Consumer Indecision During a Recession
How will consumer indecision impact sales in a recessionary environment?
It doesn’t matter whether we are in a recession or moving into one. The fears of both a current or impending recession have already been priced into the market and impacted buying behaviors. In either scenario, companies are reducing their spending and focusing on a stricter set of priorities. We can point to the increased tech layoffs in the second half of 2022 as a prime example. Tech companies decided to reduce their workforce to align with a stricter budget and more streamlined priorities.
As mentioned in the Gong Lab Series, market downturns lengthen sales cycles, reduce win rates for new deals, and make upsells more difficult. All of these factors stem from buyers’ hesitancy when making a purchase. Many buyers will weather out the seeming current or impending storm by sticking with the status quo. This makes the job of any sales person very difficult because they have to spend more time convincing them that their product will benefit people within and beyond the recession.
In The Jolt Effect, Mathew Dixon and Ted McKenna explain how consumer indecision occurs when buyers want to minimize the costs of their errors. A recessionary environment will further exacerbate the negative impacts of consumers’ drive to maintain the status quo.