The National Bureau of Economic Research, the non-profit group of economists that decides on the official start and end date of recessions, still hasn’t reached agreement on whether it is ready to pronounce the current recession at an end. Naturally the significance of such a non-pronouncement is greater for those with a more academic interest in market cycles than to those with a more business focus who measure the end of a recession by whether their pipelines are showing signs of meaningful growth and deals are actually getting inked.
That is not to say that it wouldn’t be nice if recessions did have neat start and end dates so that you could plan accordingly. The reality is, of course, that those who are quickest to see signs of a downturn and then make the necessary business adjustments early (cost cutting being paramount among them) fare better during that downturn. Likewise those who are first to see signs of recovery and start to refocus on top-line growth early can gain real market advantage in an upturn.
The stronger than expected retail sales results that I talked about in an earlier post are obviously providing the NBER with some real recovery-supporting data, however, the more interesting story is how that sector itself is interpreting the trends.
Retailers are now scrambling to adjust from a bottom-line focus to a top-line one in order to take advantage of any upturn. The Wall Street Journal on April 19th reported that “In a bid to boost sales as consumers cautiously reopen their wallets, some retailers are putting more emphasis on top-line growth in employees' incentive pay and training programs.” The article goes on to report how JC Penny is trying to upgrade store managers sales skills, Home Depot is training cashiers as well as floor staff on selling techniques and Macys is tying more of their exec’s incentive pay to sales growth.
So here you have major players in one sector making bets on the recovery and adjusting their focus accordingly. The reality being that any recovery will likely be slower and less pronounced that we have been accustomed to over the last number of recessions and as a result competition for top-line growth will be particularly intense. As evidenced by JC Penny and Home Depot, some companies understand that the skills of their associates will make the difference. They also understand that selling is no longer a neatly demarked activity practiced only by those with “sales” or “business development” in their job descriptions. JC Penny recognizes that store managers have a critical role to play in coaching sales staff and modeling excellent selling (not to mention customer service). Home Depot has identified that cashiers can also influence buyers at the point-of-purchase.
The more expansive approach to selling that these organizations are embracing is one that I believe will become the new norm. But in order to execute on it organizations will need to equip those in roles adjacent to or supportive of sales with real selling skills. The WSJ piece quotes a consultant Craig Rowley, senior vice president of consultancy Hay Group's retail consulting business, (who) says about 20% more clients have requested his advice on sales training in the past six months, and that such training is increasingly for customer service—a big driver of sales—rather than tasks like restocking.
With risk of sounding self-serving (something I try to avoid on this blog) I can support Mr. Rowley’s assertion by reporting that Huthwaite, which provides sales training to a wide range of verticals, is also already in 2010 (very happily!) seeing a double-digit increase in organizations looking for help refocusing on their top-line and even more pertinent to this post: help in developing the selling skills of more than just their frontline sales people.
This supports my assertion that Sales 2.0 is not just about the technology, it is equally about the expanded nature of sales across roles and the blurring of those roles. Interesting days lie ahead!
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