Every business needs a plan for dealing with a global financial crisis. Whether it’s a large-scale economic downturn or a global crisis like COVID-19, the more widespread the disaster the greater the impact on your company and sales team will be.
If you’ve yet to create such a plan, don’t worry. We’re here to walk you through everything you should be doing to survive a global financial crisis so you and your team can emerge stronger and ready for anything.
- What you should do right away
- What you should do within a month
- What you should do within three months
- What you should do in the long-term
- What you should do to prepare for the next financial crisis
Here are the steps you should take to manage your sales business and team through a crisis, with three action points or examples to learn from in each.
What you should do right away
As soon as a global crisis rears its ugly head, your first priority should be your business relationships. How you interact with your customers, suppliers, employees and investors in the short term will set the stage for how well your business recovers once the financial instability subsides.
Reassure and protect your employees
Managing your team through a crisis is your chance to level up as a leader.
The people who work with and for you may be worried about their jobs, their health and their families. So the first thing you should do is remain transparent in your communications and update them regularly about:
- How the crisis is affecting your business
- What your specific plans are for dealing with it
- How those plans may affect the way they work
Be prepared to offer your employees flexible work schedules and remote communication arrangements. Consider introducing company-wide policies to give employees clarity and direction, such as a WFH (work from home) policy.
It’s also a good time to consider cutting costs and protecting your existing sales staff by implementing a hiring freeze.
Stay in contact with customers and suppliers
Coming through a global crisis together can strengthen the trust and loyalty you’ve built up with customers and suppliers.
To reassure them your business will remain steady, start by contacting them directly about the status of their orders, shipments, inventory and payments. Post regular updates at your place of business, on your website, over email, on your community pages and on your social media platforms about:
- The steps you’re taking to keep your business running
- Any changes to your hours of operation, customer care or receiving
- What you may be doing to help the community at large
If you sell online, this is a great time to remind customers they can still find what they need on your website even if they can’t shop in person. Offer discounts or free shipping to keep clients happy and sales coming in.
Communicate with shareholders and investors
It’s especially important to stay in touch with shareholders and investors during a financial setback. They’ll want to know their investment is secure, and that you’re taking every precaution to keep it that way.
You should try to meet in person with shareholders, but at the very least take the time to craft and deliver a detailed memo that:
- Reminds investors how well your business has performed
- Shares real-life examples of crises you or similar companies have overcome in the past
- Explains the risk management or business continuation steps your team is taking to keep things on track (more on this later)
Remember to stay positive, stick to the facts and provide data where possible.
Set up your CRM dashboard to monitor company health
Make sure your CRM dashboard and other tools are set up to keep an eye on the health of your business. Doing so will allow you to use your platform to coordinate, analyze and act on data from your sales, marketing and customer success teams as events continue to unfold.
Besides making it easy to monitor performance metrics like sales revenue, average deal value and MRR (monthly recurring revenue), the right CRM system will help you:
- Create more accurate sales forecasts
- Reduce manual data entry when working with a skeleton staff
- Adapt your sales processes to keep them as responsive as possible
What to do when B2B deals are postponed or canceled
Some B2B deals will inevitably fall through the cracks when a crisis hits. The best thing to do is encourage your team to view postponed or canceled deals as a chance to refine their sales skills.
A little sales housekeeping never hurts either. So consider having your reps clean out their pipelines by:
- Renewing contact with recent prospects
- Reconnecting with lost leads
- Reacquainting themselves with the ideal customer profile
Get your sales team to reexamine who they sell to most successfully in terms of need/solution fit so they can refocus their efforts and start adapting their approach to closing new deals.
How to respond to dropping sales and changing consumer behavior
When a financial crisis hits, sales dips and changes in buying habits are common. Don’t panic. Instead, start looking for ways your business can adapt to the fact that more people may be working from home, running into financial difficulties or stockpiling certain goods.
Can you shift your sales strategy online? Make purchasing terms more favorable to customers who are struggling financially? Use sales data to stock up on in-demand products?
When brick-and-mortar businesses in China were impacted by the COVID-19 crisis, some redeployed person-to-person sales staff to online sales channels. Sales reps continued to engage prospects and customers virtually and were able to keep their sales humming with the help of:
- Messaging and social media platforms
- Video tools
- Established email lists
Even personnel who couldn’t make the digital leap were able to help keep their companies afloat in some instances by contributing to recovery planning or being contracted out to other businesses.
