75% of companies do worse in difficult times, according to studies. But which companies do best? And what are successful companies doing to prepare for an uncertain future and downturn?
Uncertain times are often associated with declining sales and poor profitability, but this is not always the case for all businesses. There are companies that actually do relatively well in downturns.
Development of companies in a downturn ( n= 5000 companies in the study )
Impaired sales/profitability 75%
No difference 11%
Increased sales/profitable companies 14%
Studies show that there is a small group of companies, approx. 14%, that do better than others in downturns. Their sales grow in average by 9% and profitability grows by 3% units.
Three dimensions that can be identified in companies that increase sales/profitability during a downturn
Plan for the long term (during and beyond a downturn)
Act quickly and early (increase internal dialogue and preparation)
Focus on growth (don't just cut costs)
One of the most important factors that create impact, of the above points, is to focus on growth in difficult times. Don't just think and talk about survival.
Focusing on growth is about
1. Prioritize the right sales activities
Develop/ensure that salespeople's sales skills are top notch
Develop/ensure sales leadership is top notch
Ensure the sales engine/sales process and that it is followed by both salespeople/sales managers
2. Use technology to make work more efficient
Give more room for sales and growth
3. Adapt to new market conditions. For example, sell more digitally, deliver more digitally, communicate more digitally.
In times to come, start already now to plan, act and create growth.
Good luck with the sale.
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