Why Cutting Sales and Marketing is the Worst Thing You Can Do

Hello and welcome to the show. Before we begin, the usual apologies, I am not recording in my audio booth today and it's a full house. And at the time of this recording, the Olympics still on. And so everybody's just having a blast. So wifey watching Olympics, the kids watching Olympics, even though there's the protest, the end bad governance protest going on in Nigeria now, some people are still getting carried away with Olympic fever.

So yeah, if you hear noise in the background, people shouting, people clapping, that's just wifey and the kids enjoying themselves watching the Olympics. Yeah. So OK, yeah. So we did two detours yesterday. The day before we did 2 detours. So now we're going to be back on things that cause your sales performance to slump. And so today we're going to be looking at market related issues that cause your sales to slump and what you can do about it.

And I think must have been last week we looked at people related issues. That's when the sales people had the problem for why sales isn't moving and then why you have the problem, why sales isn't moving. In case you are the sales manager or you're the business owner, because it isn't always the problem of the sales team. Sometimes the problem is with you, dear business owner. Then after people related problems, we looked at process related problems.

Whether you know you have a sales process, whether you guys use your CRM properly, that's a customer relationship management tool. What else, I can't remember, but we've, we've, we've done a bunch so far. I remember for sure that we've done people and we've done process. So today we're going to look at market related issues. Now, this is one thing that I am going to say for those of you who are tired of me saying everything is your fault, you'll be happy to note that this is one thing you really can't do anything about market related issues.

Actually, this is one thing that is not your fault. Macroeconomic issues, it's not your fault. I mean, who the president is, what the president's policies are, whether there's a war, whether there's inflation, you can't do Jack about it. Political issues, it's not your fault, except if you didn't vote in the last election like I did. But you can't really say it's your fault. So for those of you who are tired of me saying that you should take responsibility for everything in your business,

then you'll be happy to note that on this one, I give ground. I concede. When it comes to market related issues, it's not your fault. It's the macroeconomic environment, it's political issues, it's fiscal issues, it's all kinds of things. It's not your fault. So when it comes to these sorts of things, market related issues, it's mostly about waiting out economic cycles because you speak to anybody who is knowledgeable about these sorts of things, whether it's your uncle who's been in business since 1968 or whether it's your professor, if you're still in school, they tell you that these things come and go,

you know, cycles, they come and go and it's normal. So at the time I was born, there was the, at the time I was born, there was the depression, the depression of the OK, well, not depression, but what's it called? Global financial crisis, you know, like around the 80s. And then by the time I was in like secondary school ish, there was the issue with structural adjustment programme in Nigeria. And then military era came and went and what basically it's,

you know, it's just it comes and goes, depression and then boom and then depression and then boom and then depression and then boom. So if you talk to your uncle who's been in business since 1968, he would say, look, young man is Nigeria. This is how things have always been. Things will go up and things will go down. What we do is we wait and we plan, so there's nothing you can do. There's more thing about waiting out, excuse me, trying to recognise the economic cycles and to try and wait them out.

Also to engage in business habits that are going to give you momentum when the business cycle changes or when the political cycle changes or when the economic cycle changes. Now, why should you bother with this optimistic attitude? Because after all, what's the reason for being optimistic? The reason why we should engage in this optimistic attitude is because if you're pessimistic, sorry, pessimistic, how is that going to help you?

Being pessimistic is not going to help. And what we're trying to do is to give ourselves a chance to survive and a chance for the business to survive. So why not just assume that things will turn around and then start making business decisions based on that hope and engaging in habits that will help you eventually when things start turning around. The only time when it helps to be pessimistic is if you're already a millionaire or you're a billionaire or you're a hard net worth individual who likes doing technical analysis and you make your money by shorting stock.

So you know, our own George Soros and all those type of people, you know. So that's how they make a living. That's how they make a killing. They wait, they see that things are going bad and they make it better that things will go even worse. And then they take the short, that's what it's called you shorter position in stocks and you wait for things to go to shite. And when they go to shite, you make even more money. So there are people who are, we can't call them professional gamblers, but there are people who that's how they make their money.

Look for when things are going bad, make market bets that will optimize, that will take account of the fact that things are bad and that things are going to get worse. So if you're not one of those people, you might as well just assume that these things come in cycles. Let us get the best habits and let's kind of plan and set ourselves up so that when things start improving, we are going to be on the good side of the trend.

