BLOG: Cutting Sales In a Challenging Time
There is no question that we have entered back into an unfriendly business environment due to the COVID- 19 virus. Many of the practices we should follow in an effort to contain the spread of this virus will impact our businesses and the economy. It is a natural and, in many cases, a correct reaction to look at our P&L’s and see where we might be able to make cuts to protect our profit.
However, one cut that may seem logical can have significant longer term negative impacts that may actually cost us more than it saves – and that cut is one of our internal production people.
Undeniably, the biggest line item in our day to day expenses is that of the “S” of SG&A. The “S” portion of our expenses covers the salaries, bonuses, commissions, and various benefits that we provide to our internal production people. It is generally the largest expense we incur and therefore the most logical to trim in an effort to protect profit. Simply trimming the lowest producers can provide an immediate relief and help keep our businesses in the black. But the restrictions associated with this unique situation will be short-lived. Once the imminent threat has subsided and business begins to rebound, having cut production people will put us behind as we will have lost momentum, opportunities, market knowledge, and possibly potential star performers.
The key is to make sure that your production teams understand that this is not “business as usual” and that this challenging environment will require a significant step up in their day to day activities. While we don’t want to look to production resources as a way of reducing costs, we certainly can’t afford to carry those that can’t or won’t adapt.
Face-to-face meetings are now non-existent. But that does not relieve sales people from their selling efforts or long term goals. Staying visible to our current clients through various means without being antagonistic will be tricky but critical. Additionally, prospecting to find new opportunities will need to significantly increase as well, as some of our clients will go “dormant” and we will need to replace those lost opportunities.
Driving results through increased activity of the right kind is what good sales and recruiting management is all about. Make certain that the methods, measurements, and activities are clearly defined and in place so that your organization weathers this perplexing storm.
Rick Carlson, Sales & Recruiting Management Program Director