The credit fall-out continues

The sales profession in the services industry has always been tough, which is why it attracts resourceful, strong-minded and, yes, pretty tough individuals. The current trading conditions, however, are going to test the resilience and professionalism of many sales people to the limit.

Transaction and volume-based revenue on existing deals is already going down as nervous or cash-strapped clients start to reduce their activities wherever they can. That will lead to revenue shortfalls for a large number of service providers, and business leaders will find it pretty hard to explain that away to their shareholders.

Some of the consequences of this could be ugly. In one very big outsource deal we are seeing large-scale redundancies announced as a result of volume reductions, and this is leading to talk of possible strike action in the New Year. Others are undoubtedly going the same way; they just haven’t reached the news media, as yet.

This will leave some sales teams feeling that they will have to run faster and faster in 2008 simply to stay in the same place.

Now, what is the best way to handle this kind of problem, bearing in mind the fact that it is not going to be an isolated difficulty, but will affect pretty much every sales force in the services industry?

Most large service providers tend to be highly professional at going after major business opportunities, for which they mobilise all their resources, give an absolute commitment of time and effort and deliver the very best that their organisation is capable of.

Of course, there are only a limited number of such opportunities in any given year and now, with money becoming tight in existing contracts, every company has a strong incentive to go after as many large bids as possible. This is going to make competition much tougher for all.

To put it simply: if you are to survive and prosper, you can only do so by eating someone else’s lunch and, guess what? Those other people are as determined to eat your lunch as you are to eat theirs. Some people will go hungry in 2008.

So are you going to keep betting on a few big bids? Good luck if you do: you will need strong nerves, that’s for sure, because the risks will become higher and higher with every passing week.

It seems inevitable to us that more and more companies will turn their attention to the much larger number of smaller bids in the market. The risks on each individual bid are much lower than for mega-deals and it does, at least, allow you to hedge your bets more effectively.

> part 2