Economic recessions come and go. A nasty one just ended, as noted in part by the terrific run-up in equities since March and third quarter growth in the GDP. It doesn't feel like the recession is over, however, because unemployment statistics continue to rise. Truth is, unemployment figures always go up in the initial stages of an economic recovery. Labor markets are a lagging economic indicator and often the last to show signs of recovery.
OK, that's enough Labor Econ 101 for now. I opened this month's column with a light dose of labor economic theory to point out that all recessions end and a "new normal" always appears. If history repeats itself, the new normal will appear sometime next year when businesses of all sizes will once again start adding head count. This will be particularly apparent in small to medium-size employers, where most jobs are created. Commissions and fees will grow again when labor markets improve. Forget about this fear-mongering stuff you hear on the news about a jobless recovery. We hear that nonsense in the initial stages of every economic recovery. Buck up! Start your sales planning now for making money in the soon-to-be-revealed recovery in labor markets.
Start strategic and tactical planning now, while you are putting your fourth quarter and 1/1 renewals to bed, for a banner year of selling in 2010. Here's what I see in the crystal ball for you. Let's start with some number crunching on what hiring may look like in 2010 compared to a dismal 2009. Take a look at the chart accompanying this article. These recent data tell us which industry sectors will be hiring in 2010 and how much. What stories, tools and added value can you bring to these industry sectors?
The new normal will accelerate a trend we've seen for some years now - employment declines in manufacturing and growth in service-oriented jobs. While this snapshot of data presents a mixed bag, it does hint where you should concentrate your selling efforts. History tells us that these industry sectors will add more jobs as the economic expansion picks up steam into 2011 - a mere 13 months from now. Do not sit on your hands until 2011; great selling opportunities will definitely appear before then.
Phase one
Selling into this recovery requires that you sensitize your sales presentation and approach to new prospects. As an employer's financials improve, the CEO becomes aware that staff members are working harder and putting in longer hours. Customers are placing more and bigger orders. The CEO will not, however, open the door to new hiring yet because he or she is not sure if this is a false economic start or the real thing. This early-stage recovery will go on for a few months until it becomes obvious that the first stage of the new normal has occurred. This is the point in the economic cycle where the CEO will start hiring again.
Decision makers are looking for cost savings in the first phase of the new normal. Are you surprised? The CEO is focused on top-line growth in the first phase of recovery, but management of the bottom line still dominates his or her recession-era thinking. The CEO will be very receptive to solicitations that can save money in benefits to the bottom line. That spells growth in high-deductible health plans, HSAs and HRAs. It means good times for those selling Section 125 arrangements, particularly FSAs and DCAPs under Section 129. Voluntary product sellers should have a bonanza next year because these products satisfy employee needs without affecting the employer's bottom line. Sellers of 401(k)s, 403(b)s and other cash or deferred arrangements should also see a pick-up in their sales production, provided the financial markets continue to rise and the fixed income markets don't implode to a drastic rise in inflation caused by our monetizing of the national debt in 2008 and 2009. Don't lose sleep over the inflation fear right now since this recently passed recession cut so deep that we have tons of capacity to fill before inflation can become a threat. Start selling DC plans now with gusto.
Selling in the first phase of the new normal calls for a sales approach and product presentation that is totally focused on saving your prospect or client money. Your approach to the sales call is crucial at this point. You have to be the savior and project a demeanor that you understand the skittish behavior of your buyer. You have to project calm, encourage your buyer and be confident.
Phase two
The prelude to a quicker uptick in hiring - and your commissions - will be when you see lots of 'help wanted' ads for corporate recruiters. The hiring of recruiters is a very reliable gauge that CEOs feel confident new employees are needed. It also signals the beginning of the second phase of the new normal: broad-based business growth. You will start to feel better about your career at this point because you will see organic growth return to your book of business.
Shift your sales presentation from cost saving on insurance products to a larger value proposition. Become the consultant who can help your prospects with other areas of their business as they grow. I'm an evangelist on selling around the core disciplines and you should be too, because it works like magic.
Phase three
The economy is now in full swing. Hiring is booming. Labor shortages are widespread. Remember trying to hire people in the late 1990s? Those fundamental demographic underpinnings are still in place and will rear their ugly head in phase three. Your mindset, and that of your clients, will change dramatically in phase three as the economy roars on and a peak in the economic cycle draws nearer. Your game plan will be to help your buyers attract and retain qualified employees. How do you do that? Hear me carefully now. Buyers purchase what you sell them, not necessarily what they want. If you haven't sold anything, buyers don't buy. Sell the solutions of the products you sell. Don't sell rates. Hold your customer's hand on HR or find someone who can. Your competitor does not do this well. Learn a few deep facts about compliance and create fear in your buyer. Your competitor does not do this with focus, depth or conviction. Fear motivates employers to buy. What will you bring to the buyer? Your buyer wants good things. You are the candy man who brings good things.
In phase three, your buyer will have changed in other ways besides the mindset. After a recession HR people become generalists in a macro sense. Except for the large companies, the term "employee benefit manager" is becoming extinct because of the rise of HR generalists. These HR generalists are usually overwhelmed by the sheer volume of complex work across the core disciplines that they have waiting on their desk each morning. The double whammy is that many HR people are undereducated or lack training in what has become a sophisticated profession. Sadly too, HR managers are increasingly influencers instead of decision makers, so be leery of spending much time with these folks unless you cannot find someone farther up the food chain.
Selling value is the game plan in phase three. It is the new normal because time marches on and recessions have a way of accelerating the need for firms to be productive, acquire new technology and innovate new work processes, products and services. Tailor your sales presentation to these phenomena by adding value to every part of your buyer's organization that you can.
Addiction selling
I'd like to introduce a new concept here that you may find objectionable. I apologize if I offend you. Shocking you is not my goal. See past the violent imagery I'm about to describe and you'll learn a powerful selling concept that you should practice through all phases of an economic cycle. It will help preserve your book of business in good and bad times. It's called addiction selling.
Addiction selling will make you a great seller if you master its subtle tactics. Your buyer wants to feel good about you. Get your buyer addicted to you, and especially everything you offer. Everything we've talked about can be reduced to goods and services that act like a drip into your customer's arm. He loves that drip. Each time you call on him, you turn the drip up a little more by adding new value. Your customer loves the feeling of you bringing more value to him. You need to have much to offer or addiction selling does not work. If all you have is a rate, you won't have enough in the drip to create the addiction you want. Remember, each time you show up, you give more perceived value and turn up the drip. You get your customer addicted to you. You want your buyer to know that if he fires you the apparatus is removed and the switch gets turned off. This will cross your buyer's mind and losing you will not make him happy. Addiction selling will help carry you through the next recession.
All good things come to an end, including economic boom times. Eventually the economic expansion that has already begun will peter out and a new recession will grip the economy. In the meantime, though, you will have another golden opportunity to sell lots of group and a mix of product lines. You will create new wealth.
Davidson, Principal with the Wisconsin-based Davidson Marketing Group and founder of the FutureOffice Broker Sales Network and Sales RockStar, can be reached at craigd@davidsonmarketing.com.