So examples of market related issues of course is economic downturn, which always leads to reduced customer spending. And yeah, people say it's a global thing, perhaps it is. But in Nigeria right now, people are feeling the pinch because from Buhari's government up until now, there was the whole thing of the cash crunch, whether they're trying to limit the, the amount of money in circulation, not just the amount of money in circulation, but also the physical cash in circulation.

So there was that cash crunch thing. Then of course, there was how that impacted inflation. And then Chenobu comes and then there's reduction in fuel subsidy. So it's, you know, Asia has been a lot. So it'd be like back-to-back to back. And of course these things happen and then people stop, people stop spending. You have to people reprioritize that spending. Let me put it that way. You know, so even if it's something as simple as DSTV,

before DSTV had premium bouquet because you know, 50K to spend on DSTV, yeah, not a problem whenever things change. And then all of a sudden one piece of yam cost, you know, 4000 naira, 5000 naira. And then you think, why should I spend 50K on DSTV? Let me just pay the 9000 package that frees me up with 40 grand and I can use that 40K to at least buy one or two yams and maybe buy some meat or something like that. So people start, excuse me,

people start making all those kinds of decisions during economic downturns. So people spend less. And then of course that affects your business. So if you're DSTV, you know there's nothing you can do. Economic downturn has happened. It has happened. And it just means some people are going to, instead of doing premium bouquet, they will now do the 9K1. And then some people who before were doing 9 K and they'll say what?

ME9K and then do that grade from 9 K to the one five. And who knows, maybe the people who own the 15 bouquet will now say wow, things are really bad and then they just cancel their subscription altogether. So these things happen. Then another example of market related issues is increased competition. Basically what happens with increased competition is you have people that are getting more aggressive than you are. And it happens in situations where you've exposed the valuable niche in the market and then other people are trying to get in.

So for instance, back in Niger during the whole COVID thing, you know, overnight it became clear that the market for hand sanitizers was, was a viable one. Now it's not as if hand sanitizers were not there. Hand sanitizers have always been there because like, you know, mumsy, like my own mum, she has this hand thing, you know, like you go use the toilet or you wash plate. After that you use Vaseline and then you come out from the market and then, you know, you do your hand sanitizer or something.

So mums and our aunties have always had hand hygiene routines for the longest of time. So it has always been there. But then with COVID, you have children using hand sanitizers, men using hand sanitizers. There's no longer a woman thing. And yeah, there's a market for it. And so yeah, the whole thing explodes. So you have people who were there before like Detour, but then you now have new entrants into the space. Like sure, that's SURE, but not the the one that not the people who make deodorants.

The Nigerian company, sure. So sure, comes in and they start making hand sanitizers and soaps and all those sorts of things, but you know, that's because, you know, a valuable market niche has been exposed and then other people will just, you know, rise up and try and take advantage of that. So these sorts of things happen. In fact, this is one thing that is inevitable in business. If you find a new way to make money or if you find a profitable way to make money,

rest assured other people will follow. There's no rule against copying, so other people will follow. So it doesn't matter if it's a new technology, a new design, a new product, a new market, a new whatever. Once you enter and people see that there's money to be made, people will enter. So count on it. Then there's also market related issues. There's also changing customer needs. That is when you know there's a shift in market demand or shifting trends.

This one is more of a market analysis issue, sort of, so I'm not going to address it here, but this is one thing that I've been saying on the podcast. If you have been doing good sales practice, and of course good sales practice means that you're in constant communications with your customers, you should have been getting some signs, some signals from your customers that there's changes in the market, there's changes in trends and there's changes in customer needs.

Because if you're talking with your people and you have a good relationship with your people, one or two people don't renew because there's this thing that has come up or they don't need this anymore, they don't need that anymore. So if you're handling sales functions yourself, you know, you're talking to customers, you're handling sales calls, you're doing customer service calls, and then you're also liaising with people who sell on your behalf, You'll already start getting some signals that almost there's this new product,

there's this new thing, there's this new that perhaps you should join the fray. So I'm not going to say anything about customer, customer needs, changes in trends and things like that. But just know that if you're doing sales right, you will definitely get some signals because I mean, worst case scenario, your best customer will tell you like, look, oh boy, I appreciate you been doing business with you and everything, but this is how my situation has changed.

It looks like this one pays me more. So you know, we're going with that. And then you now get a sense of what is new on the horizon, whether it's a new technology, a new competitor or a new market or whatever. So what is the overall framework for dealing with all these kinds of issues? That is not your fault. You just wake up and you know the economy has done a thing on you, so it's not your fault. Although my wife says that for those of us who refuse to vote in the election that brought in a book in, that actually is our fault.

