“Forget past mistakes. Forget failures. Forget everything except what you’re going to do now and do it.” – William Durant
During a downturn unemployment can rise and economic uncertainty can abound in both B2B and B2C arenas. Consumers and businesses will continue to spend, although what they consume will likely change. Businesses will make purchasing changes based on supply chain availability and selling changes based on necessity. In some instances, these changes can be temporary, but more than likely they will be further magnified as things start to pick back up again.
While an economic recovery will almost certainly happen slowly, your business needs to be poised for revenue growth ahead of time to quickly seize opportunities as they arise. So, how will your business capitalize when the economy starts swinging upward again?
Do you know how to move forward in a restart? Ask yourself these questions:
- Do you know how to control your spending without thwarting growth?
- What will you do to preserve essential customer relationships?
- Are you equipped to find revenue in new ways?
- Do you understand where new revenue opportunities exist?
- Can you change your way of thinking to adapt?
Remember, practical business readiness transcends any one recession. Having the right plan in place prepares a business for any kind of restart – an economic rebound, a response to national policy change, a transfer of ownership, or even a corporate re-branding.
Evaluate Spending Surgically
Once you have made it through the deepest trenches of a downturn, the most significant cuts will be in the rearview mirror. So, if your business has made it this far without substantial reductions, now is probably not the time to cut spending.
Cuts that are going to continue must be done carefully to avoid hampering growth potential as the economy restarts. Evaluate the potential impacts of budgetary decisions over a longer time horizon to determine if they make sense. Invest in the most critical revenue-drivers for your business, including personnel. Analyze your existing revenue base by customer type, product line, channel, and region and then pursue significant opportunities first to avoid missing out on low-hanging fruit.
Think twice before cutting sales and marketing because, without them, you may not have a business to save. Heed a timeless recessionary lesson from John Quelch and Katherine E. Jocz when they caution,
“Although it’s wise to contain costs, failing to support brands or examine core customers’ changing needs can jeopardize performance over the long term. Companies that put customer needs under the microscope take a scalpel rather than an ax to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.”
Invest resources in maintaining existing accounts before going after new accounts. Focus on retention and cross-selling, especially with strategic customers. Proactively reach out with honesty and transparency to all customers. Remember, it is easier to manage the conversation when you start it, than it is when you are responding to it, especially if the response is to a complaint or cancellation request.
Prioritize creating value in a way that resonates with your core audience. Figure out how you can change your offerings or approach to appeal to recession-buyers. For example, consider offering a free trial option, extending the duration of your existing trial, improving support, increasing service tiers for better customization, and rewarding loyalty.
During an economic slump, the average business customer is operating with a different mindset. An ageless Harvard Business Review article, How to Market in a Downturn, reminds us,
“In frothy periods of national prosperity, marketers may forget that rising sales aren’t the result of clever advertising and appealing products alone. Purchases depend on consumers’ having disposable income, feeling confident about their future, trusting in business and the economy, and embracing lifestyles and values that encourage consumption.”
The same is true for business buyers. Align your brand and your offerings with your audience’s new needs by addressing their anxieties and current constraints. Reposition your offerings to match your customers’ “essential needs” and determine how you will draw out the spending that businesses are less likely to offer up freely.
Once you know how you will position your products, get them in front of your audience where they are now. Even in the B2B space selling is becoming increasing digital year-over-year, necessitating different sales approaches and resources. Create high-quality digital sales tools to arm your front line to succeed and shift marketing dollars towards online channels.
Do not rely on your old understanding of the industry or the competitive landscape. “The way we have always done it” is not a viable recovery strategy.
Market research is still incredibly important, but most likely historical data will not help to inform decisions during a downturn. Figure out how your team will adapt when there is less data than you are used to having available and develop new intelligence around how to conduct competitive research.
Where possible, go to the source – ask your target audience what they need, where they are considering getting it, how much they will pay for it, and when they want it. Understand without bias what you do well and what you don’t and use this insight to shape future offerings.
Create a Roadmap
Whether you start over entirely or adjust your plans depends on the specific business. Either way, seek input from others, especially those that know more than you. Successfully pivoting requires getting the whole team on the same page.
Consider the priorities and perspectives of the entire company when creating your plan. Getting widespread buy-in will make it easier and faster to implement. It also reduces the likelihood of leadership conflicts over what to prioritize. Consider leaning on a consultant to provide impartial advice during a restart and use that strategic guidance to create a roadmap to remain nimble and prioritize actions.
Use the Revenue Action Development Plan to achieve your B2B sales goals and drive sustainable revenue.