Building empathy in an economic crisis
In this week’s newsletter I’m going to show you how you can increase the amount of empathy you have for your customers.
As a salesperson, having empathy is always important, but it is increasingly important during challenging economic times.
Empathy is the ability to understand and share the feelings of another person.
Think of us as consumers.
As inflation soars and we try to deal with increasing energy costs:
If someone talks to us about a cheaper way of drying our clothes or heating our homes then we are open to learning more.
But if someone tries to talk to us about an expensive new car we might get frustrated that this person doesn’t understand the reality we are living in.
And it is the same with companies.
Right now they are only focused on two things.
The combination of these is how they deliver a profit, and if they are a public company, it is how they maintain or increase their Earnings Per Share ratio.
Whether you are selling products or services, to be successful through this period you will need to make a direct and irrefutable connection between your offering and one or both of those levers.
Companies today are asking their own teams a very clear question:
“Can we survive the next two years if we just use what we have?”
And if the answer is yes, it doesn’t matter how snazzy your new app is, or how many beautiful case studies you have - their money is better off staying in their bank account.
So how do you build that direct link between your offering and a company making more money from their customers, or stopping money going out?
We have to get inside their business. We have to understand how it works and the key challenges and opportunities they are facing.
Step 1 - Map out the task
You need to understand who your target customer is. Depending on your territory you might be allocated a specific industry, a size of company, or a geography.
You might be focused on new logos, or on managing existing customers.
Choose a sensible target - whereby a majority of your customers fit within that segment.
Now start to think through what possible information sources you can utilise to find out what is happening in that industry or segment.
Some ideas might be:
Analysts - Gartner, Forrester, IDC all produce regular updates and market analysis. Much of it is paid for, but a some is free, or can be downloaded in exchange for an email address. Check with your marketing team to see if they have a paid licence.
Global Consultants - Accenture, Deloitte, McKinsey, BCG, Bain and Company all have industry specific pages on their websites and their research teams publish regular reports on what is happening in those industries.
Industry Consultants - You will also be able to find smaller niche consulting firms that focus on just one industry or segment. These will have less content but it may be more specific and give insight that you won’t find with the larger firms.
Earnings Reports - even if you sell into smaller private companies, you can learn a lot from their bigger sisters and brothers. Pick the five largest companies in your segment and go to the investor page on their website. Download the latest annual report and the last two or three earnings reports.
You might want to use an industry research canvas to guide your thinking:
Step 2 - What are the big challenges in this segment right now?
You have your data sources, and now it is time to go back to school and pull together a research project.
Open up a Google Doc on one screen, open up your research on another, and start reading. Every time you find a good data point, quote or topic area, note it down in your Google Doc.
I use the comments feature in Google Docs to tag the source so I can go back to it.
As you progress you’ll start to see common themes raised across multiple sources - these are the priorities across the industry.
Optimise for recency - things are moving fast at the moment, so while an analyst report from 2020 might have a lot of data around lockdowns and remote working - they won’t have a focus on high inflation and spiralling energy costs.
Earnings reports are excellent for recency as they get published every 12 weeks.
Optimise for urgency - companies will talk about strategies and challenges that are more urgent than others.
They may have a net zero commitment for 2030 or beyond. This is an important C-level strategy, but it is not critical to whether the company survives the next two years.
Look for immediate priorities - focusing on higher margin products, divesting poor performing businesses, improving productivity of teams and processes.
Across your research you’ll find some challenges that are applicable to many companies and industries, and some that are specific just to your territory - these are important to note.
For example - for any company that manufactures a product:
Russia/Ukraine - this conflict is driving up energy costs which motivates consumers towards lower cost alternatives, and makes it more expensive to manufacture the products in the first place.
China - continuing partial lockdowns have disrupted supply chains making it harder to deliver on orders placed, and any companies selling into China have seen demand dip.
Currency fluctuations - the relative strength of the US dollar over the last three months have meant anyone buying input materials in dollars but selling in other currencies has had an impact on their margins.
These are just three examples of what is happening inside the company you are selling into. This is what their CEO is focused on, and your ability to connect what you do to these types of challenges is what will get their attention.
Your solution is not going to solve geopolitical or macroeconomic issues, but one level below that your solution is going to help them to get more money in from customers, or stop money going out.
Step 3 - Who in your target customer is responsible for solving these problems?
Having dialled in on some specific strategic challenges that you can help with, you want to understand who is ultimately responsible for solving them, what else they are focused on, and how these problems ranks in their list of priorities.
You might be selling a marketing automation platform, and your target audience might be the CMO.
They will be receiving pressure from the CEO - “we need to get more quality opportunities into the sales funnel, but we can’t just keep spending money on paid advertising.”
Start to think through the role of that CMO. What else have they got on their plate? What would you do if you were in their shoes? How important do you think the problem you could solve is in their list of challenges.
Could they survive without solving the problem you are linked to?
Step 4 - What other options does the customer have for solving this problem?
The final part of the process I go through is to consider what other options the customer has to solve this problem. They broadly fit into two buckets:
Do nothing
Use a competitive solution
In today’s market your biggest challenge is the customer that says “do nothing” - they keep their money in the bank to support their balance sheet or use it on other projects they deem more of a priority.
Here’s where you can bring all your research together and really put yourself in the mind of your customer.
If I was the customer - what would I do?
Consider some other questions:
Why is your solution perfect to solve the customer’s problem?
Why is your solution not perfect to solve the customer’s problem?
How do customers find out about solutions to this problem?
What do you know about this problem that your customer doesn’t?
What does your customer know about this problem that you don’t?
What problems does your solution not solve?
What new problems are created by solving this problem (integrations, training, implementation?)
Look at the do nothing option with real understanding. Why might this be a good strategy for the customer? What would this mean to the business (think make more/spend less)? What would the personal impact be on your target customer?
Step 5 - use what you have learned in your outreach, discovery and presentations.
Through this process you have coached yourself on the challenges that your customers are facing right now.
You are starting to see the world through your customer’s eyes and not your own. This is empathy.
You are not an expert, but you are way further ahead than most salespeople who are pitching their product with no real understanding of the customer's world.
For me personally, I like writing, and so I turn that research into an industry point of view that I can publish and use to share my perspective with customers.
If you don’t like writing, share your research with the marketing team and they will no doubt love to write it up for a company blog post, graphic or datasheet.
However you share it - make sure this valuable research doesn’t stay inside your own head - your customers will appreciate the effort you have put in.
Here are two examples that I’ve recently published - one on manufacturing and one on life sciences.
There you go. That is my five step framework to building empathy for my customers in an economic crisis.
I hope it helps you to get inside your own customer’s mind.
See you next week.
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