The worst thing that can happen to a company during a recession is for its executives to panic and react in ways that make things worse. We’ve seen that play out before, and we’re seeing it again now as companies try to avoid the dreaded “R word” by slashing budgets when they should be increasing investments. In many ways, this is the ideal time for companies to take a hard look at their customer-centricity efforts – especially if they want to survive when times are good again.
A period of crisis is the best time to get feedback from your customers
A period of concern is the best time to get customer feedback. In a recession, people are more likely to speak up about their problems and give honest feedback about what they need, which can help you improve your product or service offerings.
Moreover, customers may be more receptive to marketing efforts during a recession because they feel they must spend money on things that matter—like staying in business. They might be more willing than usual to buy if they see value in what you offer or how much better it is than competitors’ products/services.
It’s a great time to invest in customer retention.
During a recession, your business is more likely to face customer churn than ever. With so many options open to consumers, staying competitive in the marketplace and retaining customers for the long term can be challenging. Over half of the companies that file for bankruptcy do so due to poor customer retention rates and high customer acquisition costs.
However, now may be the best time to invest in customer retention efforts! According to research from Bain & Company, “the cost of acquiring a new customer is five times greater than retaining an existing one.” By investing in your current base of customers now instead of trying desperately to attract new ones during hard times, you’ll save money while simultaneously building up goodwill among those who remain loyal throughout leaner years ahead.
It’s not the right time to stop investing in innovation
In a recession, your competitors are likely to be cutting costs, reducing their employee headcount and dismissing any ideas that don’t fit neatly into their short-term business strategy. But as the old saying goes: “If you’re going to be thinking anyway, think big.”
Innovation is key to staying ahead of the competition because it gives you an edge and helps you attract new customers. During a recession, innovation can help you gain market share by making your products or services more attractive than your competitors. It can also help retain existing customers through enhanced customer service or offers that will make them feel special; after all, one thing people tend not to cut back on during hard times is their spending on luxuries and treats!
You can’t afford to stop marketing now.
In a recession, you can’t afford to stop marketing. If you do, it will be hard for your business to survive. Your customers need you now more than ever, and they are looking for ways to save money, so they don’t have to give up their favourite products and services. Many of them may have had it with certain brands because of all the bad publicity associated with them during this time.
You also need to continue marketing during a recession because it helps retain customers who like your brand. Still, you might otherwise take their business elsewhere if they weren’t sufficiently convinced that staying loyal was worth it (and in some cases even preferable). Marketing is one way of doing this—it shows existing customers that there’s something special about doing business with you over other options on the market right now–and attracts new ones too!
Don’t neglect existing customers in pursuing new ones because you’re afraid your revenue will shrink.
It’s easy for companies to become so focused on acquiring new customers that they forget about existing customers. After all, if your sales numbers start declining and you have a bunch of new leads that haven’t converted yet, it feels like you’re doing something wrong by focusing on the people who’ve already bought from you. But this is precisely the wrong approach—don’t sacrifice your marketing efforts just because they’re not contributing directly to revenue right now!
Don’t let this happen: instead, keep investing in customer acquisition and retention as much as possible. You might be able to achieve better results by increasing quality rather than the scale at this stage, but don’t stop trying altogether! Don’t ignore existing customers; don’t stop marketing or investing in innovation or service. And remember: even if all your current clients are still happy with their purchases from last year (or ten years ago), there’s always room for improvement when it comes down to allocating resources during tough times—and if there isn’t enough money coming in through the door anymore because things aren’t going well financially? It may be time for some profound changes before things get too bad…
As companies focus on short-term revenue goals, their long-term brand reputation can suffer.
It’s important to remember that a company’s reputation is a long-term asset. A good reputation will bring you customers in the future, and short-term decisions and lousy customer service can damage it.
For example, if you sell food products, your brand needs to be associated with quality ingredients, wholesome values and a commitment to providing good nutrition to your customers. But if you cut corners on quality control during a recession to make more money, people might associate your brand with cheap food or even tainted products.
Your customers are a great source of competitive intelligence, and it’s an excellent time to focus on customer engagement, satisfaction and retention.
Customer Centricity should be a priority during a recession when your customers are likely to be more loyal and engaged.
Your customers are a great source of competitive intelligence, and it’s an excellent time to focus on customer engagement, satisfaction and retention.
They can also provide feedback on products or services you can use to improve them even further. They may also give you an insight into the market that would have been difficult to find otherwise, allowing for new revenue generation or cost reduction opportunities.
Bottom Line
It may seem counterintuitive, but a recession is the best time to focus on customer engagement and retention. By developing a customer-centric culture, you can build deeper relationships with your customers and increase their loyalty over time.
Who am I?
I am Dotun Adeoye, a Business Growth Strategist & Author of the 5 Pillars of Business Growth.
I’ve built up my experience via serial entrepreneurship, consulting leadership roles in business growth, business development and product innovation in large companies worldwide in the last 29 years.
Today, I consult with large businesses on how to sustainably grow their businesses, sustain infinite growth, ensure business continuity and achieve a legacy.
Hire Dotun Adeoye to Speak Virtually or In – Person at your company’s event to cover this or other topics. You can also get in touch via +44 203 097 1718
