are the hardest hit financially may cease all non-essential spending. Some may be optimistic over the long term. Some groups may carry on and live day to day. Understanding your customers’ outlook will help you know how and when to sell.
Also, consider if your product is considered a “value” or “essential.” Certain brands may see an increase in recession sales as consumers prioritize needs. Other companies may need to consider how to increase sales during a recession with new strategies.
Make a recession sales strategy
So, how to increase sales during a recession when you’re in a hard-hit industry?
Focus on your loyal customers. You may be able to upsell those who already know the value of your product. Personalization is everything, and using a platform like Covideo to express gratitude to your current customers can go a long way. Offer discounts, develop payment plans, and emphasize value.
Second, identify where new prospects may fall on a psychological segment. Home in your sales strategy on those who have capacity to buy. But for everyone, show compassion. A recession impacts all parts of the economy, so we can all feel its effects. This is another great opportunity to use video to connect with your prospects and show your humanity in tough times.
Finally, look to the future. You can’t always plan for how to increase sales during a recession, but you can bet that expansion will return. Get a sense of your consumers’ timeline, and consider how your solution may save consumers money down the line. If you can communicate the value, your sales will improve.
Economic downturns are not an easy time to work in sales, but with a solid strategy and an understanding of consumer’s needs, you can weather difficult times alongside your consumers. Personalize your outreach and humanize your connections with Covideo. As you consider how to increase sales during a recession, talk to us about creating a more impactful sales strategy with video.