Managing Clients Through Economic Slowdowns

The slowing economy and declines in the stock market have many organizations taking a hard look at expenses. Even firms who only a few months ago couldn’t hire fast enough are now trying to identify costs they can cut or defer.??These actions have a double impact on sales and relationship teams. Not only are their own budgets and those related to new business opportunities under review, but their pipelines have suddenly become less certain. The good news is, unlike the pandemic, this a movie many of us have seen before, and there are a few steps that can be taken to mitigate the effects of a downturn that are worth revisiting.

First, defend the base. Changing economic conditions will affect your clients’ business and your associated revenue streams.??Teams should leverage revenue and activity data to identify potential trouble spots and seek to understand the underlying causes and outlook. While there may not be a lot that can be done, engaging your clients proactively and sharing insights with colleagues can be extremely helpful.??It is also important that teams be aware of the potential client impact of actions by their own firm, e.g., credit cutbacks. In cases where client teams must give bad news, “the sooner the better” is a good rule of thumb.

Second, manage pipeline risk.??There will inevitably be deals in the pipeline that become at risk due to the changing economic outlook. Teams should understand what those are and develop plans to protect them. As part of this process, it is important to determine which deals should receive priority and understand how much room there is to maneuver on each.??Deals that are complex or require significant investment should be carefully examined to ensure that both your organization and the client can still make it happen.??This exercise often creates hard calls, but they are almost always worth the effort.??Early course corrections are disappointing; late ones create resentment.??Most importantly, stay as close to your clients as possible. Sometimes, simply ensuring they can articulate the value created by a deal can make all the difference – and a delayed deal is almost always better than a dead one.

Third, identify new opportunities. Changing market conditions create new needs for firms.??This is a good juncture to bring the client coverage teams together to review the impact and potential needs of key clients and targets.??Demonstrating an understanding of their business and bringing ideas to the table is always well received by clients.??Teams should make sure to look across their enterprise for solutions and collaborate with colleagues to be clear on traits of suitable opportunities.

The major challenge in executing defensive strategies is messaging.??Riled up by internal pressures teams can fall prey to short-sighted thinking and focus only on the immediate issues, failing to think creatively or seek options for mutual benefit.??As a result, they sometimes come off as unhelpful, unsupportive, or even badgering, all of which leaves a bad taste in everyone’s mouth.??In times of stress, it is especially important that teams to take a breath and think through these engagements, looking at the situation from the client’s perspective. Sometimes there isn’t a lot that can be done, and in these cases, teams should ask three questions:

1.?????What do you want to achieve with this client engagement?

2.?????How do you want the client to feel after the conversation?

3.?????How best can you frame your message to achieve these goals?

Clients are adults and they understand reality, as much as they may wish it otherwise.??But they are also human and can at times be emotional and irrational in times of stress.??And they also remember who was there when things got rough.??No matter what options are (or are not) available, considering their perspective and delivering sensitive messages is critical to fostering long term relationships.?

At Virun Rampersad and Associates we help teams develop impactful client messages and relationship development strategies to increase sales and cross-referrals. Check us out at https://virunrampersad.com