Macro-Economic Challenges May Create Opportunities

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The Sales Warrior Within | Season 2 Episode 22 – Macro-Economic Challenges May Create Opportunities

Andy Olen is a Sales & Leadership Trainer and High-Performance Coach. Andy works with talented salespeople, business teams, and leaders who seek empowerment, improvement, and insight. Andy’s clients strive to be the best in class.

“Good Selling, Good Leading, Good Living.” – Andy Olen

Macro-Economic Challenges May Create Opportunities

  • Obstacles for ALL are opportunities for the Sales Warrior
  • As interest rates rise and inflation accelerates, it’s a difficult moment for salespeople and businesses
  • However, salespeople who stay sharp, accelerate their skills, and listen closely to their customers will overcome challenges faster than others
  • Andy Olen provides insights and advice on how salespeople can navigate challenging macro-economic moments like the one we are in now

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Speaker: Andy Olen

| 00:02 | There’s a Sales Warrior within each of us. My name is Andy Olen and I’m here to help you discover and empower the Sales Warrior Within. Sales Warrior is Mrs. Andy Olen. Welcome to the Sales Warrior Within podcast. Hope all of you are doing really well out there. Well, it’s June 13, Monday, June 13, as I’m recording this and likely publishing this podcast today.
| 00:30 | And I’m looking up at the screen and the television in my office and it says the Dow Jones down 3%, just under 3%, the SP 500 down three point 95%, the Nasdaq even worse. So it’s one of those interesting moments in business where across every sector of publicly traded companies, across the bonds, across cryptocurrency, across commodities, everything is doing poorly.
| 00:57 | And I remember times like this where it’s just nothing could get going. Obviously, the Great Recession of 2008 and the financial market crashes during that time periods. Every time you looked up at the screen at a hotel, if you were there on business travel or wherever it was, or I guess you probably looked at your BlackBerry back then. I don’t even know how you got stock quotes back then. Nevertheless, you found a way to get your stock quotes and everything was just falling apart. And you thought, my gosh, the carnage would never end.
| 01:26 | And this is one of those moments with really high inflation or the cost of goods and energy just going up through the roof about 8.5% plus year over year inflation. What that means is that a dollar of buying power a year ago represents now only 92 or ninety one cents of buying power. So you got to have more dollars to buy the same goods and services that’s basically every dollar in your bank account or every dollar in your wallet or purse is going down in value with inflation this high.
| 01:58 | And what that does is it fires off central banks around the world to raise interest rates, to try to cool things off and bring the pricing down, to try to suffocate demand a little bit. And you got to be careful with that, because if you do too much of that, then you might flip the economy into recession, which means that the economy is getting smaller, it’s not getting bigger. And as economies get smaller, there are less and less opportunities. So I think about this in terms of a couple of different aspects.
| 02:28 | One, how do salespeople operate within this very dynamic and unfortunately negatively dynamic moment? And second, thinking about challenges, how do you overcome challenges and what we’re all dealing with right now? And I’ll take that second question. First, how do you overcome challenges is we’re all in this moment together right now. These are macro level challenges. And what do I mean by that? I mean that these are challenges happening to everyone.
| 02:55 | You can’t hide from inflation if you’re really in a US economy, if you’re in a Western European economy, if you’re an Australian or Southeast Asian economy, the locking down of COVID, that happened in 2020, and then all of the government responses around the world to push stimulus and money into the system to try to get people through this.
| 03:21 | And on top of that, the central banks lowering interest rates and doing something called quantitative easing or really creating a lot of cash, a lot of slushing around cash out there in the economies around the globe has led to this inflationary increase. Along with that, you have the tightening of supply chains, which is pushing costs up. You have increasing labor costs and raw material costs. That’s all hurting the situation as well.
| 03:49 | But these are macroeconomic challenges. And as I thought about different macro challenges when I was running a multi billion dollar organization or selling a drug alluding stunt many years ago, I always welcomed macro level challenges. And here’s why. And this was my mindset now with macro level challenges that are impacting everyone where nobody can hide, the best sales team, the best marketing team, the best business team, or the best individuals are going to overcome those challenges before everyone else.
| 04:25 | And if you overcome those challenges before everyone else, you should then have an advantage. And that could resonate then in picking up market share, it could resonate in selling more. It could resonate in just the ability to fine tune your skills in order to meet the challenges of the moment. And so a macro level challenge creates an obstacle for everyone.
