“The winds of grace are always blowing, but it is you that must raise your sails.” –Tagore, 1913 Nobel Prize Winner
When I was a kid, my dad had a small, 24-foot sailboat we’d take on seven-day trips down the Chesapeake River. I was one of five kids but the only one who had any interest in these excursions, so it was just him and I out on the water, sailing up and down the bay from port to port. Sometimes, we’d stay in a fancy marina like St. Michaels. But mostly, we’d find a safe cove, throw the anchor overboard, and spend the night sleeping right there on the boat.
Sometimes, the weather and wind were excellent, and we’d have an exciting day, making great progress toward our destination, trawling for fish off the back of the boat, or simply sailing the thing as it hummed through the water. I’d sit at the bow of the boat with my feet dangling in the water, clinging to the railing and watching stingrays and other fish swim by. Other times, there was wind but also clouds and rain, making for a dreary day. We’d sail anyway. Often the wind was against us, behind us, or blowing in the “wrong” direction, sometimes shifting, and we’d have to set the sails to accommodate those conditions. Still, we’d sail.
But the worst times were when there was no wind at all, and we’d bob around like a buoy on the waves, broiling in the sun. During those days, I’d beg my dad to turn the engine on so we could at least get to some port for a meal and a swim. I can count on one hand the number of times he gave up, stubborn sailor that he was.
The economy we’re in right now reminds me of those grueling, hot days when there was no wind and nothing to do but sit and wait with the sails up, hoping to catch a breeze so you could actually make some progress, eagerly waiting to get around the next point of land with the anticipation that the wind might pick up once you got around it.
This recession is unlike any others that have preceded it for a number of reasons, so it’s truly anyone’s guess as to how long it will last and how bad it will get. The good news for me is that this is not my first run around the recession track.
Back in 2008–2010, I watched thousands of small IT shops shutter their doors; nearly 30% of our list ended up closing, getting a job, or going into early retirement. The rest just weren’t spending anything — a rough time all around, indeed.
From my experience, there are three key things you can (and may have to) radically change when times get tough.
Of course, there is one more option that eliminates the need for ALL of this. If you’re independently wealthy and don’t mind your business going backward right now, you could choose to do nothing but hunker down and hibernate for a while. That is an option, and some who are not wealthy will take it. They’re too timid to do otherwise.
But if you cannot withstand a 20%–50% dip in income, or, like me, the thought of going backward grinds your gears, then you’re going to need to heed my advice and get ready for a rather frustrating, annoying ride as you muck through the recession swamp.
Because here’s the maddening truth: For who knows how long, you will have to invest more, create more, do more, and be more creative than you’ve ever been and generate less than you’re accustomed to. It will take more work, diligence, effort, and time to get mediocre, possibly barely acceptable, results.
If you’re like me, you can resent this all you like. And I do. We were coming into 2020 on fire with insanely good profitable growth that was hard-earned from a year of intense work and planning that was just starting to pay off. Then POOF. Gone.
I had a client tell me he had $600,000 in signed projects ready to go when COVID-19 hit and then had it instantly pulled back. Maddening. I personally had to refund close to $650,000 in closed business — money collected and honestly earned — when COVID-19 shut down our event in March, just three damn weeks before we were to go live. A whole year of work gone.
But here we are. Hate it, resent it, get mad at it all you like — it’s not going to change the economy. All we can do now is adapt and change our approach, knowing that, at some point in the future, the wind will pick back up again and the effort you put in now will pay off even greater. Now, let’s talk about what to do.
3 Major Changes You Might Need To Make BEFORE You Start Marketing
When money dries up in a recession, as it has recently, there are three major decisions you need to make before you go gung-ho with a smarter, more sophisticated, and aggressive marketing approach. This is even more important right now, with certain industries being hit harder than others.
1. Change WHO you sell to.
2. Change WHAT you sell.
3. Change HOW you sell it.
For some of you reading this, the industry you focus on may have been decimated, making it essential to change WHO you sell to in order to survive.
One client of mine went from a solid million in recurring revenue to zero in a few short months because his predominant niche was hotels and event venues. You can’t collect money when they have closed their doors, have fired everyone, and aren’t answering their phones. No marketing campaign is going to fix this. If you’re serving a hard-hit industry like this, reread the last sentence again.
Often, clients (like the one I just mentioned) call me up looking for a campaign that will get the money flowing again. They want to know what they should be selling that will get their customers buying as they did before. It’s the wrong approach. You can’t get blood from a stone. A bigger, more sophisticated bucket won’t be any better than a broken-down old bucket at getting water from a dry well.
Dozens of businesses outside of the IT industry are facing this, as well, and not just due to the shutdowns. Cities like Seattle and Minneapolis are losing businesses that had their buildings looted and burned to the ground; they’re changing their “who” by moving to the suburbs or another city altogether. Nashville, the city I live in, has seen an uptick in people moving here from cities in the northeast due to the extensive shutdowns and restrictions put in place by their mayors and governors.
If all or a large percentage of your clients have been shut down and are not recovering quickly (such as entertainment, travel, and hospitality), then the only option — the smart option — is to quickly change your niche and start aggressively selling to another industry if you cannot wait it out.
The second major change you might need to make is to change WHAT you sell, providing an antidote to NEW problems or what ails them right now. For IT services, you’d be crazy to not rename and repackage your services to appeal to businesses that need to continue to help remote workers stay productive and secure. That might not be a “sea change” of services but a little tweaking and renaming.
