Is another recession on the horizon? This question startles many business owners, as the effects of the Great Recession of 2008 still linger. The longest recession since World War II, it was a brutal period for businesses in America, with the GDP falling 4.3%, unemployment rising 5%, home prices falling 30%, and the S&P 500 index dropping 57%.
Yet financial experts believe another recession could be coming sooner than later–perhaps within the next 12 months.
“Many C-suite executives are already anticipating recession in the next few years and quietly gearing up for it,” said the Harvard Business Review. “They see the warning signs: Ballooning corporate debt. Government yields that are dramatically lower than the previous long-run average. Negative returns on the Standard and Poor’s 500. Lower GDP growth in China relative to what it was before 2010.”
So let’s assume a recession is on the horizon. What does that mean for your business operations? And what sales tactics can help you navigate the lean times?
To find answers to these questions, it’s instructive to refer to the most recent case study: the Great Recession of 2008. And the good news is that many businesses were able to thrive during this time due to effective sales tactics.
Financial experts analyzed these successful businesses and found they grabbed market share during the recession by focusing on their high-value customers. While other businesses flailed reactively, sometimes slashing prices on random items and other times raising prices in an attempt to remain profitable, the best companies prioritized the happiness and trust of their customers.
They did this by communicating with their customers early and often. They strategically created sales and other promotions that benefited their customers, not necessarily the business’s immediate needs. It was a long play, rather than a series of desperate acts.
These successful businesses took action at the onset of the recession. While their competitors carried on with the status quo, these unique businesses tried to reduce operating costs, which enabled them to be customer-centric in their sales tactics.
This approach worked, as customers flocked to and stayed with these companies during the recession. Despite the dire events occurring throughout their respective industries, these businesses experienced growth.
As we now face the possibility of another recession, it’s advisable for you to also prepare for action. This possibility doesn’t mean you lay off staff and start closing stores. It means you should look at how you can streamline your operating costs, then review your sales strategies. Here’s where to start:
Your competition: If you want to increase your market share, you need to know the market you’re sharing. Take the time to learn what your competitors are doing and what it will take to differentiate your business.
Your pricing: Do an industry audit to ensure your prices are competitive. It’s a delicate balance, finding where the cost of your products or services are favorable to customers but still rewarding to you. Look for ways you can monetize additional elements of your business.
Your positioning: Because you’re so close to your products or services, they probably seem amazing to you. But you need to think from the customer’s view. Take the time to carefully stake out your unique position in your industry so nobody can miss you.
Your financing: You don’t want to be caught flat-footed if a recession hits. Consider what financing you’ll need to carry out your sales tactics, then work now to obtain it.
This mindset is a win-win. If a recession does hit, you’ll be primed to deal with it. If the projections are incorrect and there isn’t a recession looming, you’ll still be reaping the benefits of more efficient operations and a legion of loyal customers.
“Main Street has it right: Even as the debate about ‘when’ continues among economic forecasters, companies should begin to prepare themselves for the next recession,” said the Harvard Business Review. “As our research suggests, getting ahead relative to peers (even slightly) during recession gives companies an advantage that is tough to reverse when the economy is doing better.”
If you take the time now to shore up your finances and prepare your strategy, you’ll be primed for success regardless of what happens within your industry. Sustainability is the name of the game, and by refining your strategies so you can connect meaningfully with your customers, you’ll be doing everything possible to ensure your business will still be around for your kids to take over it someday.