Darren Bezani is a prominent figure in the fields of sales psychology and business performance. He is the CEO of Salecology, a company that applies behavioural science to enhance sales growth and business profitability. In this issue, Dan provides his advice on how businesses should best prepare themselves for an economic downturn…

So what exactly does it mean when the economy falls into recession?

Since World War II, we have seen an economic recession take place on average every 5 years, and they last approximately 18 months. An interesting statistic is predominantly given to us by the financing industry as they look at when the bear markets start and stop and when we enter a period of expansion. From a sales and business perspective, I am not sure we see it as clearly as the stock market, but we do find times when it is harder to make sales.

How does it affect small businesses?

The reality of a recession is that it just gets tougher. Companies’ batten down the hatches, lay off employees, freeze spending, and overall just make doing business hard. That said, when you look at GDP, it usually only drops somewhere between 2 and 5%, so people are still buying; it is just that the ripple effect is felt a long way down the food chain. It is the fear of what might come that drives behaviour, and customer pessimism creeps into the everyday psyche.

Is it always a negative event? Can there be opportunities as well?

It is easy to accept that during a challenging economy, people would rather stick with what they have or’make do’ with things as they already are. But here’s the thing: while a slow economy does present challenges, it also offers unique opportunities for those willing to look beyond immediate threats and envision long-term potential. In essence, psychology shows us that people enter a state of loss aversion during a recession. They want to mitigate the losses and also protect what they have. For companies that can demonstrate to customers where they are losing (time, money, efficiencies, etc.), they will be more likely to create new business opportunities.

Why do you think we’ve been sailing close to recession over the past few years?

You know what? I think it is just time. We have one every decade; we can point fingers at Brexit, government, politics, and external events like wars, and of course these all have an economic impact, but history has taught us that every so often the world needs to take a breath. I know this isn’t an economical answer, but it does seem to be the circle of life.

How could this all have been avoided in terms of government policy?

I think every government in the world tries to combat recession through their fiscal policies by pumping money into the market and increasing taxes and interest rates, and I think it does ease it and slow down the rapid rises in pricing. We have seen the UK be quite successful with this lately, as the inflation rate rose quickly and has now dropped back down. But in reality, there is nothing a government can do to avoid it completely, especially as it is affected by a lot more than local economies.

Tell us more about what you mean by businesses ‘fight or flight in a recession?

There is a part of our brain called the amygdala, which is built for safety and thus controls our fight, flight, or freeze mode. Interestingly, businesses have what I call an organisational amygdala, which triggers during turbulent times. Fight, let’s trade hard through this; Flight, let’s cut our losses; and Freeze, let’s wait and see what happens. In psychological terms, this is also called status quo bias, as they want everything to remain the same.

When companies do decide to act, it will usually be focused on shrinking rather than growing and involve cutting costs, laying off staff, and suspending all projects. Customers aren’t looking to buy during a downturn and will often batten down the hatches. When organisations have this ‘Loss Aversion’ mindset, doing business with them can be very challenging as they are reluctant to spend money and try new products and services.

How can a small business owner motivate themselves during a downturn?

Maintaining motivation in business for yourself and/or for people working for you is a must, especially in tougher times. The thing to keep in mind is that there are two types of motivation: extrinsic and intrinsic. Extrinsic motivation is about external motivations, and as a business owner, those are often linked to either revenue, profit, more customers, more sales, etc. When times get tougher, these external drivers might be going in the wrong direction. Intrinsic motivation is about internal factors that motivate us. Intrinsic motivation comes from within the individual. It is driven by personal satisfaction, interest, or enjoyment in the task itself.

For business owners and their staff, intrinsic motivation might be derived from the pleasure of connecting with new people, the satisfaction of helping customers solve problems, or the intellectual challenge of innovating new products. In the face of economic challenges, a business owner’s intrinsic motivation becomes their anchor. It’s their inner drive that compels them to pursue their goals, regardless of external rewards or pressures. This self-sustained motivation is fuelled by personal growth, mastery of the task, and the inherent satisfaction derived from the work itself. By focusing on personal development, setting achievable goals, and finding fulfilment in the journey rather than just the destination, business owners can maintain a strong internal focus on control.