The mouthwash TheraBreath is taking out full-page ads in magazines with the headline “Stop Mask Breath.” Has anything changed in the product? Nope. But it’s being positioned as the solution to a new problem. My dermatologist has successfully promoted treatments and bundled products to end the acne caused by wearing a mask all day. She’s cleverly named it “maskne” to draw in new patients and get money flowing again.
When the pandemic shut down our event in March (RobinsBigSeminar.com), we didn’t cancel it but changed the delivery to 100% virtual. We changed the what, not the who. That quick thinking allowed us to salvage a couple million dollars, not to mention the relationships with our sponsors and clients alike. It also allowed us to create a new service offering a virtual event platform that has taken off in sales not just to this industry but also to multiple industries outside of IT. (We’re currently flooded with referrals from our clients who belong to various local industries that are looking for such a solution.)
I have a client who recently started selling a facial recognition technology that simultaneously 1) checks people into a building, 2) scans their temperature for a fever, and 3) checks to see if their face is covered with a mask. If those things aren’t all in check, they are not permitted entry. He’s selling it like hotcakes to schools that have a number of kids and people coming into the building who need to be scanned and checked in quickly. Of course, this product is not his long-term goal, but he’s using it to generate revenue and get clients he can continue to sell to with the goal of evolving them into managed services clients. Very smart.
Should you drastically change what you sell? Maybe. You might just need to change how you are promoting what you already do.
Right now, money is flowing in IT, but it’s only flowing for what is considered essential or necessary to keep businesses running. If your service is viewed as essential, you just need to get it promoted to more prospects.
Overall, you want to also make sure all of your services are positioned and promoted to do one or more of these things:
- Cut costs (outsourcing versus in-house IT staff, cloud, automation of legacy systems, etc.)
- Reduce risk (cybersecurity, compliance, security of remote workers, etc.
- Increase productivity and operational efficiencies (Microsoft Teams, VoIP, remote workforce, monitoring of employees, etc.)
- Increase revenue, profits, and/or provide competitive advantages (CRM, replacement of legacy systems that don’t work out of office and/or require manual labor, etc.)
Since the shutdowns, many of my clients are crazy busy trying to fulfill on VoIP phone systems, Microsoft Teams, and remote workforce solutions to clients who have been forced to send employees home. These solutions are continuing to sell given that many businesses fear a second wave of shutdowns in the fall and winter, when flu season comes back around. Another hot seller is cybersecurity, or more specifically, secure remote workforce solutions.
I have also had a number of clients tell me they are getting sudden, random inbound leads of clients wanting to buy a managed services contract because their current MSP is failing to support them. This is the silver lining for many — the small, weak shops are going out of business.
We’ve seen a 500% increase in the smaller clients and prospects closing their doors. All have been sub-$500,000 in revenue and are largely dependent on other micro-businesses delivering break-fix services.
Finally, change HOW you sell it. Another good thing that’s come from the shutdowns is that many of our clients have discovered they can successfully close sales with new prospects and clients alike using Zoom and remote meetings. They are using webinars like crazy to generate leads, and they are successfully using content marketing to drive traffic and opportunities to their websites.
Many of our vendors struggled a lot with selling virtually early on. Their entire sales model was dependent on in-person event sales, something they repeatedly told us when we informed them of the event going virtual. As I’ve said elsewhere, the most dangerous number in any business is “one.” One way to get clients, one way to generate leads. One good sales rep. One good tech.
When in-person sales events were no longer an option for the sponsors, they were forced to learn how to sell in a virtual world or go without the new clients. I’m happy to report that many who successfully made the change, like Galactic Advisors, Nerido, ID Agent, and Lionguard, actually did better at the virtual sales event than they would have in person, generating more leads, conversations, and clients. Others simply could not figure it out and suffered. They were stuck in one mode of selling.
Exactly How Much Of The Well Has Run Dry?
As I said earlier, you are going to have to work harder and with more intensity to get the same results in marketing that you were getting pre-shutdowns. Money is going to be parked for a while, and with the current unemployment rate at 10%, many businesses are not going to be rehiring or calling back workers or rapidly hiring — that impacts your managed services contracts due to the contraction of the workforce.
However, it has definitely not all dried up.
It might interest you to know that my clients who actually do marketing and report their KPIs to me — my Producers Club members — have seen their lead flow and new client acquisition go down 24%, active clients go down 3%, but sales go up 7%. Given that most of the MSPs in the industry are down or flat, that’s solid.
Further, you should note that it’s down by only a quarter and has not fallen to zero. One of the dumbest things I hear coming from people’s mouths is the word “nobody” when discussing what they are actually seeing in the marketplace:
- Nobody is in their office right now.
- Nobody is answering their phones.
- Nobody is getting direct mail.
- Nobody is buying.
Nuts. We initially and temporarily saw a dip in leads and purchases for our flagship program, The Toolkit, back in March and into April. A few of my sales team tried the “Nobody is answering their phones and all the calls are going to voice mail” excuse with me. Since we track everything, and given that I don’t come to conclusions based on feelings but on facts, I pulled a report and showed them we had experienced only a 2% increase in the number of times we got voice mail over the shutdown period versus all of last year.
Here’s the truth: You see what you expect to see.
So, if you want to convince yourself that “nobody” in your area is in their office, answering the phone, reading their direct mail, or responding to marketing, you’ll be exactly right. Worse yet, you’ll do no marketing, no selling, and make no effort to combat the inevitable shrinking number of opportunities. Shame. I am reminded of Pogo’s comment: “We have met the enemy, and he is us.”
Want help in marketing and growing your business right now? Go to: https://itrecessionrescue.com