What you should do within a month
Even if you’ve had to implement austerity measures across your company, try to stay proactive—especially during the first weeks following a crisis.
Remember that many a successful business was built during a recession or sprang to life with little in the way of financial resources and borrowing options.
Think back to when your business or sales career was new. What steps did you take to explore new markets and sales opportunities when funds were limited and the way forward wasn’t clear?
During the COVID-19 crisis, we’ve seen examples of business innovation that included:
- Sit-down restaurants switching to partially prepared meals that people could cook at home
- Social video platforms offering online educational programs to out-of-school students
- Personal trainers taking their lessons online at a reduced rate, or for free
Perhaps your organization or sales department already has an established growth plan in place. If so, use that as a starting point to brainstorm with your team and find some creative ways to move forward.
Optimize your sales processes to make them leaner
Now’s the time to focus on getting rid of any excess weight in your sales process. In a healthy economy, you should be spending a good 50% of your time on revenue-generating activities to stimulate growth.
When you’re managing sales recovery, however, you and your team will have to work a little harder in the short term to optimize workloads and make them leaner.
Start by doing away with irrelevant or unfocused sales meetings. Then, to save time and really crank up your team’s productivity:
- Use automation to manage sales calls, streamline emails and minimize repeatable administrative tasks
- Restructure your tactics for tracking, reporting and forecasting with data so you can scale back up as quickly as possible
- Use tools to automate your lead generation and better qualify the prospects who are likely to convert, so that you can focus on them
Your CRM software should be able to help you find where there’s a need for you to adapt, or slack you can take up.
Continue monitoring your company’s health
With your CRM dashboard set up to monitor your company’s health, here are some of the key performance indicators and data trends you should be tracking.
- Financial ratios: Use ratios that measure solvency, cash flow, debt load and inventory turnover to monitor your bottom-line profit margin
- Direct spending trends: Monitor trends to see where you may be able to spread out monthly payments to make them more manageable
- Indirect overhead costs: Watch your costs to preserve your cash flow as much as possible
- Customer KPIs: Monitor indicators like customer base size, customer retention rate, number of repeat customers and average revenue per customer to see how your sales are progressing
When revenues rise, performance indicators will help you identify which sales efforts or areas were responsible so your team can refocus their work.
Monitoring changes in your target demographic as the crisis progresses, and keeping an eye on competitors and your industry as a whole, will also help you make smarter sales and financial decisions.
Ask your customers what they really want or need
It’s more important than ever to listen to your customers during a financial crisis. Not only will asking them what they want and need help you rebalance your sales offering, but it’s also the perfect fuel for launching new products and services.
Acting on customer feedback improves the buying experience (something that’s especially important during hard times) and can improve retention rates, which may help you prop up your profits.
Remind salespeople that being a good listener will help them maintain or re-establish client trust and confidence. Just make sure you’re using CRM software that lets you collect and analyze customer data so your sales team can turn it into action.
Nail your WFH policy
While all this is going on, you’ll need to hammer out a WFH policy that describes when employees need to make themselves available, the communication channels they’re expected to use (email, video chats and conferencing, messaging apps, etc.) and the deliverables they’re responsible for.
If you have salespeople who need face-to-face interaction during a health risk crisis (outside salespeople, especially) you may have to stay flexible and get creative. Consider having reps exchange in-person customer visits for communication options like:
- Chatting over instant messaging platforms (Slack, WhatsApp, Facebook Messenger)
- Video calling over visual platforms (FaceTime, Skype, Google Hangouts)
- Using presentation software like LinkedIn SlideShare
Retrain employees who are now in less essential roles to help where there is more demand from customers (during a health crisis, outside salespeople could move inside, for example).
In addition to making practical arrangements, you’ll also need to address concerns like staff morale, mental health and employee leave.
Fear can cause strong emotions. And depending on the crisis playing out, your staff may have been affected by bankruptcy, bereavement or both.
If your business has an emergency fund, use it to ease employee stress by:
- Funding company get-togethers
- Supporting paid time off
- Covering counseling costs
If you don’t, you can still support your team by:
- Setting up remote, company-wide reminder notifications to breathe, stretch or meditate while working from home
- Taking the time to check in regularly by phone or video chat
- Finding and sharing self-care resources and mental health contact information
At some point, you may find the better part of your team is off at the same time due to sick, vacation or stress leave.
