Many of us like to think the economy has recovered and is flourishing after the recession. While various aspects have improved, a study we have conducted at Mereo for the past four years appears to say something many others are not—businesses are not thriving.
Mereo’s annual revenue performance index of Fortune 500, Global 500 and Russell 2000 companies for the 2016 and 2017 fiscal years uncovered similar trends to reports of previous years — which has been trending similarly since the recessionary period of 2007 and 2008 —underperformance on the top-line.
There was some improvement in performance from last year but still a relatively small percentage of companies can claim strong revenue performance. For instance, nearly 48% of Fortune 500 companies actually shrank last year (compared with 51% the year before) and nearly 67% of Global 500 companies shrank (as compared with 73% the year before). The somewhat brighter area was in mid-size companies, where a comparatively small 29% of companies shrank this past year.
Thinking about strong growth defined as over 5% revenue growth, we found that only 17% of the Global 500 companies, 25% of Fortune 500 companies and 47% of mid-size companies met this hurdle.
So for the fourth year in a row mid-size companies outperformed their larger counterparts, while the Global 500 performed the worst.
While this news seems dismal, it offers insights and opportunities to B2B sellers.
Four tips for B2B sellers in today’s economic climate
1) Craft value propositions around productivity and cost-reduction. These messages resonate with buyers. Express that you are equipped to help buyers enable new revenue streams, as opposed to only improving existing streams.
2) Engage prospects around revenue growth benefits since new streams of revenue are more easily quantified than increases in existing streams. If a seller has a solution that both reduces the costs and enables new revenue streams, they are in an excellent position in today’s market to hit the two prominent value drivers.
3) Initiate conversations with prospective buyers in terms of their current revenue and profitability environment. Buyers care more about how you sell than what you are selling. If you can demonstrate an understanding of the current economic environment and speak to their current pains, this will differentiate you from the 92% of sellers (Forrester) and position you as a valued partner to the buyer focused on solving their problems versus a sales representative focused on achieving your monthly quota.
4) Seek to serve, not to sell.Understanding the needs of buyers and seeking to serve them, right where they are, will set you apart in these interesting financial times. Take the time to listen to buyers and understand what is keeping them from healthy revenue performance; this is the most important thing you can do. Once you are able to identify their pain points, you can discover the best steps forward for their growth. These steps may not always include your solution, but their success is your success.