Why You Need Special Recession Payment Terms
As leaders, one thing we’re all aware of is how tight budgets are – both yours and your clients’.
Listen, I love getting paid for deals upfront. Cash flow and payroll are real my friends. But I also like closing deals. When times are uncertain, it needs to feel much less risky for prospects to buy now. Have you talked with your finance team about what risk you can shoulder so your prospective clients don’t have to? For example:
- Cancellation clauses. If it’s not working, they don’t have to pay for it.
- Better terms. How much less can we get up front? Can we extend 90-day vs. 30-day terms?
- Pause clause. If times get tougher, how long can we let clients pause their contracts with no extra fees? Can we tack on services to the end of the contract or do they lose some value during the pause?
Talk to your sales reps about the exact objections they’re getting out there.
What solution would help?
Important note: if they can’t tell you, they need some help.
READ: Changing Sales Incentives During A Recession
Here’s where to focus your coaching:
- Price objections are the beginning of a conversation. The most important thing top reps do next is ask open questions to uncover the root of the objection. A price objection could mean:
- My budget is frozen
- I’ve already spent my budget
- I don’t get more budget until next month
- You’re too expensive
- I can’t validate this spend to my boss
- There are 27 more, but you get my point
Work all four steps in overcoming an objection to get the best intel, and make it easy for reps to share. For example, you get an email for every price objection with a link to the call recording and the rep’s feedback on the root cause (trust, but verify, right?)
- Reps need help getting to the economic buyer in order to get these answers! If they’re stuck with a mid-level leader, they may not get the root cause. Coach reps on asking detailed questions about all the purchasing steps and people involved. These skills can absolutely be taught, but they aren’t 101 (hell, even 201) level conversations. It takes guts to ask for help going around a prospect and they’ll need some lines to steal, some room to practice, and some great role models who do it well. Bonus: you’ll get more accurate forecasts and fewer stuck deals as a result as well.
READ: Leading Sales Teams Through A Recession
Need help building and coaching these skills? Contact us to ask for details on our Recession-Selling Bootcamp for up to 15 team members. (Bonus: you can expect we’ll negotiate payment terms!)