To help prevent a mass absence, let your employees adjust their own work hours. To fill unavoidable gaps, meanwhile, consider taking advantage of freelancers, contractors and other temporary workers who are already set up to work remotely.
What you should do within three months
You’ll make better decisions if you take an honest look at the best-case and worst-case scenarios for how long the current crisis may last, and how it will impact your business from a sales and cash point of view.
Of course, you’ll have to expect the unexpected. But once you have some idea of the best and worst outcomes, you can form strategies around each scenario.
If your original business plan already contains a set of best-case and worst-case predictions, use these as a jumping-off point. You should also investigate the current market and your competitors’ pricing and processes to see where you stand in comparison.
Armed with that information, you can then use your sales and financial data to figure out:
- Where your business stands today,
- Whether you’re making money or burning through cash
- Your best-case and worst-case financial forecasts
Don’t forget to build some trigger dates into your sales strategies. If you haven’t reached a certain performance milestone by a certain date, for example, you should review and adjust your plan accordingly.
Perform a detailed risk assessment for every area of your business
Gather together the various analyses you’ve completed over the past few weeks and use them to perform a detailed risk assessment.
By examining your markets, sales processes, customer feedback and financial health in light of the current crisis, you can:
- Identify the most likely threats to your business (perhaps clients no longer have the budget for your product)
- Build up defenses to stay on top of those threats (maybe you can identify new sources of credit)
- Create a disaster recovery plan
Remember: moving forward without a plan to help you navigate the dangers ahead is like trying to steer a boat through unknown waters without a map.
Increase optimization and automation so you can run with a skeleton crew
Both your disaster recovery plan and your new crisis strategies should include optimizing your sales and business processes so you can work efficiently with minimal staff.
There are plenty of automation options out there to help you perform repetitive and easily replicated tasks with little to no work—from phone solutions like Caller to customer support bots like Intercom.
Make sure you examine all your processes to see where automation technology may be able to help you recover more quickly.
How to use the insights you’ve gained to develop your products and services
By now, you should have plenty of insights into whether you can reshape your products and services to meet current market needs or whether you’ll need to pivot your business completely.
It’s important to stay open and try new things during a crisis that you wouldn’t normally consider doing. You might have to experiment with a new product mix, change your product into a service or convert your service into a product.
J.L. Kraft, for example, sold cheese wholesale to local merchants before finally deciding to pivot. The result was the incredibly successful production of Kraft Foods.
Your best approach is to focus on your strengths and talk to your customers. You might just discover that some of your clients have been using your product or service features in ways you hadn’t thought of before. And that can help you branch out in an entirely new direction.
What you should do in the long-term
As events unfold globally, you should continue to work through, review and adjust your best-case and worst-case sales strategies. Once the crisis has finally run its course, you and your team can then focus on rebuilding your business.
Start by taking stock of the decisions you made during the down-turn and the impact they’ve had on every area of your business.
Examine your resources, operations, revenues and liabilities to figure out which temporary changes (emphasizing online selling channels or adopting a flexible WFH policy, for example) are worth making permanent, and which should revert back to pre-crisis norms.
Make sure you have sales and financial recovery goals in place while you go through this process. The SMART goal setting system can help you plan:
- Actions that will get your business and sales back on track
- Ways to monitor and adjust those actions as you move forward
- A realistic time frame for meeting your objectives
Roughly 40% of small businesses in the US never recover from a disaster. If you can’t resume normal sales operations inside a reasonable time frame, you may have to consider exiting your business.
How to close your business responsibly if the worst happens
Deciding to shut down a business in response to a crisis is never easy, especially if a lot of people have put a great deal of effort into keeping it running. Still, to avoid long-term consequences for everyone involved, it’s important to close your business properly.
Exit steps will vary depending on your company’s legal structure and where it operates, but they typically include:
- Conducting a shareholder vote
- Notifying creditors in writing
- Paying outstanding business taxes
- Filing articles of dissolution
- Negotiating and settling debts
- Distributing proceeds to owners and shareholders
- Closing bank accounts and canceling credit cards
- Filing final tax returns
- Canceling licenses, permits and insurance
- Storing business records
- Filing for bankruptcy when appropriate
Check government websites and seek accounting and legal guidance as you put together a checklist of everything that you’ll need to take care of.
