We were lucky that the downturn hit us early.
In July 2008 we lost two of our largest clients; within a week of each other and on a week’s notice… It made for interesting internal conversations and a scramble to conserve cash. We were luckier still that between attrition (top heavy), expense management (read: extended vendor credit), a drastic revision of plans (cancelled projects) and the weather (lower electricity and fuel bills) we were able to bring our expenses down by about 35%.
Cash flows are still a mess but some creative sacrifices and adjustments by our middle and senior teams made it possible for us to ride the last five months. What could have been a very painful nightmare, by the grace of the Almighty, wasn’t.
Here is what worked.
A focus on sales: Since July the sales budget has been the only constant. Where ever we have found an opportunity to pitch and sell, we have pounced on it. The rule at the shop now is that everyone is selling and keeping an eye out for opportunities to sell. We had four international sales pitches in the last five weeks. A year ago I wouldn’t have spent the money, now, in this environment, it was a no-brainer. I didn’t have the money. I borrowed it from my travel agent and turned into an international free loader leech.
Remember cost cutting is universal now. Customers are also looking for solutions that are effective, functional and cheap. A year ago they would have cared about the brand, the utility and your pedigree. Today if you can do a good job on the pitching front, you have got half a chance. And if you drop your pants as far as pricing goes, you have the other half in the bag.
Follow up: All in all, we try to meet at least one new sales prospect every two days and follow up on the current list of actives every third day. I have four clients who are sick of my weekly follow up calls, but if a shameless weekly follow up is what it will to close, a shameless weekly follow up it will be. To close or be let in at an opportunity, you need to be visible. To be visible you need to be a pain. To be a pain is better than being broke or dead.
Patience and egos: There are days when I wonder if I am lowering myself by calling up every alternate day. You know, give the client space, let him decide and when he is ready, he will call. In a down economy your ego doesn’t count and patience as well as persistence is gold.
Internal expectations: The kids that we work with are the smartest lot I have ever had the privilege of sharing a team. They know the score. Rather than letting them wander away with assumptions and guess work, be fair and open and set the correct expectations. Everyone else is dying, we will not. It’s not going to be a party, it will be a nightmare but we will figure out a way. It may end in a week, or it may linger for the next six months. We will prevail. Not in an imaginary, isolationist, reality dysfunctional way, but by simply closing more of our active pipeline than the competition. And if it requires that we kiss our travel agents butt and turn into shameless stalkers and freeloading leeches, so be it.
That is why a focus on sales is important. Sales, prospects, pitches create hope. They give life to an organization. They build resilience against bad news.
Don’t lose hope: Every down turn has a plus side. Look for it. You will have bad days but don’t let that mood leave the room. Remember there is nothing fundamentally wrong with the world or with your business. We have all just hit a bad patch at about the same time. Once we figure out the engine trouble, we will start moving again. You just have to sit, wait and survive till that happens.
Your mood sets the mood with everyone else in the organization. Remember that when you walk in and walk out.
Conserve Cash: And if you can manage to, conserve cash.