| 04:49 | And if that barrier goes up in terms of difficulty to overcome the situation, the best team, the best individuals, the most highly skilled, highly trained individuals will find a way to overcome it first. And there should be advantages for you. I think about this in the context of my own business and I think there are a ton of coaches out there and no knock on anyone. Anyone can be a coach. Anyone. Everyone has a good piece of advice or life experience that probably helped him or her out.
| 05:20 | That being said, I noticed because I get a lot of these emails and I take a look at them, different people reaching out to me either on LinkedIn or directly to my email saying that, hey, I’m a coach on such and such thing and I’d love to be your coach. And I always look at it because, hey, we all could use coaching, no doubt about that. And I look at the profiles and many of them are pretty young.
| 05:44 | And I look at the depth of experiences that they have and I say, well, they’ve been through some certainly some interesting things, but I’m not sure a year or two of business experience is enough to help me think about how I evolve my business versus someone who’s been through one or two full business cycles, someone that’s been in a start up mode and then matured, a business hired on the team took that business, maybe sold that business and now is starting it again.
| 06:12 | That kind of resume, that kind of coaching experience is exactly what I need because that’s what I need to mimic. That’s what I want to do as well. And so one of these things is that if you don’t have a lot of experience and you’ve had really good, say cryptocurrency returns over the last couple of years, you’ve had really good stock market returns and you’re sort of living on that paper wealth effect. And when I say paper wealth effect, what I mean is that the money that you’ve made has been on paper.
| 06:42 | That person has made is on paper, but it hasn’t been converted into dollars and put in the bank and the profits haven’t been taken. Well, all of a sudden that paper wealth has been cut in half. If it’s cryptocurrency, it might have been cut even further than that. If it’s been in an azdaq in stocks that’s been cut by over 30%. Now the S Amp P 500 cut by over 20%. And if all of that wealth generation has gone away, can all of the coaches out there, all of the sales trainers, again thinking about my own business survive?
| 07:15 | Or some people going to have to go back and try to find that corporate sales training role or go back to some sort of corporate job as a result of this. And if that happens, then all of a sudden the number of coaches out there, the number of trainers out there that weren’t built to get through a really tough macroeconomic situation are going to struggle. They might even go away.
| 07:39 | And for those of us who have been able to manage the business through successfully through Covet and now successfully through what I will call the great leveling effect here, of all this money that was sloshing around in the systems is going to dry up and we’re going to back to sort of a regular state with probably one or two years of pain. Hopefully folks like me and other high quality businesses are going to be very successful through this period and set themselves up for a lot of success on the other side.
| 08:10 | So look at macro events that are hitting you and other salespeople, other businesses as opportunities to shine. Are you in position to take on these challenges and be able to deliver in this moment and by expressing the sales warrior within continuing to empower your sales voice? I talk about empowerment a lot. It’s the building of strength and confidence so you can control your own destiny by doing these type of things.
| 08:38 | Then you have a great advantage over those who are not doing it and may get washed out of this moment. A lot of companies have come online during this time when money has been very cheap and easy to gain access to. They’ve hired salespeople, maybe some sales people without experience. They’ve promised them the moon in terms of compensation? Well, you know what their bond or their debt payment is coming up.
| 09:03 | And if interest rates are at six or seven or eight or 10% and they can’t make that payment, they’re going to have to make cuts within their organization and they’re going to cut the people that don’t have that much experience out. If you don’t have a lot of experience, upskill yourself very quickly, get trained in negotiations, get trained in sales effectiveness, get trained in presentation skills, prove that you are someone who’s going to help your organization get through what is definitely forming to be a unique macroeconomic challenge for all of us and go for it.
| 09:37 | Get yourself into that Upskilled position and put yourself in position to be incredibly valuable if your company is going to go through a rough time. So let’s also address sort of the second question is like how does all this impact sales? People have sort of impacted talked about the impact of salespeople just a moment ago. But what’s also happening? Please understand this from your customers viewpoint. Let’s say that your customers run businesses. You’re selling to them a business to business solution.
| 10:07 | And I know that’s what I sell and that’s really what I cater most of my work towards. I know the space well. I’ve sold business to business now for well over 20 years and over four and a half billion dollars of sales globally. So I’ve had some experiences through tough boom and bust cycles like this. And what’s going to happen here is that the businesses that you sell to that are making money, who are able to manage through inflationary dynamics, who can control labor costs or maybe even pass on some of the pricing to their customers and maintain the demand for their products, they’re going to do through this.