Why is cost-cutting not always the best strategy during hard times?

Businesses often cut costs as a way of attempting to maintain profits. This can, of course, work, but often it can lead to a false economy. If work is drying up, do you lay off staff and reduce the overheads?, or do you refocus the team to drive more sales?, innovate new products, etc.? I have seen and worked with many companies where, during a recession, they focus their energies on ensuring they come out stronger, not weaker. Remember, a recession usually lasts only 18 months. It feels longer because companies are slow to come out of them. They have fewer resources, fewer staff, no new innovation, etc. to kick-start business growth again, and therefore they lose years, not months, in the process.

Of course, businesses need to be sensible, but all the companies I have worked with that go into fight-not-flight mode, come out of the recession first, and are the strongest, Equally, their customers seem to feel more confident in continuing to do business with them during the recession, as they definitely continue business as usual.

How can a business owner improve their interpersonal and soft business skills?

This is a tough question and too broad a brush stroke to answer in detail. The long and short of it for me is to understand emotional intelligence and use it. For me, business owners need to understand how to influence other people’s emotions. Too often, they spend their time on the intellectual aspect of the business, such as products, services, features, functionality, benefits, etc., and therefore want to tell people about them. To have more interpersonal skills, they should focus more on how they want the other person to feel and engage them that way. 

Emotion creates motion; when someone is emotionally engaged, you have a long-term customer.

Do you feel there is enough support for small businesses in an economic downturn?

The challenge for support for small businesses is knowing what support they need, as each business is different and has different requirements. Financial support, technological support, skill development, and insight are all areas that need support. I think the real value for small businesses in an economic downturn would be helping them find new customers. If they have customers and money coming in from new business, the rest of the business can be taken care of.

What are the secrets of an effective sales strategy?

The secret of an effective sales strategy is emotional engagement. No matter what the business is selling, the customer has an innate belief that if they go online, they will probably find it somewhere else and cheaper. So if they are in the market to buy, they are looking for someone they like and trust to buy from. This isn’t rational; it is an emotional connection. Therefore, the sales strategy needs to be focused on demonstrating that level of trust, building rapport with the customer, and giving them confidence in you.

However, we are in a recession, so people don’t want to spend money unless they need to, so the sales strategy is still about emotional engagement, but this time it is about reframing the customer’s mind about what they need to do. The old world of asking customers questions to find their needs and then selling features and benefits is gone. The sales strategy is moving more into a tell, not a sell, challenging the status quo, and showing the customer where they’re leaking and how to plug those gaps. This engages their heart and mind and therefore drives better sales.

How important is understanding customer psychology and consumer behaviour?

As you can see in everything I have said up to now, it is imperative to understand the changes in behaviour when we are in buoyant times and in tougher climates. People will make decisions in a very different way. When times are good, customers are willing to try things out and give them a try; they are more experimental, but in tough times, they become risk-averse and therefore want tried-and-tested solutions.

Understanding customer psychology also helps to modify the way to approach the customer and how to influence them. Knowing if your customer is more big picture and gregarious means that your engagement will be upbeat, high-level, future-oriented, and ‘jazz hands’ which will be fun and energetic. This will be true in emails, face-to-face meetings, presentations, etc. Turning up with them and making a presentation that is slower, reflective, detailed, and gradual based on the pragmatic solutions of here and now might be the right answer, but it will turn them off and be totally unengaging. Equally, the reverse is also true. Take someone who is more thoughtful, pragmatic, and detail-oriented; they would find the upbeat, big-picture ‘jazz hands’ to be totally untrustworthy and aloof. So getting this right in 1-1 communications as well as in marketing communications is highly important.

