When it comes to running a successful company, growing your business is the main goal. It should come as no surprise that growing business becomes even more important in times of economic uncertainty. Unfortunately, when economic conditions worsen, companies begin bracing for the impact, and opportunities for innovative solutions are overlooked. Let’s take a look at how businesses can respond to adversity with measured steps, and continue to pursue growth when times are bad.
1. Ramp up Research and Development
In an economic downturn, the need for creative solutions to growing business are higher than ever. When it comes to the role of research and development, knowledge is an investment, and can come at a high price. Unfortunately, in bad times, most businesses choose to tighten wallets and minimize all risk of loss. According to UC San Diego News Center, this is one of the most detrimental choices a business can make, as those that are “tolerant of failure in pursuit of reward are best suited to seed innovation needed for growth.” In times of economic uncertainty, when adversity to risk is high, continuing to fund research and development is essential to growing a business.
But what exactly should a business be focusing their researching and development on? This brings us to our next step.
2. Knowing Your Customer
With an altered economic landscape comes a customer with altered spending habits that can make it harder to grow business. Harvard Business Review separates consumers into four segments when responding to an economic downturn, ranging from the most severe to minimal restriction on spending:
- “Slam-on-the Brakes:” no purchases outside essential needs.
- “Pained-but-Patient:” will purchase needs with the sparse purchase of “treats.”
- “Comfortably Well-Off:” will purchase needs and treat items more frequently; will consider larger purchases if necessary but will think twice; no excess spending.
- “Live-for-Today:” least amount of limitation on spending; will purchase needs, treats, and will take advantage of larger purchases currently on sale; will include excess items likely from brands they know and typically purchase from.
We can take the above information one step further and incorporate the concepts of Maslow’s Heirarchy of Needs. Listed in order of importance, fulfillment of the needs below will produce the ideal psychological environment for your customers to successfully engage in the purchase of your product:
- Basic needs: survival, safety
- Psychological needs: belonging, relationships, importance or defined role
- Self-fulfilling needs: self-actualization, growth and achievement
In a time of unemployment and economic hardship, your customer’s survival instinct may kick in, encouraging them to “slam-on-the-brakes” when it comes to purchasing your product if it isn’t essential. Like-wise, if your top customer is in a powerful place financially, and feels confident in their relationship with your brand, your company is in the best position for growing business. Understanding your consumer’s relationship with the above categories will help you adapt your sales and marketing strategies to their new way of spending.
If you’re wondering how your business is going to get to know your customers better, you aren’t alone. When it comes to the B2B channel, most brand manufacturers never meet the end consumer of their product. How can these businesses begin to build relationships with their partners located in various parts along the channel?
3. Digital Data Collection
Technology has quickly become an integral part of the buyer’s journey. Much like the volatile markets in an economic downturn, the way businesses digitally interact with consumers is constantly developing. Keeping up with the digital trends is the best way to adapt to the changing landscape of commerce and continue growing business.
It should be noted that the onset of a global pandemic has been the most extreme case of uncertainty the B2B market has faced thus far. Businesses relying on trade shows and in-person meetings to connect with their customers and promote their product have been hit particularly hard.
The good news is that digital business practices offer a variety of benefits when it comes to understanding your customer through data collection. B2B companies with an eCommerce platform can easily trace sales information to better prepare inventory, all while providing an effortless buyers experience.
Investing in a channel incentive program is another way of collecting participant information, with the added bonus of driving sales behavior. Registering your partners for rewards via an online channel incentive platform establishes a direct line to the customers that keep your business running. Create specialized promotions based on the buying activity of your top earners and engage less-active customers in an omnichannel communication experience to keep your brand top of mind.
Growing Your Business: Next Steps
While the impacts of the coronavirus on the global economy are not to be taken lightly, social mandates and restrictions will not last forever. We may not be able to control the ability of the market to bounce back, but we can continue to make investments in both our business and our B2B partners through various digital and incentive platforms. Steps taken to grow your business today will only help in offsetting the unpredictable hardships of tomorrow.
With over 25 years of incentive experience, we’ve made it been through a few economic down-turns and are happy to help see you through. Take advantage of a free consultation with our team here at Incentive Solutions.