After speaking with 5 business owners today, all within the SMB market, it now seems apparent to me that a new pattern is starting to develop within the current recession of business owners increasingly firing more sales staff and account managers for one distinct reason.
This may sound like an obvious move for any business owner in this current recession until you find out the reason why.
3 out of the 5 business owners I talked to today had decided to ring customers who had recently stopped using their services to find out why. What is very interesting is that the bulk of the ex-customers left all 3 businesses due to conflicts with the businesses sales staff when seeking better deals on their contracts.
I have provided a real life example below.
One of the business owners I talked to today runs a mobile phone business. He noticed that in the last 3 months that new sign-ups have dramatically fallen and even worse upgrades have all but disappeared.
After ringing all the ex-customers he found out that his current sales rep was refusing to re-negotiate better deals with customers who rang up and even worse refused to even look at dropping the current fees to provide a more competitive market rate for prospects.
Prospects and customers knowing that this is a buyers market just went to a competitor who gladly offered a better deal. When the business owner asked the sales rep why she refused to negotiate all she could say was that she saw no reason to drop the prices. After further questioning it become clear that the sales staff add no understanding of the current market climate and the importance of keeping existing customers!
As a business owner you are responsible for making sure your sales and account staff are fully aware of the absolute importance of keeping existing customers and providing competitive rates for prospects.
Surprisingly(?) some staff have yet to be directly impacted from the recession in their own life and thus believe that the business is fine as well and is operating in a non threatening business environment.
I recommend that you talk to each sales rep and account staff member and drill into them the importance of keeping existing customers happy even if this means dropping prices or re-negotiating existing contacts.
Additionally if you are not part of the sales process anymore add yourself back in to provide a final sanity check on the revised rates or contract just incase your sales team embrace the new focus a little bit too much and remove all margins!