Even before the COVID-19-induced panic, many economists were predicting a recession in 2020. That recession is now bearing down on us, faster than anyone expected.
But that doesn’t mean you should panic. In fact, the old British wartime maxim holds true: Keep calm and carry on. More specifically, spend time now investing in and solidifying relationships with the customers you already have, so they stick with you when times get tight.
Silver and Gold
Another popular saying suggests that new friends are silver, and old friends are gold. You all know how it goes: “Make new friends, but keep the old.” The same can be set of customers. New customers are great, and as long as you have the capacity to continue to deliver exceptional service (or the ability to hire quickly), we’re all for pursuing new business opportunities.
What we don’t recommend is consistently diverting resources away from your existing customers in the endless pursuit for new ones. Existing customers are your gold. And gold stays strong in recessions.
Here’s why you shouldn’t get too distracted by new business (in a recession or otherwise):
- You’ll burn out your team. People can only do so much, and they can especially only do so much well.
- You’ll lose your existing customers. Savvy customers know when your mind is elsewhere—and elsewhere is exactly where they’ll take their business.
- You’ll miss out on organic growth opportunities. Engaged, satisfied, repeat customers are more likely to invest in your premium products and services, and more likely to stick with you when things go wrong.
- You’ll spend more money. Acquiring a new customer can cost five times more than retaining an existing customer.
In a recession, when purse strings get tighter for both you and your customers, it’s important to remember that even if it’s less glamorous, you’ll weather the storm better with existing customers than with new ones.
Vendors and Trusted Advisors
In the face of a recession, your customers might be looking for ways to cut costs. One low-hanging fruit for them would be to stop outsourcing work to vendors, and instead, bring those capabilities in-house.
To avoid being cut first, you need to be more than a vendor. You need to be a strategic partner and a trusted advisor. You need to know as much about them as possible. How they work, what they like, and what drives them crazy. What they’ve already tried in the past and why it did or didn’t work; what they’re interested in trying in the future. Most importantly, you have to understand their big picture strategy and goals, so you can always be proactively proposing and executing on solutions to help them get there.
In fact, good key account managers are already talking to their customers about the potential recession, working on contingency plans and long-term strategies, so by the time the recession hits, they’re already an integral part of their customer’s response.
The more deeply rooted you are in your customer’s world, the more they’ll want to keep you by their side when times get tough. In fact, they may want your insight and help more than ever when times are tough. But you can’t get there without key account management.
Process and Technology
So how do you use key account management to double down with your existing customers? You need a robust process, supported and accelerated by purpose-built technology, to ensure you’re building resilient relationships with your customer base.
- Know your client. The better you know your client and their business, the harder you are to replace, even with cheaper in-house services. If your client knowledge is substantial enough that getting anyone else up to speed would cause more stalls in deliverables and revenue, your customer is much more likely to keep paying you, rather than trying to find someone cheaper. And the more you know about their big picture strategies, the more you can set yourself up to act on their behalf—making your relationship even more important.
- Act on their behalf. Customers know when you truly put them first. They can see and feel the difference. In a recession, they will be even more put off than usual by someone who appears to be acting solely in their own best interest, without providing any real or lasting value in return. Kapta helps you build action plans rooted in customer goals, and stay focused on that plan even as the outside world gets noisy. Combined with our measuring tools, we help you show your customers that you’re working for them, not for yourself.
- Measure what matters. A recession only underscores the importance of ROI. Your clients are going to want to see real results coming from the money they’re investing. Kapta’s measuring tools give you real-time insights into customer success metrics, while also gauging the health of the account as a whole.
As we’ve already started to show, process works best when it’s supported by purpose-built technology. Kapta’s platform works hand in hand with Our KAM Process, supporting KAMs as they build resilient client relationships.
If you’re hoping your CRM can do the trick, we have bad news for you: It’s not enough. CRMs are focused on transactional, rather than strategic relationships. And it’s strategic relationships that matter most in a recession. For more on why CRM is not a KAM tool, read here.
Recessions are anxiety-inducing. But the key is not to go chasing new business or frantically trying to upsell when it’s not the right fit for a customer. The key is to double down on your most important asset: existing customers.
To learn more about Kapta can help you become a trusted advisor to your customers, schedule your personalized demo today. And remember: Keep calm, carry on, and invest in your gold.