In mid-September 2007, markets began to tumble as financial institutions started to fail. This was the beginning of the 2007-2008 financial crisis that crippled businesses around the globe for years. I was fortunate during this time to be part of a sales and management team that saw this crisis as an opportunity to gain market share…and we did.
Before I tell you more about my experience a dozen years ago, let me state clearly that I realize that this economic downturn is projected to be worse than the last financial crisis, that a lot of people and companies are hurting, and that the most important thing during this crisis is for us all to stay healthy. All that said, I thought it might be valuable to share the story of how we managed to grow our business during a market downturn, in case you can apply some of these tenants to your business.
Visualize your business and each of your main competitors on a pie chart, each having different sized slices depicting different market share. When the entire market shrinks, the pie gets smaller, but the portions stay the same. If you want to grow during a market downturn, you must take share from someone else.
When economic conditions turn bleak, they are bleak for everyone. Too many businesses look solely inward during this time. You may even see leadership shifting from the CEO to the CFO. When the economy slumps, businesses tend to do three things: cut travel, cut advertising, and enact a hiring freeze. They immediately go into survival mode. Of course, this is important and depending on the state of your business, it may be your only option. But what if you could go on the attack?
Bad economic conditions can be a great equalizer. The bigger businesses in the pie may have inefficiencies that were once hidden by top-line revenue. Now they get exposed. Can you directly attack the top one, two, or three leaders in your market? Can you rally your team, declare war, and go after their big accounts, their big projects, their weak spots? Can you be more nimble — outflank the big guys? Can you be more efficient? Can you take a moment took look outward when all of your competitors are looking inward?
In 2008, we did not grow year over year. We ended up flat. But we had a funny new mantra across the organization, “flat is the new up!” Meaning, we knew that if we could hold ground while the pie was shrinking, we’d come out just fine. In 2008, our market shrank 20% and we emerged in 2009 having taken over or challenging for the top three spots in all of our key verticals. We were aggressive. We were relentless. And we took it from the big boys at the top.
There was an additional unforeseen benefit to our approach that year: our morale stayed high. The recession was tough. There were layoffs. We all worked longer and harder — but we were all in it together. We had shared objectives. We celebrated every small victory. We had buy-in throughout the organization. Everyone became a salesperson, and everyone contributed.
Keys to Success in a Down Market:
- The pie is shrinking for everyone — to grow (or stay flat), you must take it from others.
- A bad economy can be an equalizer, leveling the playing field.
- Pick specific targets i.e. “X” product from “Manufacturer Y” – then go get it.
- Celebrate small victories. High morale can make all the difference in your success.
- Stay positive. Most of us learn more when times are tough than when times are good.