As city dwellers, too often we lose track of the seasons. For many of us we step out of one climate-controlled environment into another, home to car/bus/underground to office to gym or home to shopping centre, restaurant or cinema. There are no seasonal foods any more with everything available anywhere anytime. We are insulated from the rich experience of spring, summer, autumn, winter.
But as a Portfolio Executive, it is important to understand your seasons. In this article, I want to talk about the annual cycles that matter to you as you serve your clients and build your business. In the second article, I will talk about longer seasonal cycles for which it is equally important to know your season.
Businesses respond to two different annual cycles. The first is the rhythm of the financial year and the second is the schedule of school half-term and holidays.
Financial Year Cycle
As a Portfolio Executive, you need to recognize, for each of your clients, how the financial year impacts the way they operate their own business and the way they engage with their clients.
Let’s start with the way they operate their own business.
Often smaller businesses have a relatively immature financial cycle and one of the things that you will want to do is encourage them to put in place a financial year cycle that includes an annual budget, quarterly checkpoints (formal board meetings can be a useful discipline) to review progress against plan.
I recommend an annual strategy session, so you can all step back and look at what they’re doing. This informs a rigorous budget setting process. Alongside this you want to make sure that the financial and key performance indicators (KPIs) or outcomes and key results (OKRs) are aligned to those cycles so these are regularly reviewed and updated.
This should all be happening in the context of a strategy over 3 to 5 years that is renewed each year. At all times you will have a commitment to a clear direction of travel and well-defined ambition.
Recognise that this annual cycle may start to influence the seasonality of investment (often investment will happen in the fast half of the financial year), the focus on sales (often hitting revenue targets becomes a fourth quarter imperative), cost cutting (lower first half sales can result in second half retrenchment).
Now let’s think about the financial cycle of their customers or clients. Many businesses are living in a strongly seasonal environment. It could be that their seasons are driven by major trade shows, or it could be if they’re serving government that they’re driven by the regular cycle of year-end with government. It could be that the customers they’re serving themselves in a seasonal industry.
Retailers have a crucial Christmas season. Hospitality has both Pre-Christmas and then often a different tempo in January and February. As they start to move into April to September, there’s a whole new tempo. Holiday companies again, something else. So, understand the seasonal nature of your clients’ customers and understand how that is going to impact the way that you best support them.
School Holiday Cycle
But there’s another seasonality that I have learnt is important that is tied to the rhythm of the school holidays. It seems to have a huge impact on the sales and marketing responsiveness of people during the calendar year. What I’ve seen again and again, is that there are a relatively small number of months in the year where clients are ready to make buying decisions.
When we consider school holidays, then people are starting to get into summer holiday mode in early July. That means from early July through to mid-September they are unlikely to make a significant buying decision. Now you have a period from mid-September to probably mid-November when people are often ready to buy. But as you start to move towards the end of November, people are thinking about Christmas. They are looking to defer everything until ‘The New Year’.
And the reality is that the New Year doesn’t really start until mid-January or even till the end of January. Going forward, before you know it, we are moving to the Easter break and that will slow decision-making down again.
As you get to May, you have ‘Bank Holiday Hell’ for people involved in business development, with at least 2 Bank Holidays and often a half term break. Before you know it, you’re back into early July and buying decisions are paused again.
So, you need to be very aware that there are relatively small windows in which people will to significant purchases. These windows may be further constrained by client budget cycles. You can end up with quite a complex mosaic where the time when they may buy may be very limited. Sometimes they’ll buy towards the end of the financial year because they want to use up cash or to reduce their profits in the current financial year. Sometimes, they want to wait till the new financial year before they make commitments because they’ve got a particular profit target they’re trying to achieve.
Sometimes they are completely driven by their budget cycle and they will be this purdah that occurs between the time when they start the budgeting cycle until the budget is signed off before they will feel free to make financial commitments.
All of these things feed back into when you do your marketing and what kind of marketing do you do.
So, the seasons for marketing are rather different. At one level you need to continually build awareness and that is something they just need to be consistent about. But when you’re moving from leads to meetings and you building relationship with potential clients then you want to focus on those times when they’re less likely to be very busy. If you’re building strategic partnerships, again these quieter times are often great.
In my experience between early July and the end of August many senior executives have more flexibility with that time. In those weeks that they’re not on holiday there’s less demands on operational execution and they’re more willing to have lunch, book a coffee or meet for a drink. You can have relationship and trust building meetings because the pressure is off. Whereas in the buying seasons you need to be very focused on moving towards closing a deal. If you’re looking to build your business through referral, introductions or channels, then the summer season can be a great way to do it.
December can be very frantic for many businesses. But in January, an invitation to step out of the office and to have a different kind of conversation, to meet for a drink or have a snack can be very welcome. People want something to alleviate the dark days of January and early February.
Learn to know your seasons: both the financial year and the school year will make a huge difference to your clients’ responsiveness to sales and marketing activities and will drive their needs to serve their own clients.
In part 2 we will look at knowing the season in the economic cycle and the season of your own life.
Charles McLachlan is the founder of FuturePerfect and on a mission to transform the future of work and business. The Portfolio Executive programme is a new initiative to help executives build a sustainable and impactful second-half-career. Creating an alternative future takes imagination, design, organisation and many other thinking skills. Charles is happy to lend them to you.