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International trade wars.
With international trade wars and geopolitical crises raging on multiple fronts, the global economy is experiencing its worst performance since the financial crisis. Indeed, just this October, respected commentators and analysts from the IMF and World Trade Organization to the ratings agency, Moody’s have all warned of the slowing pace of global economic growth.
No business is immune from the recession, but as we enter what promises to be an uncertain new decade, this backdrop is presenting a particularly serious challenge for large companies, who typically have equally sizeable and ambitious sales targets to match.
Paul Black, CEO of leading sales enablement software provider, sales-i, outlines the main challenges facing multinationals looking to preserve market share in challenging trading conditions and key strategies for doing better business when the going gets tougher.
The great global downturn of 2008 caught many businesses unaware, hitting hard and hitting fast. In the aftermath, hundreds of thousands of businesses worldwide were forced to cease trading, with many more significantly reducing investment and effectively treading water for years to follow. Whether 2020 heralds a continued slowdown in global business activity or something more challenging, this time around, firms won’t be able to say they weren’t given fair warning.
Of course, it’s not all doom and gloom out there. In some sectors, there are real bright spots on the horizon. The buoyant automotive aftermarket for example, is set to grow substantially by the end of the next decade, as are the sustainable energy and technology sectors. But as anyone operating in the construction supply chain will attest, serious market challenges are already in play right now.
As so many businesses in the wake of the so-called Great Depression found out to their cost, dealing with a downturn is as much about effective planning as adapting to new trading conditions. Ultimately, far too many firms were forced onto a reactive footing in 2008 when some proactive measures in advance would have gone a long way to mitigating the negative impacts that were felt by so many for so long.
As the lifeblood of any thriving business, sales teams very often bear the brunt in a downturn. Jobs can be shed, teams can be consolidated and investment cut back. Yet multiple studies still point towards great inefficiencies in the way many businesses approach sales, with staff routinely spending as little as a third of their time actually selling. Such productivity is undesirable in any economic climate, but in a downturn, it can be business critical.
Thankfully, a range of technology solutions has dramatically changed the sales management landscape since the last downturn, enabling directors to hone their sales processes to ensure every commercial conversation counts and is informed by up to the minute data.
Bridging the gap between sales staff and data is particularly imperative in those large businesses that serve big client portfolios with vast product offerings, such as manufacturing, distribution, and warehousing. These industries are typically highly rich in data and the means to capture it but face ongoing challenges in both refining and meaningfully interpreting it to inform commercial decision-making.
Jody Markopoulos, previously CEO of General Electric Intelligent Platforms, summarizes the challenge, succinctly:
“Industrial enterprises stand to gain from Big Data only if they have the capabilities to make that data accessible and understandable. It starts with collecting, storing and managing large volumes of historical and real-time data sets. Then, with the power of meaningful analytics, companies can turn that data into operational agility to support real-time, better-informed decisions. This type of advanced software technology puts bytes to work and turns data into a competitive differentiator.”
What’s more, the scale of large company product offerings in these spaces, which frequently run into the thousands, also means robust inventory management control is essential to drive proactive, responsive sales operations, make good purchasing decisions and minimize associated costs and wastage. What’s more, whether it’s automation, the Industrial Internet of Things (IIoT), robotics or cloud computing, keeping up to date with the rapid pace of technological change for these businesses is a challenge in itself.
According to Michael Lovelace of business management software provider, Epicor:
“Distributors need business systems that keep their businesses healthy and thriving in the face of change – solutions that empower them to grow and adapt into the future – and many find their old ERP software won’t deliver the capabilities they need as they continue to evolve.”
We strive at sales-i, to provide simple, effective, yet highly compelling sales analytics for busy salespeople handling multiple client portfolios across a wide range of industries from engineering and construction to automotive and electronics, essentially giving them complete visibility of each and every customer relationship at their fingertips.
The benefits are threefold; improved sales visibility by mixing transactional and customer data to help salespeople fully understand their customers’ buying habits, simplified back-office data analysis, enabling clear, straightforward buying instructions and the opportunity to protect and indeed grow market share by providing real-time metrics on where customer sales are falling and other opportunities arising.
The results are hugely compelling – for both the productivity of sales teams and the company bottom line. In our work with wholesale distribution and manufacturing sales teams who struggle to obtain timely and contextual sales data from their ERP and CRM systems, we have been able to help them achieve on average a 22% increase in invoice value and a 10% overall increase in spending customers, quite apart from significantly streamlining and rationalizing their overall sales operation, partly driven by increased adoption of sales technology designed for sales audiences.
Patently, very few manufacturing, warehousing or distribution businesses would actively welcome an economic slowdown, but it is worth remembering that for many larger firms, recessions actually represent a major opportunity, be it to require top talent newly onto the jobs market or to take advantage of a competitor’s failure. Those firms whose sales operations are fully optimized always stand best placed to capitalize on such scenarios.
Of course, predicting when a recession might strike is notoriously difficult. Whatever course the global economy takes in the new decade, one certainty is that large firms across multiple industries will have to work harder than ever to remain competitive and retain market share.
By preparing for challenging times in advance and ensuring they have the most efficient and effective sales processes in place, businesses can put themselves in a strong position to not only survive but actively thrive for the longer term.