Most economists agree that we are heading for a recession in 2023. The continuing war in Ukraine, soaring energy prices, rampant inflation, and higher interest rates are together brewing the perfect storm for an economic slowdown. A high level of household savings and a strong labor market might take the edge off, but all signs point toward some kind of recession this year.
Often, businesses wait too long to react to a recession when they should be putting a recession plan in place before it happens. Don’t let a recession derail your growth. Make a plan with these five tips in mind to keep growing even through difficult times.
It is far more difficult—and expensive—to bring in new customers than it is to nurture relationships with existing customers. A recession makes it even harder. To grow during a recession, it is vital that you hang on to your best customers, demonstrating your value to them every day so you can grow together. The best clients to have during a recession are those who have themselves taken steps to weather a recession.
In tough times, you have to consider whether it’s worth it to continue a relationship with a retailer or other customer that isn’t doing much for your bottom line no matter how hard you work for them. These are your needy clients, the ones who take up all of your time and resources, are too demanding, are always looking to get more from you for less. You may feel like you need their business more than ever during a recession, but the fact is clients like this are dragging you down and making you less efficient at a time when you need to be at your most efficient.
Crises are times of change, and people who can find a better way of doing things will remain strong both during and after that crisis. Look no further than the pandemic for evidence of this. Concepts like work from home, buy in-store, pick up later (BOPIS), videoconferencing, and services like Instacart already existed, but the pandemic accelerated their adoption. In the B2B sector, online ordering first became a necessity and then the preferred way of doing business for many buyers and sellers.
Business might slow down during this time, but that doesn’t mean you have to. A slowdown gives you an opportunity to review your systems, processes, policies, and products and implement creative changes as needed. Don’t be afraid to try something new, especially if you see your competitors vacating certain spaces or failing to adapt in an effort to save money.
While you want to focus on your best customers, drop your lowest-performing customers and products, and adapt the way you do business, you don’t want to overreact and drop too many accounts or fire half of your team. You might, in fact, realize that your competitors are overreacting in exactly this way and laying off some of their best salespeople. There’s an opportunity to add talent to your team.
You may also be tempted to raise prices, but during a recession, offering discounts to loyal customers might be the best way to deepen your relationship with them—and to get even more from them after the recession ends.
This seems even more counterintuitive than hiring more staff during a recession. Shouldn’t we be trying to save money and cut superfluous spending? History holds the answer. Companies that committed more to marketing and advertising during the 2009 recession recovered more quickly. This is because their competitors pulled back in an effort to save money. If your competitors are cutting their marketing budget, you have an opportunity to take their share of the market. Relationships always have to be nurtured; you can never take someone for granted, not in life or in business.
The key to not only surviving but thriving during a recession is being prepared. Have a plan in place before the recession starts so you can be proactive rather than reactive and continue to grow.