Selling Through a Slump

Folio: The Magazine for Magazine Management, Sept 1, 2001 by Josh Gordon

Key strategies for getting through a short-term downturn by building long-term strengths for your clients--and yourself.

When an advertising market slows, every ad sold is scrutinized. Advertisers become more demanding, competition gets keener, and rejection rates for sales people go up. Sounds grim, but it is possible to turn adversity into opportunity. A slowing market can benefit a sales organization that is prepared to make the adjustments required for success. The key is to realize that every recession eventually ends, and that the behavior of your sales organization during the recession will largely determine the level of success you enjoy for years afterward.

For ad sales managers there are two goals. The first is to maintain revenue to keep your organization going; the second is to make strategic moves and investments so that when the recession ends, your competition will not know what hit them. Recessions are times when great sales organizations move forward and weak ones fall behind.

it is also important to estimate how strong your competition might be. Recessions favor bigger organizations with more diverse streams of revenue. Recessions also favor established brands, since buyers are less likely to take a chance on something new when there are barely enough funds to cover the basics. In short, recessions favor the strong. If you work for a leading publication, it is time to leverage all you have to eliminate some marginal competitors. If you are a small fish, it is time to aggressively position yourself as an essential niche buy in a recession.

There are also a number of strategic moves you and your sales staff should be making.

Focus your time more aggressively. Because it takes more time to make every sale in a slowing market, it pays to become more selective with your time and resources. You simply don't have the time to chase after every prospect that pops up. Spend extra time with your core accounts. If you loose them, you loose big.

Also, focus your attention on companies that are using the recession to move their business forward. When you make a call, simply ask your clients how they are dealing with the recession. If the answer is all about cost cutting, it is likely that you have identified a company that will move back a few slots during the recession. If the answer is all about strategic planning, you have identified a company that is likely to move forward. If you focus more of your time on companies that are moving forward, your attention will gravitate toward the bigger ad budgets. And when the recession ends, you will be in tight with the growth players.

Meet your customers, again, for the first time. One of my best customers, one who never bought bargain-basement ad space, just surprised me recently when he bought from a desperate competitor at crazy prices. In hard times, some of your clients are going to act differently. Most will become more price sensitive, some may cut back, and some might stop advertising altogether. At the start of a recession, face-to-face time is essential. You may find that their ways of evaluating advertising media are shifting, and the clients whom you thought you knew well are changing. You need to review their evolving needs and act accordingly.

Lock in your core customers: Think contracts. The best way to sell ad space is always by contract--but in a recession, contracts become even more critical. As a recession unfolds, your clients' organizations will be looking for ways to cut expenditures--and ad slush funds for opportunistic buys will be among the first to go. If your ad placements are not nailed down by contract, they may not stand. I advocate being very aggressive when contract-signing season comes, giving out extra concessions to get clients to sign on the dotted line.

Sell the "what happens when it is over?" story. This recession will end. But then what? Business history is packed with examples of companies that maintained advertising during recessions and moved ahead, while competitors that cut back lost marketshare. Just because your clients' customers are not buying at the levels they used to does not mean they have stopped reading, thinking and formulating opinions about brands and products. A recession is a forward-thinking marketers opportunity. There is typically less ad clutter and promotional activity in general, so what ever is done stands out more.

After I had this conversation with one client he replied, "Look, I can either cut my ad budget or lay off people--which would you do?" Although your clients face tough choices, there are powerful reasons why they should keep their advertising budgets up during a recession:

* Their share of voice will be heard much more loudly.

* Since their competition is likely to be much less active, this is the time to out-market them and build marketshare.

* Advertising at a time when others are not advertising builds confidence in product lines.

* Recessions don't last forever, and when they do end, the folks who invested in their future by advertising will reap the rewards.