So we can't wake up and say that. But anyway, that's an argument for another day. So you wake up, the economy has done its thing, what are you supposed to do? What happens for average people is that people contract when the economic winds are harsh. The person that was paying the STV 50K when things get harsh and yam is now 5K or bread is now 2K. When that happens, the person will go from 50K bouquet and the person will now start buying 10K

bouquet or maybe the 25K bouquet. That's just no matter how it happens now. There's also a corollary to that in business, which is that if people were doing times when times are good, people are spending, OK, let me not come with a figure, but basically there's fixed expenditure like your rent, that one is fixed. You can't do anything about it. And then there's variable expenses, maybe like how you guys use AC in the office or something.

But bottom line is when things get harsh for the variable expenses, people do their best and they try and cut down on that. Unfortunately, there are some variable expenses that people think are unnecessary, but they're not. And that includes sales and marketing because the amount that is devoted to sales and marketing can go up and down. And it's a variable expense. Some people think all variable expenses are necessary.

So when things get hard, when the cost of diesel rises, when the cost of fuel rises, you know, some people just start spending less on sales, less on marketing. You say, OK, we have a team of sales people. This is 1 the naive 1 selling well self. Instead of keeping 10 sales people, let's only keep five and then you sack 5 or we were spending 1005 on Google advertising every week. Things are off now instead of spending 1005, let's only spend 500 or dama.

Let's just cancel the whole thing. You know, so those are the kind of cuts that people make now. This is the problem with this kind of attitude. Well, by the way, unnecessary expenses, yes, by all means, you know, cut and cut and cut. But sales and marketing, you can't. Even though it's a variable expense, you can't lump it with all those unnecessary spending because sales and marketing are responsible for people to know who you are, what you do, how your product or service can help make people's lives better.

If you cut this now that you think, OK, we're in a depression, where will the momentum come from for your business when things start to turn around? If you stop engaging in activities that are telling people, this is me, this is what I can do, this is where my protocol service is the best. This is how we can help you when things start to change and people no longer know you or have a sense of what it is you do because these things happen,

you know, things turn around, people start seeing your face again. People like, oh boy, you're still here. I thought you Jack back, you know, or Jack back. That's the immigration phenomenon that is going on in Nigeria right now. You know, it happens in cycles. Things get rough, people leave the shores, people go to the UK, Canada, you know, wherever. So yeah, you can say you're cutting on sales and marketing. It's not a necessary expenditure.

You actually need it. You need to be out there. You need to be top of mind. You need to keep trying to bring in more deals. So the solution actually is to keep on doing promotional activity, keep on doing your promo activities during the bad times because that is what is going to provide the lift that you need when people things are coming out of the depression. So for for example, let me use 2 common examples that everybody should be able to relate with.

Since all this rubbish started, I'm sure you guys have noticed that your usual toilet paper, like you can't find your normal toilet paper, not like there's a crisis in toilet paper. It's just that some people have slowed down production, some people have stopped distribution because, you know, increase in production costs. There are other companies on the other hand, that have actually raised their prices and then they still remain in the market.

They're still doing promotion, they're still doing distribution. So your favorite toilet paper company probably can't find them anymore. But you've noticed that there are one or two bad boys, bad girls in the market. They're still there. They've raised their price, yes, two tissue paper now going for, you know, 800 or 1K or something like that. But The thing is, they're still there and it's the same thing with bread. So in Abuja, bread prices gone up, you know, 17 for a loaf of bread, 1/6/2000 on average.

I've even seen 2/5. So of course there's some people who have disappeared, like the price of yeast, the price of fuel, the price of this, the price of that. Let me just wind down activity and wait. But then the other people who are continuing, even though it's 2000 for a loaf of bread, are still doing their thing, still advertising, still sending out Flyers, still doing distribution, you know, whatever. Now The thing is this.

When the economy now turns around, however, it is going to turn around, whether the inflation goes down or whether Nigerians earning capacity increases and then there's more money for tissue paper and for bread. Who are you going to remember to buy? Is it the person who disappeared when things were rough or the people who kept on? So when things improve, that tissue paper that you are now thinking was expensive was blah,

blah, blah. You know, you can now afford it. I mean, there's no going to be any other option apart from people who are still playing in the market, who are still playing the game. So you can't afford to disappear and you can't afford to cut costs for marketing and selling activities when things, when things get bad, because eventually things change. And it's only people who remained in the market and who are still visible and who are still top of mind.