Is that a light at the end of the tunnel?
Your business isn’t the first to walk the path toward financial recovery and it certainly won’t be the last. Still, you’re probably wondering how you’ll know when it’s safe to stop cutting costs and start spending on new marketing initiatives and sales strategies.
The healthiest way forward is to keep prioritizing risk avoidance over growth until you’re confident it’s time to scale operations.
Here are some questions that will help you decide if that time is now:
- Is your sales team running short on time or inventory to meet growing customer demand?
- Does your recovery plan forecasting data show you’re meeting or surpassing your goals?
- Has the gap between best and worst-case scenarios narrowed noticeably thanks to an expanding customer base, strong cash flow and repeatable sales?
The more times you answered ‘yes’, the more likely it is that your business really is seeing a light at the end of the tunnel. Just make sure you have the proper infrastructure in place (personnel, communications, automation and culture) to support your leap forward.
What you should do to prepare for the next financial crisis
Surviving a global financial crisis, like the one caused by COVID-19, is the ultimate business challenge— though not one that many sales managers or business owners would take on by choice. Fortunately, there are steps you can take, and plans you can make, to help protect yourself and your team from future crises.
Preparing an appropriate set of actions and reactions and keeping it up to date will ensure you’re ready to allocate human and financial resources effectively during a severe business disruption.
Here are the response plans you should create and practice carrying out with your team:
- Crisis management plan
- Risk management plan
- Emergency and disaster or business continuity plan
If you haven’t already, you should also ask your broker about business interruption insurance.
Nearly two-thirds of US businesses admit to being caught off guard by operational surprises. So whether a disaster is natural, economic or both, you’ll fare much better knowing what to do when employees can’t come to work, supplies dry up or demand for your product or service drops off.
What can you learn from the current situation?
One of the biggest lessons we can learn from the global outbreak of COVID-19 is that resilience is key during a financial crisis. Because events can happen so quickly, it’s important to keep looking ahead while you reframe your expectations and strategies.
If you look at a crisis as a problem to be solved, you’ll discover there are opportunities to reinvent your business at every level.
But there’s no hard-and-fast rule. Some of the most resilient leaders in times of crisis have:
- Slashed operating costs
- Divested heavily during the down cycle
- Acquired just as heavily during the recovery cycle
- Kept their focus on long-term solutions as much as possible
Insisting on operational and financial flexibility from everyone on your team is the only way to ride out a crisis successfully. Think of it as your chance to hit the reset button on your business by reshaping your products or services and redefining the work your team members do.
How to recognize when a crisis has begun
Some business leaders worry they won’t be able to recognize they’re caught up in a crisis until it’s too late to prevent permanent damage.
Even though defining a business crisis isn’t always black and white, there are three warning signs you can watch for:
- The problem you’ve encountered was completely unexpected
- The problem poses an imminent threat
- The problem is making it hard for you to make timely and effective decisions
Financial crises can result from internal factors (the loss of a major client or supplier, for example) or external factors (a health threat like COVID-19). But in either case, they can put the stability of your business at risk and make it difficult to stay in control.
Once you’ve decided your company really is in crisis, you should put your risk management and business continuity plans into effect.
How to train your sales team for the next crisis
Internal or external, a crisis can cause your sales team to lose customers, contracts and confidence. So it’s worth implementing a program to teach them how to react and what to do when disaster strikes.
Empowering your team with knowledge and a plan of action will give them a greater sense of control. And that will come back to you as greater resilience and more innovative thinking to help you manage the sales crisis better.
You can’t prepare your team for everything, but you can help them figure out what to prioritize and how to communicate during a crisis.
Your sales preparedness checklist should include:
- Assignment of individual roles during an emergency
- Guidance on how to allocate time and resources to minimize impact on workload, workflow and productivity
- Ensuring all sales data and information is in one place and accessible to everyone
- Opening up company communication channels that allow you to keep your team updated and enlist their help in brainstorming crisis solutions
Make sure your sales training also emphasizes how important it is for team members to ask for help and get questions answered as you ride out the crisis together.
If you don’t hear from them, make it a point to conduct regular, one-on-one pulse checks, address every setback and celebrate every small win.
Once you identify and prepare for the risks your company faces each day, your entire sales team will be in a better position to deal with a global crisis faster and with as little emotional and financial fallout as possible.