Right now, the economy is up. Business is booming. And isn’t that a good sign?
The flip side of this positive scenario is this: a recession is coming, but we just don’t know when.
Even with a recession on the horizon, unknown factors will always plague the day-to-day endeavors of businesses. There’s no way to avoid the unpredictable. The financial crisis of 2007 through 2008 and the Great Recession were tough times—and even leaner times for business. “If you surrender to the wind,” Toni Morrison said, “you can ride it,” and it will be the well-prepared companies braving the winds of change and rising above the risks of a recession.
Armed with the right resources, companies braced for this shift may even look forward to the coming recession. Prepped and prepared, these will be the businesses that will continue on with business as usual and may even—surprisingly—thrive.
During a recession, companies separate into two categories, those that will sink to the bottom and those that will rise to the top. Despite the shifting times, companies that follow these four strategies will become the businesses poised for success despite the shifting times.
Strategy #1: Get your business basics squared away.
It’s important you have the basics of business squared away, whether a recession is on the horizon or not, otherwise, you won’t be poised for success even in a stable economy. Harvard Business Review suggests the following:
- Align your sales capacity with market opportunity
- Don’t sweat the details when it comes to daily execution
- Explore digital tools that can unlock markets and streamline sales
- Quantify your profitability with certain clients and deals and determine if you’re utilizing your time and maximizing efforts (For example, if your sales team starts focusing on closing larger deals, prohibiting smaller deals can actually be more profitable.)
- Automate systems where it makes sense
- Reward and reinforce positive staff behavior
You’ll also want to make sure your sales team ramps up their efforts of excellence. You’ll see down below (strategy #2) how important keeping current customers is to continuing business per usual.
Strategy #2: Acquire new customers, but take care of the ones you’ve already got.
When the recession hits, your clients will tighten their belts. They’ll buy less. They’ll consolidate their vendors. They’ll break contracts if they can find an out. Since their business is your revenue, how can you keep them close despite the trying times? You control how you care for them.
Booker T. Washington, an American educator, author, and advisor to the likes of President William Howard Taft and Theodore Roosevelt, understood the power and importance of not overlooking the simplest elements. “Excellence,” Washington said, “is to do a common thing in an uncommon way.” During a recession (and ideally even before!), this excellent care of your clients will keep them around.
Certainly, customer acquisition is part of the equation to achieve revenue growth, but what’s involved in that cost? Lead generation. Marketing. The time it takes for sales teams to make contact. Onboarding. Etc. What else can contribute to a boosted revenue? High customer retention rates. The investment of time and money into acquiring new customers continues to compound as you care and continue offering exceptional service to these customers you’ve already got.
It’s well known companies with strong levels of customer service grow faster. That’s because clients don’t feel like customers. They feel like they’re doing business with a friend—someone who they trust. This feeling of trust elicits a profitable relationship on either side. Plus, your customers will continue doing business with you as long as your work aids your clients in achieving their own goals. Immersing yourself in the goals of your clients and anticipating their needs will always bode well for business.
The most valuable asset for longevity—no matter the current climate of business—is the foundation of relationships. Building strong client relationships, especially through a Strategic Account Management Program, is the mode of doing business that buffets whatever the winds of change bring.
Strategy #3: Trust the research.
CSO Insights recently released their 2018-2019 Sales Performance Report entitled “Selling in the Age of Ceaseless Change.” Results show that across 900 organizations, revenue from existing customers accounted for 70.1 percent of total results. Findings also revealed:
- The sales cycles to close opportunities with existing customers were reported to be an average of 3.8 months compared to the 7.2 months it took to close opportunities with new customers
- Customer churn (or, customers leaving) is at 13.9 percent of revenue
- If you’re rated as a “Trusted Partner” with your customers, your win rate is 59.9 percent (vs. 43.7 percent on average)
Among all the companies profiled, the largest driver of success was having a dynamic process for account management and sales through a Strategic Account Management Program. Sadly, only 28.9 percent of companies are at a level of process maturity to start thinking about a Key Account Management Program.
To be strategic, you have to deeply understand your customers goals. You have to be indispensable. Make sure you’re asking questions and listening closely when clients share strategic information. Create value with personalized ideas and individual tips. Show just how your work, product, or service aligns with your client’s personal and professional goals. A Key Account Management Program like this one ensures that happens.
More than ever, how your customer relationships are managed directly dictates how your company is poised for growth…or isn’t.
Strategy #4: Start your strategy now.
There’s no time like the present.
Anyone could throw their recession timing predictions into the realm of possibility. The winning companies, though, will be the ones who focus on what they can control. They’ll take preparations seriously and they’ll know their best partners in rising to the top are the customers they’ve been