How to sell innovative B2B products in a recession
We are in difficult times. Once the COVID-19 crisis passes, as it definitely will, we will have an economy in a full-blown recession.
Complex B2B sales of innovative products (SaaS, hardware, new tech, etc…) is challenging at the best of times.
First, let’s review the definition of innovation from Wikipedia; the application of better solutions that meet new requirements or unarticulated needs. An innovation is something original and more effective and, as a consequence, new.
There are several reasons it is so hard to sell innovative B2B products. Including a long sales cycle, multiple decision-makers, and significant risk. But the biggest challenge is that the product or service is discretionary. It is something that customers have not budgeted for. In a recession this challenge compounds.
Because discretionary purchases are amongst the first items to be canceled or postponed.
Selling innovative B2B products in previous recessions
I know about this first-hand. I have experienced selling innovative B2B products during a recession twice. During the dot com bomb of 2000, I was selling internet access software to hotels. Travel declined so hotels cut back on all discretionary spending. During the recession of 2008, I was selling enterprise software to retail banks. This was one of the hardest-hit sectors during that recession. In both recessions, I needed to make major changes in how I sold. But I was able to get my sales to rebound and you can too.
Many B2B sales and marketing departments are struggling with what to do given that customer activity and sales are on hold. Here are some practical steps to take right NOW;
Review your marketing content and sales tools. See if they address the 3 core questions that customers ask to evaluate purchases of innovative products during a recession;
1. Why buy?
2. Why now?
3. What happens if we don’t buy?
Most companies that sell innovative B2B products over-emphasize the “why buy” aspect. They do a poor job of communicating and building the case for “why now” and “what happens if we don’t buy”.
Both Marketing and Sales need to address this. Marketing copy, website content and sales pitches need adjusting. They need to focus on the bleeding artery pain point that your solution addresses.
You should forget about the secondary benefits.
Don't emphasize features and functionality.
Forget about demos.
You need to lead with value, outcomes, and benefits.
Another way to look at this is through the Jobs to Done framework created by Clayton Christensen. The idea is that customers buy products and services to get a “job” done. The job that customers hired your product to do before the recession is likely not the same job they will hire your product to do during a recession. For example, the job requirements may have moved from increase sales to reduce costs. You need to figure out what the new job is and how to articulate it.
Let’s look a little deeper at each of the 3 core questions that customers ask about innovative B2B products. Especially during a recession;
Think beyond features and benefits.
Before a customer will buy your innovative B2B product they first need to buy into the need to change.
They have been operating with the status quo state for a long time. Remember the definition of innovation – it involves something original, more effective and new. It will mean some form of change for the customer. Change is hard. Change is risky.
You are competing against;
1. Status quo. Do nothing. Delay.
2. Other projects
This aversion to change compounds in a recession. Many buyers have preconceived notions. Including the idea that investing in innovation during a recession doesn’t make sense. Your first job is to show them why this is the right time to invest in the type of innovation you provide. You need to get them to buy into the need for change. BEFORE they will consider your product.
In a recession, your product needs to fill an urgent or critical need. If it is discretionary then customers will have no pre-existing budget allocated for purchasing your product. So, you need to go from an unplanned, unbudgeted, to sold. That’s a big mountain to climb. Especially in a recession. When decision-makers worry about their own jobs and become more risk-averse.
You can’t overcome this obstacle to a sale with a standard sales and marketing approach. You need to disrupt the status quo, challenge current thinking or provoke your customers. You have to provide a new and different insight to get the attention of buyers. Old value propositions will not work in a recession. Budgets are shrinking and scarce budget only gets allocated to urgent projects.
If you can’t get to this level of fresh insight then you are at risk of not getting any attention from decision-makers. Worst case, you will go through a long sales cycle only to end with a “no decision”, “no budget” or “postponed”.
Besides re-working all your sales and marketing content, you may also need to focus on different target customers. Focus on customer segments where your product is an urgent need. De-emphasize customers where you are a nice-to-have.
What happens if we don’t buy?
In complex B2B sales, there are usually multiple decision-makers. One of those decision-makers, the economic buyer or CXO level, is going to ask the tough question of “what happens if we don’t buy?”. You are better off addressing this and arming your champion with the answer from the start.
The consequences of not buying have to be significant. You need to quantify and articulate the business case for NOT investing in your solution now. What is the opportunity cost to the customer of waiting 1 year to buy your product?
Companies still buy in a recession it is just a more challenging sales process. Take the steps outlined above now. This will help you maintain the sales momentum of your innovative B2B products.
Please connect with me here. If you would like to explore other ideas on how to sell your innovative B2B products in a recession. As well as learn what best in class companies are already doing.
About the Author: Bryan Socransky is the Principal Consultant of Disruptive Consulting Group. Bryan's experience spans over 25 years in enterprise software and B2B SaaS. He helps enterprise software, SaaS and IT companies grow by disrupting the status quo in favor of their innovative products and services.