| 10:48 | Other customers of yours who aren’t making money have taken out a lot of debt or are highly levered. Right. What levered means or having leverage means is having a lot of debt on your balance sheet? Well, the cost of that debt just went up significantly. And the time it’s going to take to turn to profitability in this unique moment is now longer. And that puts a unique pressure onto the leaders of businesses like that. So you have to be ready for that.
| 11:15 | So what I would ask you to do is in a higher interest rate environment where the cost of debt, the cost of raw materials, the cost and inflationary costs are going up. That puts pressure on the income statement of your customers, evaluate your customers financial health. Do you believe that three, 4510 of your customers are going to do fine through this? Maybe it’s a little bit of challenge, but overall fine, or are they in already a risky position and this macroeconomic situation puts them even more at risk?
| 11:51 | I would evaluate that. And for those who are going to be in the riskier situation, you might have some early tells as well. Some of your customers might come to you and say, we need to increase our payment terms from 30 days to 120 days. That should raise a red alert because they may be having what’s called the liquidity issue. They don’t have the cash to pay their vendors, and if you keep selling to them, they might just run up a huge account receivable balance. You actually never get that payment.
| 12:17 | So if they’re coming to you begging for higher payment terms, you might say something like, yes, if you pay off your remaining balance and we start back at zero and on the next $100,000 or whatever the right economics are, I will give you a little bit longer payment term. But then you got to really make that decision based on your belief and your organization’s belief on the financial health of that customer. If customers are coming to you asking for contract changes because they’re worried about your supply chain consistency, that you may have had some challenges delivering on products, that should be a warning sign as well.
| 12:52 | Maybe not so much about the customer, but about your ability to deliver products. And as a result of any fear that a customer may have, and they may come to you and say, hey, you know what, Andy? We got to renegotiate because we’re not confident you’re going to be able to deliver because your supply chain, we’ve heard, has been disrupted. We’re going to add other vendors to our contract and we want you to amend your contract as a result of that. If you hear that, you have to be ready to assure your customers that you can deliver.
| 13:21 | And if you aren’t assured that you can deliver products, then maybe you want to negotiate something that could be a win win for both parties. And it doesn’t allow your customers to go and add other vendors to the contract. So you can see you have to be really astute really alert and look for opportunities where your competitors may not live up to your customers needs where you can.
| 13:51 | And at the same time, watch out for some of the red flags of failing or struggling businesses in this new, more challenged economic moment coming to you asking for relief or help. Those red flags and that relief or help should be closely watched, closely guarded, because you don’t want to make a bunch of bad decisions and sell into a lot of companies who don’t have the intention of paying you anytime soon anyway. A lot going on.
| 14:18 | Last thing I’d say is really a repeat of one of the first things I said is take advantage of this moment. Big macroeconomic challenges like high interest rates, high inflation, challenging macroeconomic headwinds out there, geopolitical events like wars, tightening supply chains.
| 14:37 | All this stuff can be an opportunity for you to sharpen your blade, accelerate your impact by becoming an even stronger, more well trained, more polished salesperson in this moment and being very, very thoughtful about how you manage your customers who may be going through some level of pain. Hopefully you have a situation where everyone’s doing well. All the customers that you’re calling on are doing great.
| 15:07 | My guess is that they’re going to start coming to you for some asks and be very thoughtful as you navigate through that always use yes if negotiations but also keep being a student of the macroeconomic events and macroeconomic situation around you. If you can take advantage of these obstacles and get over that hurdle before your competitors do advantage to you. If you fall behind you’re not aware and you’re struggling getting over these obstacles, it could be advantage for your competitors and that’s what we don’t want.
| 15:39 | I want you to be successful. I am here to help you. So if there’s anything or any insight that I can share with you, I am all ears, or you can always contact me through my website and if there are certain trainings that you’re interested in, I do have five new online courses out there in the areas of negotiations and also presentation skills.
| 16:05 | Check that out, all right, friends talk about this topic for a lot but I’m going to let you get on with your day so you can get out there and be in front of your customers and sell a ton of value. Hello, my name is Andy Olen. Thanks so much for dialing in and tuning into the sales warrior within podcast, good selling, good leading and good living.