“Opportunity is missed by most people because it’s dressed in overalls and looks like work.” – Thomas Edison

Well, it’s official. We’re working through the worst economic slowdown in a decade, and possibly the greatest slowdown ever in the tech industry. For many of us, it’s been a long time since we’ve been faced with the challenges of selling in a down market – and for many others, it’s their first experience selling in a very difficult environment.

The current market holds particular risks for startups. Customers, after gorging themselves on every new technology placed in front of them for the past five years, are taking a break, pushing themselves away from the table, and taking some time to digest. Startups with few documented successes, little customer goodwill to fall back on, and not enough cash to “ride it out” often find themselves in a very difficult position. Here are a few tips to focus on as you ride through these challenging times.

Back to Basics

Sales has always been about getting the basics right. Qualify hard, establish credibility, trust and rapport, set milestones, overcome objections and close. When customers are spending freely, the focus for vendors shifts from the deep relationship with the customer to the transactional relationship. This focus is necessary and appropriate in order to capture all of the available opportunities that an up market produces. When the market softens, though, customer requirements become more demanding, competition increases, and sales cycles lengthen. In order to maximize the likelihood of success on any given deal, get back to the basics and pay attention to the details.

Value Never Goes Out of Style

There is one quality that all successful businesses share: they create something that people really need, and sell it at a fair price. That’s it; that’s the secret. Sounds simple, right? What’s the value proposition? What is the cost/benefit? Can you return the customer’s investment in your product 3x, 4x, 5x? Customers are focusing on what they really need, creating longer evaluations and requiring more approvals. They are focusing on the real, total costs of implementation and how soon will they recover their investment. Companies always need to improve and modernize in order to gain a strategic competitive advantage. Successful vendors sell value throughout the customer’s organization, align their offering with the customer’s core needs, and make concessions to support value (i.e., longer evaluation periods).

Focus on Your Customers

In a down market, your install base of customers becomes your greatest asset. As purchasers become more conservative, they will be less likely to take a risk with a new, small vendor. On a relative scale then, it becomes easier to grow your business within your existing customer base where they already know and trust you. Therefore, getting the early pilot sales in place will help a start-up firm prove its value proposition and leverage the relationship for future sales. Also, in a conservative buying environment, reference selling becomes even more important. Finally, where small companies were previously able to “fly under the radar” of larger competitors, those same competitors (as well as new ones) are now very aware of your presence, and, with the pie no longer growing, will be targeting your slice and taking direct aim at your customers.

Team approach

In a way, everyone in the start-up firm supports sales. Engineering develops the right product to sell, marketing finds the customers for the sales people to close, and business development closes deals that add to the customer’s value proposition. Everyone in a startup needs to be thinking about the core business of producing and selling. You cannot depend on the “elephant hunter” salesperson to fly off alone and come back with the giant purchase order – you need a well-integrated approach between sales, senior management, and product marketing. Going on a sales call with a cross-functional team (that may even include the CEO), often called a “tiger team” or “swat team” approach, will generate better opportunities, articulate your value to prospects, show the appropriate level of commitment, and craft the right offering for the needs of your customers.

Prepare for Success

The economy will eventually turn, but the beginning of a recovery can be just as dangerous to small companies as the preceding recession with business failures continuing well into the recovery. The key to managing sales during the recovery will be to continue to be disciplined in controlling expenses in the face of expansion pressures. The Wall Street Journal recently published an article entitled, “Small Companies Prepare for the Good Times to Roll Again,” in which they list four general principles to keep in mind: don’t rush out and hire just because a few new orders came in; customer will continue to be slow in paying long into the recovery, so continue to manage cash conservatively; your own suppliers will be tight on inventories, so be careful about over promising deliveries to your customers; and keep vigilant – recoveries are by no means certain.

Although there are many different strategies for how specifically to craft an offering and approach customers in a down market, they all involve understanding that your customer is in as difficult a position as you are and working to accommodate both of your needs. By listening to their needs, problems, and desires, you should be able to qualify your customers better and prove your value proposition to them more succinctly. Economies are cyclical, and down markets bring opportunities to hone your company’s selling skills, develop deep and lasting relationships with your customers, and maybe even grab some significant market share from less skillful competitors.

-Jon Goldstein