A strong stock market often makes salespeople lazy.
Will the Dow Jones index hit 20,000?
That’s the question I asked myself as we welcomed in 2017. I remembered when it first hit 10,000 in 1999 and then continued to rise. And I remembered early 2009, when it dropped by more than 6,000 points. That’s the thing about the economy. It goes up and down.
Now that the Dow has hit 20,000, more questions arise, including the one we’d rather not think about: Is our current year-over-year, month-over-month rise doomed to repeat 2008 and 2009?
I hope not, but history tends to repeat itself. And that could be a problem for sales teams.
Last time the stock market was on the rise, companies hired at an unparalleled pace. Phones rang off the hook. Employees scrambled to keep up with incoming orders. But these weren’t salespeople; they were order-takers. When the economy tanked, they didn’t have the skills to actually sell. So, they lost their jobs.
What companies needed were expert salespeople. (Actually, that’s what companies always need.)
Don’t Pop Open the Champagne Just Yet
Walter Updegrave’s excellent article—“Why Dow 20,000 Is a Meaningless Milestone”—puts everything into perspective, diminishes some anxiety, and actually made me smile. He writes:
To read some of the press accounts of the Dow’s journey toward the 20,000 mark, you could get the impression that you were on the verge of witnessing one of those yes-I-was-there events that people will tell their grandchildren about … Oh, I suppose breaking the 20,000 barrier (if you can even call it that) could provide a psychological lift to stock prices to the extent it makes investors feel more confident about investing in stocks. But any such effect is likely to be temporary …
Even if the Dow climbing to new heights leads investors to believe that the market will continue to rally, stock prices are ultimately determined by investors’ expectations of companies’ future earnings and how much they’re willing to pay for those expected earnings. And while history shows that the stock market does tend to rise over long periods, it also shows that the market can bounce up and down a lot along the way. That volatility is due to changes in investor expectations and their assessments of stocks’ value, not because the Dow or any index has soared above or fallen below some magic number.
Updegrave also gives a brief history of stock market milestones—good and bad—and explains what this means for consumers. Read the rest of his article for more.
What This Means for Sales Teams
Whatever happens, sales leaders have a lot at stake. If the economy tanks, budgets will be cut, and prospects and clients won’t return calls. Even if our economy continues to grow, life will be different.
We must prepare for change by staying relevant, continuing to analyze markets, clarifying our ideal clients, analyzing data, determining how to align sales and marketing, building strong relationships with clients, and preparing for any economic possibility. Above all, the speed of our decision-making must accelerate. Sales leaders must put the proverbial stake in the ground, take a position, share it with their sales teams, and set goals, metrics, and accountability aligned with their position.
Not all sales strategies are recession-proof, but referral selling is. To arm your sales team with prospecting skills that work in good times and bad, check out my Referral Programs for Account-Based Sellers.