They're the ones who are going to capture everything. So the summary, especially since I'm talking to people who are in the SME space for big, big companies like, you know, empty and you know, they've been going through some troubles because the increase in fuel costs have meant that them because, you know, they have to they have to fuel generator sets and, or what not are there, what do you call these things? Those big, big towers, those huge metal things with antennas on top, the service stations or whatever they have to man them.

And then with the rising cost of fuel, you know, they've been put in pretty bad shape. So for MTN and all these big companies, you know, I can advise you guys yet I haven't reached that level yet. I will someday. But for the rest of us who are SMEs, small and medium scaled enterprises, if when the times were good, you are producing Flyers and you are dropping Flyers during the good time, now that things are bad, continue to be dropping those Flyers, it looks as if people are not buying.

And yet there's some truth to that, because, like I said, when The Economic Times are bad, there's less discretionary income and people spend less. But The thing is, like for those people, the podcast episode I spoke about, about the guy who was going around dropping Flyers at my son's school and other schools in the area. You should be dropping Flyers when things are good, continue to drop Flyers when things are bad.

When pepper rest and people now have more money and they're ready to now buy school bags, school shoes and all those things. When things turn around, who will they know to purchase from? They will know the purchase from you because you've been dropping Flyers when things are good. You've been dropping Flyers when things are bad. When things turn around, the only Flyers that will be around will be your own. The other woman who decided to lock her shop that OK, things are rough or she decides to Jack back, she's not going to be around to take advantage when things turn around.

Or the person who says that, OK, we used to produce 1500 Flyers when things were good. Now things are rough. Let's only be producing 200 Flyers. And by the way, the Flyers game is a game of scale. Don't kid yourself, be producing 205 hundred Flyers. And you said that that thing is going to work. This flyer thing is about scale. The more you drop the better. So don't kill yourself. Yes, there's a package for 500 Flyers, but please don't go and pay the don't go and buy that package of 500 Flyers Flyers.

It's not going to help you. 500 Flyers, you distribute it in two days or three days, then what? So you've been doing Flyers during the good times, continue doing Flyers during the bad time. Eventually things will turn around and you'll be the only one because you're the only one who was going around dropping Flyers. Now, there's a downside to this strategy, and I admit this strategy is inherently optimistic. But The thing is, we're human beings.

We're not God, we don't, we can't tell the future. There's no crystal ball. So we have absolutely no idea when things will turn around and we have no idea whether things will even turn around because let's go back to the days of our youth. As for those of us who are a similar age, you know, Ireland went through this thing of near economic collapse when they had their debt crisis. You know, that's when it was small. Then there was this old dude,

the one that looked like Hitler in Zimbabwe with that mustache Mugabe, Robert Mugabe and so Zimbabwe under Robert Mugabe. And then there was Nigeria under the structural adjustment program because that Nigeria NASAP that must have been, I don't know, felt like 1012 years of of bell tightening. So how long will these things last? We don't know. We things even turn around. We have no idea. But The thing is the options are very simple, especially in Nigeria of 2024 at the time of making this recording.

Keep hoping and you plan for that and keep making strategic choices based on that. Or Jabba, leave the country because you think that this is a sinking ship. So those are the options. So for those of you who are not jumping the ship because you don't think that things are terrible and going to blazes now, these are the options that are available. Continue with your promotional activity because you are expecting that cycles come and cycles will go.

Now, for those of us who are young, it's hard to keep it in perspective because we're young. What have we seen? We haven't seen much but maybe times like this, that's when it'll be good to talk to that uncle of yours who has been in business since you know, 1958 or whatever. So, I mean, look at it from a Nigerian point of view from 1958 till now, people who have been in business from then up to now, I mean, think about what they've seen.

They've seen, they've seen independence, they've seen boom, they've seen civil war, they've seen depression, they've seen military era, they've seen civil, they've seen they've seen it all. So, yeah, I guess if you're younger like me, you don't have the benefit or perspective. I guess now will be that time to get real close to your uncle or your auntie who's been in business for, you know, 50 years. You know, so might give you some perspective.

If nothing else, you learn one or two things about how to carry on business when things are tight. So that's all for today. Connect with me on WhatsApp. The phone number is 08064662140. The country code is +234. For those of you who are not Nigerian, then what else? Yeah, LinkedIn. So connect with me on LinkedIn. The correct spelling of my name. My name is Tavishma Ayede. You can get the correct spelling of my name from the link where you're currently listening to this episode.

My e-mail address will be there as well for those of you who dig e-mail. So thank you very much for your time and attention. I'll catch you guys at the next episode.