Tell us more about your new book, ‘Salecology: Dominate in a Downturn’…

My new book, Salecology: Dominate in a Downturn, provides a comprehensive framework that businesses can leverage during tough economic times. It unveils a pioneering five-force model that equips leaders with the critical strategies needed to flourish during economic challenges.

Embracing a disruptive mindset, insight agility, distinctive dominance, client centricity, and emotional intelligence provides a blueprint for businesses aiming to not only survive but significantly grow and scale in an increasingly competitive market. It shows how businesses of any size can modify their sales approach to engage customers and demonstrate why they are distinctively different and why they should buy from them.

What made you decide to write a book?

We have seen some tough trading periods almost every decade since 1980, and I have seen my fair share, having sold through the one in the late 80s, then the dotcom boom and bust. I have driven growth through the financial crisis that started in 2007, and then helped many clients pivot and win during the pandemic, so I thought it would be a good time to create this book, which captures my learnings on how to win in a slow economy, taking lessons from the past, but also sharing what companies are doing right now to continue to grow and dominate in a downturn.

Which businesses do you see as the best examples of having an effective sales strategy?

Some of the great sales strategies lately are more in the technology space. Services such as salesForce.com have been adept at creating communities and nurturing brand advocacy, focusing on their users and developers. Their approach is centred around the idea of creating a shared space where users can engage, learn, and contribute. It is not directly related to their product, a CRM system, but creating advocates who emotionally engage with the solution, not the product. Salesforce as a CRM software platform also doesn’t really have any unique selling points within the product. Salesforce’s approach: they didn’t just offer a cloud-based CRM; they created an adaptable ecosystem that allowed for unparalleled customisation. This adaptability became their competitive edge, their DSP (distinctive selling point) that set them apart.

Which entrepreneurs do you most admire?

You know, my current admiration goes to Amit Bendov, CEO and co-founder of Gong. Amit launched Gong as a father of two at the age of 57, and over the past 8 years, he has grown the business to a valuation of over $7 billion. I am also watching Steven Bartlett more at the moment, enjoying his ventures, and becoming a regular listener to his Diary of a CEO podcast.

How do you like to unwind after a busy day?

I’m not sure I do. I used to play rugby when I was younger, but I am now a keen student of the martial arts. I am a sponsor of a Div. 2 ice hockey team and a Div. 3 football team, and I am looking to take a stake in an off-road racing team. So watching sports from the sidelines is a good way to unwind.

What are the all-time best sales motivation songs on your playlist?

Eminem, or losing yourself, is always a good energy kicker. I do have a playlist on my phone called Money, Money, Money, and that is full of sales motivational tracks, but I am not sure “you’ve got to pick a pocket or two’, sends the write message to the reader! Also on the musical theme, ‘If I were a Rich Man’ always gets me smiling and humming. You know, The Ojay’s ‘For the Love of Money’ is always a good tune to conjure up some energy and was famously adopted by The American Apprentice TV show.

How do you see the business landscape shaping up over the next 5 years?

I think the next 5 years will be a great place for small businesses and will continue to make it harder for the bigger organisations to differentiate themselves. Today we can build a business so cheaply—pretty much all the technology is free or extremely cheap—and as AI continues to evolve and generate a lot of the heavy work, a small business can compete on the world stage. Having hundreds of staff and numerous offices around the globe will cease to be a competitive advantage, and the smaller, more personable, niche players will become the competitive advantage.

Lastly, what is the one piece of advice you can give a struggling new business start-up?

Focus on customer engagement. Consider the problems your customers have right now and what they need to do to fix them. Look around and see what others are doing to fix it, i.e., the things they are doing, not what they are doing it with (it is not about a product or service, it is about the functionality). Then package that insight and share it with the customer. Educate and show the customers where their leaks are, show them how to plug the holes, and demonstrate how to improve their business with your tools, products, or services.

For more information on sales training courses and sales science from Salecology, please visit salecology.com.