Anne-Marie Rosser is the CEO of VSA Partners.
The outlook for business right now can feel bleak. Few financial experts can agree on what the economy will look like in even one month. Prices are rising. Customers are nervous. And with such volatile economic headwinds, pulling back and waiting out the downturn might seem like a smart defense. But if we’re honest with ourselves as business leaders, we know that pulling back now is not a defense at all. It’s simply a form of paralysis.
As counterintuitive as it seems, I believe now is the time to play offense. And that doesn’t have to mean spending more. What it does mean, though, is acting bravely and reprioritizing your spend for better effect.
Throughout my decades of experience in the agency world, I’ve gotten insight into a wide range of companies and their tactics for navigating economic volatility. Often, we’ve been working right alongside them. The following tactics are certainly not an all-inclusive list, but they are the mindsets I’ve seen work time and again.
Define Your Constraints
As I lead an agency that cut its teeth in design, I can tell you that designers appreciate constraints—and they’re not alone. Reflecting on your situation and defining the challenges you face is always the best place to start.
A macro example: Most companies have the dual challenge of needing to address both the acquisition of new clients and the retention and growth of existing clients in any given year. But this looks different based on industry and where the company is in its lifecycle, i.e., its circumstances.
Less mature companies or those that are less recession-proof might still need to drive acquisition as the primary focus. Resetting to metrics that drive acquisition in the near term can help focus on limited resources. Conversely, many companies find that retention becomes the primary focus. This move to retention might mean that the budget shifts to more high-touch activations, such as events and in-person workshops—face-to-face time with clients to deepen relationships.
Use CX To Invest Where It Matters
A great blueprint for prioritizing spending is customer experience. If you can understand the full customer journey and the touchpoints that are essential—those that require more maintenance and those that create meaningful moments of impact—you can more easily frame spending during a downturn. This knowledge can allow businesses to confidently play offense while also pulling back in some areas that might be less mission-critical.
Find Your Latent Opportunities
Downturns can create new and completely unexpected opportunities. The challenge is finding and acting on them without being distracted by an overall dismal economic outlook.
First, it’s essential to stay alert and never lose focus on emerging consumer needs that are in fact created by a bad economy. This helps you determine if there are new market or product opportunities on which you can capitalize, possibly offsetting any negative impact on your business over the short term.
Also, take stock of existing products and services you offer to see if there are any calculated risks you could take that might displace one or more competitors. The desire to pull back affects everyone, so this could be your chance to catch a competitor or two asleep at the wheel. We’ve seen companies de-position the competition by buying up media around key events and therefore achieving higher impact and visibility with customers. But this can happen with product innovation as well as by accelerating the introduction of new features.
And don’t forget, a downturn is often the perfect time to experiment, innovate and even reinvent portions of your business. It can be difficult to optimize and fix broken processes or operations when a business is running at full tilt. So look at a lull as your time to optimize for the inevitable return of a healthy market.
Empower Your Entrepreneurial Engines
While we’re on the subject of experimentation, a downturn can sometimes be a chance for your most entrepreneurial employees to shine. These leaders within your organization—whether they are quietly building a whole new business opportunity for you in their head or boldly sharing their idea and just looking for a go-ahead from you—can quickly become a powerful lifeline for your business. Now is the time to identify them, empower them and turn them loose.
Open yourself up to your employees and actively engage with their thoughts and ideas. Borrow from the software development practice of “hackathons,” where you bring people together over a short period to deeply explore a particular problem, customer need or product feature. I think you’ll find that your willingness to listen will encourage them to collectively approach your business situation with more intention and a sense of ownership. And even if their concepts are unworkable, it can still spark new creative thinking that might ultimately lead to innovative solutions that can transform your company.
In good times and in bad, there are always opportunities. But when times are bad, fewer people capitalize on them—and there’s a greater chance of breaking through. By assessing where your spend can have its greatest impact, and by powering up entrepreneurial engines to find transformation where it counts, your business can weather, and perhaps even thrive, in a recessionary climate.
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