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Manage Sales Costs Despite Uncertainty

June 27, 2019

Contributor: Jordan Bryan

Get ahead of difficult decisions and explore cost optimization strategies that focus on long-term, productivity-oriented investments.

Concerns about a maturing business cycle and a possible inflection point in the economy have led to more uncertainty about future growth. Events such as Brexit and the U.S.- China trade war have intensified these concerns. Nearly every organizational leader is preparing to answer the board’s question, “How will our organization thrive in less-than-optimal economic conditions?” Forward-thinking heads of sales are similarly focused on how to best push through uncertainty. Instead of taking a wait-and-see approach, sales leaders should consider their plan of action now.

“ Sales leaders will better position their teams to not only weather the storm, but help their customers do so as well”

“Surprisingly, the most progressive heads of sales are not solely focused on managing costs as they prepare for economic challenges,” said Brent Adamson, Distinguished VP, Advisory at Gartner. “Instead, they focus on making small but powerful changes to start positioning their teams to take advantage of the opportunities that economic uncertainty and a downturn can create.”

Manage costs effectively

Heads of sales who are under pressure to cut costs often turn to “quick wins.” While these decisions can save money in the short term, they can inhibit sales organizations in the long term. “By proactively focusing on cost management activities, sales leaders will better position their teams to not only weather the storm, but help their customers do so as well,” says Adamson. Consider these cost optimization alternatives to common tactics to cut costs:

Get ahead of travel and entertainment cuts

It’s common for sales organizations to freeze travel and entertainment (T&E) during tough economic environments. However, doing so can leave customers underserved. Instead, internal financial planning and analysis partners can review current T&E spend and identify trends. By remedying T&E behavior proactively, overly broad cuts can be mitigated or avoided later.

Understand sales productivity

In an economic downturn, sales leaders often face the unenviable task of reducing their sales force size based on past sales or future sales projections. To mitigate this, engage sales operations teams to analyze sales productivity. By leveraging market, customer and seller data, sales leaders can optimize seller time between account retention and growth activities.

Audit subject matter expert activity

Subject matter experts (SMEs) play an important role in the sales organization. Often, SMEs are managed as a ratio to sellers. Instead of reducing SME head count to cut costs, optimize SME productivity and spend by working with SMEs to audit their time and identify low-value, high-frequency sales activities. Sales leaders can then codify information related to those activities in enablement tools for sellers.

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