Seven ways how sales should respond to the Covid-19 crisis

07 April 2020 Consultancy.eu

For companies to stay on top of their revenues and margins during the Covid-19 crisis, leaders need to make sure their sales teams adapt quickly and effectively to the new market environment. Key is to strike the right balance between short term needs (keeping sales running and capitalising on agreements) with long term needs (keeping clients on board and exploring new, future-proof opportunities).

Palotai Bálint and Pauza Diána are experts in the Sales practice of consulting firm Horvath & Partners, and have dozens of sales-related transformations under their belt spanning strategy, organisation and sales force transformation. Leveraging their experience working with clients across Europe, here they provide seven best practices for how sales leaders can act to successfully navigate the current environment. 

Adapt the product portfolio

The Covid-19 epidemic is changing the needs of the consumers, which in turn poses a major challenge to the product portfolios of companies, which need re-calibrating.

In many cases, this will mean a shift in focus within the product portfolio, as shown by increased data traffic for telecommunication companies or increased subscriber demand for streaming companies. In other cases, however, it means rethinking the product and service portfolio, such as online trainings, wine tastings or conferences.

Seven ways how sales should respond to the Covid-19 crisis

In a more radical case, if demand for products is temporarily eliminated, it may even require recalibration of production capacity, as seen in the case of luxury perfume factories switching over their production to hand sanitisers, or car manufacturers gradually shifting their capacities to produce ventilators or medical equipment. 

Continuous analysis is required to identify changes in consumer demand for products. This includes looking at regional differences by product categories, as significant demographic differences in consumer habits may emerge. At the end of the line, rapid recognition and adaptation to changing consumer needs is the most crucial success criteria for companies to remain relevant.

Boosting e-commerce

Due to restrictions introduced by authorities in recent weeks – curfews and shop closures – the vast majority of purchases have shifted to online channels. The most obvious channel in this new situation is online, which is enjoying boom times. 

Grocery stores and drug stores are faced with unprecedented traffic, which is more complicated by the fact that fresh goods are usually delivered via own courier networks due to special delivery conditions. In the case of some webshops, however, demand has only increased for certain product categories (e.g. televisions, laptops or refrigerators; clothing for home or training), while it has significantly decreased for other categories.

So far, many traditional retailers companies regarded their webshop as an additional channel. But now, in this new arena, the webshop may be the only opportunity for these companies to survive. In the case an own webshop is not effective enough in the immediate short term, consider joining a digital platform to reach consumers en masse. Most sectors have successful online marketplaces that work with partnerships or commission-based terms. 

Dynamic pricing

In extraordinary situations as this current one, drastic change in the price sensitivity of customers can be seen. In the case of long-lasting fast moving goods or products short on supply, they are willing to pay any price, while in other cases, purchases will be postponed even at the same price and condition level. In this situation, companies need to re-align their pricing strategies. 

In some cases, retailers are trying to maximise their short-term profits by dramatically increasing the price of some crisis-products. A good example of this is the brutal rise in prices for medical masks or hand sanitisers. In contrast, in the case of other companies, pricing is not driven by immediate short-term profits, but more on maintaining sustainable profitability and long-term customer and supplier relationships. 

In case of crisis-products, many companies have introduced step pricing, which means that the unit price grows with volume. A Danish supermarket for example offers one bag of hand sanitizer for €5.50, but the second bag is then sold for €134. Companies can also consider asking for money for services that were previously free, as seen in the home delivery segment.

In times of crisis, there is a need for dynamic pricing that takes into account real-time demand for products, the effects of (further) restrictive measures, changes in regulatory requirements, supply chain stability and stock levels. And of course, repricing must be possible on a daily basis.

Reallocating sales resources

The current situation requires a rapid and flexible reallocation of labour to where the need is highest. In many countries, redirection between teams and positions is allowed by the regulations, especially in an extraordinary situation such as the covid-19 outbreak. Flexible work organisation is key to optimise sales and support processes.

For example, if the call center is facing heightened inbound activity, then resourcing should be ramped up. Outbound sales is commonly an opportunity, as customers now spend most of their time at home. Another chance for reallocation is between business units; from sales to operations, for example, to support home delivery logistics or back-office administration. 

Maintaining personal customer management

Most companies are still in business, and most people are still working. Key for sales is to try to keep a degree of ‘personal’ contact with clients, despite that the mode of contact has changed from predominantly physical to digital. 

Sales professionals should not be hesitant to use online communication tools; telephone and video conferencing are channels that have been used by almost every company for a long time now. But, make sure that every customer is reached through the appropriate remote channel.

Assess customer behaviour and risk

Based on daily data, sales should garner insights in customer behaviour and risk. This then provides the backbone to constantly update revenue forecasts with different scenarios due to the high uncertainty of the economic situation. For the sake of accuracy of the scenario analysis, it is also worth classifying clients into different risk groups to see for sure which revenues are likely to be expected and which will be lost in the short term already.

Real time sales performance

The continuous monitoring and forecasting of the daily sales performance and pipeline is the basis for the sales response to covid-19 and the abovementioned topics. Based on the daily performance trends across product categories, points of sales, regions or channels, fact-based decisions can be made, and priority can be given to the right products and resources. 

Important prerequisites for performance measurement of sales is that staff are empowered. This requires adequate IT tools, regular (even within a day) measurement and continuous feedback. Working remotely without personal contact requires more guidance than usual, more detailed instructions, or even a daily task plan, ideally supported by customer relationship management systems.