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From The Editor

Selling During A Recession

Jim Borneman, Editor In Chief

V irtually every company in the textile industry is dependent on someone at some point -- and, hopefully, often -- making a sale. And if you speak with people who sell for a living, they will tell you the bar is raised significantly in difficult times.

Recessions have a nasty way of putting a multipoint squeeze on sellers. Less demand soaks up the easy sales, increasing competition can put pricing under pressure, reduced manufacturing loads can make deliveries bumpy -- and who can afford to carry inventories of raw materials or finished product when cash is tight?

With less revenue, budgets that support sales are often, mistakenly, slashed, dumping the seller's toolbox. Less travel undermines relationship selling. Less advertising reduces awareness and opens the door to changing preferences. Less research and development reduces the prospect of getting in front of customers with something new. Reduced sales mean lower commissions at a time when sellers have to work harder for reduced compensation. And, with lower revenues, there are a lot of eyeballs looking at sales departments for solutions.

It is easy to say recessions create a time to invest, to innovate and to increase marketing -- and if your company has deep pockets or some recession-proof product lines, this is sage advice that will make you a winner. But, for companies that are on the slippery slope, achieving a balance between cost reductions and increased sales effectiveness will take some real creativity.One solution might be partnering, merging two or more competitors into one company with a broader product offering. With textile capacity utilization at 58.2 percent, two companies becoming one creates efficiencies. Merging can also reduce competition and help stabilize the market.

As one could infer from IFAI's Steve Warner's remarks in Textile World 's IFAI Expo preview, "IFAI Sets Sail In San Diego" -- and it holds true for most meetings and trade shows -- maybe sales effectiveness can be optimized by making sure your company has a presence at events as an exhibitor or attendee, but with a smaller staff. Warner expects the same number of companies to be participating this year, but he anticipates slightly lower attendance.

In recessions, one thing that stands out is a winner - a company that inspires true confidence, with full awareness of the current situation and optimism that it has what it takes to win. Who doesn't want to do business with a winner? It is not about putting on a good show, but about being a key element in your customer's success.  The trick is to tell that story - tell it in your marketing, and in your PR, and position your sales team to capitalize on that story. You would be shocked by the number of these stories that remain confidential. Success that is a secret can't help sales. Illustrating that your company has the right technology and brainpower to create innovative solutions that add value - not just for your customer, but to the whole supply chain - is a story worth telling.

There is no simple solution for achieving cost reductions while increasing sales effectiveness, but avoiding the panic that causes companies to become invisible in the marketplace is a simple first step.

July/August 2009

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