How do you sell through this COVID-19 storm? How do you continue to build your business, or even just survive? Donald Thompson has led through crises before, and in this solo episode, he talks about what it was like during the Recession in 2008 and what you should be doing to build relationships and make your company stronger.
Donald Thompson: Welcome to the Donald Thompson Podcast! Thanks for tuning in.
We’ve had such a great 3rd season so far with amazing guests like Anson Dorrance, Tonya Williams, Jen Hoverstad, Joe Colopy, David Gardner, and more. And I love having conversations with folks in the Triangle who are inspiring me and others to be great.
But today we’re going to do something a little bit different.
I’ve heard from some of you that you want to hear my perspectives and my advice on how to be a better leader, a better executive, and how to navigate through this storm of COVID-19 and the potential recession. So mom – and everyone else who asked for solo episodes – this one is for you.
Fortunately or unfortunately, however we want to describe it, right, when I became CEO of a technology company called iCubed in 2005, 2006. Shortly after, you know, we had a good year, 2006, I was like, “Oh man, this CEO thing can’t be that hard. I got it.” You know what I mean? 2007, 2008 and 2009 were at the time, right, the worst economic periods for business that, you know, we’d seen since the great depression. So you had a pretty traditional recession and scaling back in business.
You had a lot of technology firms that were leveraging resources in the U.S. Back then, it was a big shift to outsourcing development work, for example, to India and different lower cost geographies. And then you had the economic and the mortgage crisis. And all of these things converged at the same time and so it was bananas – and not in a good way. And people were reacting because there was something systemically wrong with our markets because we had over-invested across so many industries that were affected by the housing bubble that burst and that all of these loans and properties – I mean, think about how bad things are when banks are going out of business.
Right? Like, like, you know, take a step back and think about – and banks make money, basically doing nothing, right? Like they just are moving paper, and as long as they make decent decisions on who to loan money to and different things, they always make money. Well, this was a period of time where companies like Wachovia and different things were literally going out of business.
And, you know, I think it was like, I don’t know it was TARP, right? Was the name of this government bailout that this huge amount of money, General Motors, Ford Chrysler on the brink. Like, you couldn’t think of a more catastrophic situation, so how did we grow through it? Well, certainly we were fortunate and we were committed, but we were in the software integration business.
And so, we built technology for large companies that were cutting back, laying people off. And so we had to do some things counter narrative, if you will, in that we had to lower our prices in a time when we were losing clients, secure relationships with our larger clients and get them to fire other suppliers, not us – number one. Number two, while we were lowering our costs, we had to over deliver so that we could create more value for everybody that we were working with. So, I wouldn’t say that those times were our highest level of profitability, but they were our highest level of innovation, both in terms of how we did contracts, both in how we still survived in won new business and also building a team that refused to lose. When you’re a bootstrap company, you make payroll or you die. We had a different foundation of our mission than larger companies that could try to weather the storm. And so, one of the things that we did well is we continued to find ways to help our clients grow their business. And when you’re dealing in a recessionary period of time, when people are cutting back on marketing, when they’re cutting back in development or cutting back on innovation, layoffs are abound. You have to find a way to tie what you do to bottom line cost savings, or top line revenue growth. And because we were able to do that with a handful of very large clients that we were working with, we were able to survive and advance and ultimately we grew 30% year over year, 2007, 2008, 2009, and then grew even faster in 2010, but it was a lot of hard work.
It was a lot of pain. We had a couple of layoffs that we had to deal with. It wasn’t fun, but we pushed through keeping in mind, two things, save our clients money, or make them a shit ton of money. And if you could do one of those two things, you still could have a business conversation with people that would get deals done.
The one thing that’s different that we’re thinking about now in this kind of craziness, right? ‘Cause one of the things about the past recession is it was focused on a couple of different industries, all right? So manufacturing was really hit hard, for example, right? So automotive and different things. This global pandemic is affecting every human being on the face of the Earth. It’s either affecting you from a healthcare standpoint, people that are getting sick, it’s affecting you because industries are being shut down.
It’s affecting you because other family members in the whole global economy, right, is participating in this pain, and nobody is immune, and that is making it different. And so, one of the things that you have to do when you’re dealing in an economic situation where it’s harder to sell, is you have to find ways where you can be the company of trust, faster and better than anyone else.
And the only way you can sell from a period of trust is if you have an existing client that already trusts you, you can have future facing conversations. Even if you have to take less money for the deal, even if it takes longer to get the deal done, you can still have conversations because there’s trust.
And that client will tell you what they can and cannot do quickly. So you don’t spend a lot of time in the sales cycle trying to chase ghost deals, right, which is the most painful thing in sales, period, but it is deadly when you’re under stress for your business. The second thing, outside of existing customers, is partners because if you are selling through a partner to their trusted relationship, you can still skip through all of the traditional vetting process because there’s a power of recommendation. It’s no different if you’re going to buy a house and you need a recommendation for a realtor, a good friend of yours said “You should use Joanne. She’s amazing.” If you’re looking for a lawyer, and somebody says “You should use Forrest Firm. I’ve used James Forrest for 10 years. He and his team and David Morris are amazing.” That power of recommendation decreases the number of people that potential client is going to vet through because they’ve already got recommendation from trusted sources.
So, they’re actually gonna make an up or down decision faster, and then if you’re one of those recommended sources, it is more likely you have a chance to actually win that deal. And so I think that double down on partnerships is a strategic imperative in any business that you’re in, because referrals are King. I’m in the digital marketing space with Walk West, we love it. Video production, amazing, all those different things, but you’ve got to find a way to be the trusted vendor, vendor of choice, because people are going to shrink the number of people they talk to, and they’re going to shrink the number of people they do business with. So, referrals and partners right now are oxygen.
I think that we have gotten to society, and it’s good for me and good for us in that it allows us to be super competitive, but people have gotten lazy as marketers and salespeople, and they think that they can just push a campaign into the magic Google button, the magic Facebooky, and then leads come, right? And yeah, maybe if you’re selling something super simple, right, a baseball cap, a t-shirt or something like that. But, if you’re selling something complex, people do their research. How is your company going to stand up to the scrutiny, and give you that opportunity to not only be noticed, but for people to take you seriously, because the research they did on you as an individual and your company validates what the marketing said. Validates what the referral said. Validates what your partner said. So I think right now marketing is about trust building.
It’s about true thought leadership. That’s where podcasting white papers, webinars. Podcasting, white papers, webinars. Because it gives you the opportunity to speak in more depth to your client from an educational component, not a sales component. And so I think the successful people today are going to be educators and it turns into a business conversation over time.
The Donald Thompson Podcast is hosted by Walk West CEO, mentor, investor, and Diversity and Inclusion Consultant Donald Thompson.
Music for this episode provided by Jensen Reed from his song, “You Can’t Stop Me”.
The Donald Thompson Podcast is edited and produced by Earfluence. For more on how to engage your community or build your personal brand through podcasting, visit Earfluence.com.