Selling in a recession: why it is the justification, not the price, that has to come down

The short answer

In a recession, business customers do not simply buy less. They postpone, bring more people to the table and ask of every expense whether it has to happen now. Responding with discounts means selling for less money with the same effort. What works: secure the existing customer base first, then rebuild the offer around savings, risk and liquidity, qualify the pipeline harder and keep the team together. I have seen sales organisations in weak phases hold their price and still sell. The difference almost never lay in the product, but in the justification for why the customer should act now.

What really changes in a downturn

	Normal phase	Downturn
Who decides	Department or owner alone	One level higher, often with accounting or the bank in the background
Most common rejection	“We are going with the other provider”	“Not now”
Cycle length	As planned	Longer, more meetings until signature
What convinces	Features, convenience, image	Savings, predictability, low risk

The most important point is in the second row. The strongest competitor in a downturn is the status quo. An offer that has to compete against “We will wait another year” needs a different line of argument from one competing against a rival. The question is no longer “Why us?” but “Why now — and why is waiting more expensive?”

Existing customers first: keep them before they cancel

When budgets are cut, customers look at running contracts first. Anyone who calls for the first time since the signature is calling too late. In the first weeks of a downturn, I would actively contact every important existing customer, not with an offer but with a question:

“Many of our customers are looking at their costs right now. Before you do that with us: where can we help you get more out of our product or save something?”

That sounds like giving up revenue, but it is the opposite. A customer who stays costs no acquisition effort, and whoever helped during the weak phase is the first to be asked at the next investment. For recurring contracts there is a further point: whatever goes wrong in the first 90 days after a new deal turns into a cancellation faster in a downturn.

Rebuild the offer around savings and liquidity

A customer who thinks twice about every euro does not want to know what the product can do, but what it brings them in euros and when. That is why I calculate with their figures in the conversation, not with a brochure. An example with freely chosen values:

A new solution costs 150 euros a month and, by the customer’s own calculation, saves 400 euros a month in existing costs. That leaves a net 250 euros a month, or 3,000 euros a year. Every month they wait costs them 250 euros.

This leads to the sentence that helps against “not now”:

“If we do this in spring instead of today, you will have spent around 1,250 euros more than necessary by then. Is that a decision you want to make consciously?”

The calculation has to be honest. Anyone who inflates savings loses the customer at the first invoice at the latest. Especially with products that need explaining such as energy, payment or software, a traceable calculation is the actual sales argument.

The second lever is the form of the offer: rental or a monthly instalment instead of purchase, a smaller entry package, a later start with a signature today. That lowers the hurdle without touching the list price.

A discount is the most expensive answer

The temptation to buy deals through price is strong. Let us work it through with example values: a product brings a 30 per cent contribution margin. If the salesperson gives a 10 per cent discount on the selling price, 20 per cent remains.

	Without discount	With 10 % discount
Contribution margin per €100 of list revenue	€30	€20
List revenue needed for €30,000 contribution margin	€100,000	€150,000

A third less contribution margin per order means 50 per cent more volume just to stand still — in a phase when volume is hardest to come by. On top of that, the customer remembers the price. How to negotiate instead is covered in the article on negotiating price without discounts.

Leading the pipeline and the team

Qualify harder. In a downturn, the pipeline fills up with opportunities that never materialise. I would check every open opportunity against three questions: is there an approved budget? Do we know the person who signs? Is there a reason why the customer has to decide by a certain date? If two of these are missing, it is not an opportunity but a contact. This belongs in the weekly pipeline review.

Adjust activity, do not hide the targets. When the closing rate falls, the same result needs more conversations. Saying so openly and recalculating the activity targets is more honest than quietly hoping for better times.

Keep the good ones. Anyone who cuts commission or redraws territories without warning in a downturn loses first the salespeople who would be hired immediately anywhere else. Remuneration rules in existing contracts also generally cannot be changed unilaterally. Why good people leave is covered in the article on salespeople who walk away.

Action list

1. Call your twenty most important existing customers within two weeks — with a question about their costs, not with an offer.
2. Build an example calculation “cost of waiting per month” for your main product that every salesperson can fill in with the customer’s figures.
3. Define a smaller entry package or an instalment option instead of widening the room for discounts.
4. Before every discount, recalculate the contribution margin and make visible to the team how much additional volume it requires.
5. Clean up the pipeline using the three questions: budget, signatory, reason for the deadline.
6. Recalculate activity targets using the current closing rate and discuss them openly with the team.
7. No change to remuneration without checking the contract and without talking to your top performers beforehand.