If, as predicted, a 2023 recession challenges businesses, will you survive it? Here are 4 things you can start to do now to prepare for a recession.
Big Tech companies are laying off employees by the thousands. Google is the latest, laying off 12,000. I think it’s a bellwether.
Many economists are projecting a recession in 2023. According to the Kiplinger Letter, “struggle” is the overall trend for the U.S. economy for 2023. Their business forecasts are well researched and normally spot on. They predict “the labor market will slowly lose steam with the number of new jobs created down from month to month.” Kiplinger also says “We may be in for a string of mini-recessions hitting one industry and then another. Unfortunately, the early read on 2024 doesn’t look very optimistic either.”
With that grim forecast, I think it’s safe to say your company will be impacted by a lot of belt tightening from your customers in the months ahead. Here are four major things you can start now to reduce the impact on your business.
1. Get even closer to your customers
As in every recession, you will see more activity from your competition as they scramble to take away your customers or make it harder for you to win new business. It’s critical for your business to keep up marketing momentum and good communication to ensure that even if markets soften, there’s a continuous supply of sales.
Obviously if you want to stay healthy and even grow more profitable sales, you need to pay attention to what your customers are facing and adapt to their changing needs. Make sure your customers know that you care about them and are trying to make their businesses more successful even during a recession.
Now is the time to get closer to your key customers. I think the best place to start is focusing on truly understanding their business problems and how your products and services can solve them. If you’re not doing that already, strategize with your sales and marketing team to determine ways to make these conversations happen. I strongly suggest that business owners need to be leading the customer conversations. Make sure you are hearing it “directly from the customer’s mouth.”
Drill deep and understand customers better than ever. Know why they buy from you and not your competitors. Shore that up. That means creating a continuous set of conversations that spell out how they value your company’s products and services. Gain details from those conversations and figure out how to communicate those details to all customers and to the prospects you are trying to close.
Once your value proposition becomes clearer from having these customer conversations, matching messaging to your positioning becomes easier to create. Here’s a tool that you can use to capture what your customers value about you.
Fine tune your messaging so it’s clear how your company’s offering matches each customer’s needs. Your messaging must match your position. Make sure it’s communicated clearly to all your customers.
Part of your messaging is stating why you exist and supporting it with legitimate stories that support those statements. Testimonials from people who have experienced your brand are powerful too. Refining your messaging will do two powerful things. First you will begin to attract a better workforce and second, your workforce will be more likely to communicate what you stand for.
2. Clarify your brand to employees
Now is an ideal time to consider your company’s internal branding, ensuring every employee is on the same page with you. Your brand should be clear internally, not just externally. If your people are not communicating the brand in a similar fashion, it’s time to review what your company is and what it stands for. You need a common, clear vision and voice.
Ideally all your people can state the value you provide to customers in seven to 10 words. Answer this question: “Exactly what do our customers say is the value our products provide them?”
Here are a few examples of what customers may say they value:
“You always keep my production line stocked so we keep producing.”
“You make our value proposition really penetrate.”
“You help me think through problems I’m too close to.”
Your people need to know what customers value and be able to rephrase it to you. By asking around your company, you can see if your people are on the same page. If too many answer in different ways, chances are your positioning and your brand is adrift. If you struggle with brand drift, we have programs to address it and audit tools you could use. Just give me a call or reach out to our team to help you make that happen.
3. Streamline your internal company processes to serve customers better
In addition to closely monitoring your customers changing needs, and having everyone “on brand,” it’s important that you look at your internal sales, marketing and operations systems to make sure you’re delivering on customer needs.
Fine tune company processes and systems to better support customers in every way, especially making sure your sales team is on point communicating the refined messaging that your marketing people are creating.
Tune up your customer support directives. Let customers know they are going to be served even better by your company during their belt tightening. Your customer support people have to make sure what was promised by sales and marketing is actually delivered to your customers at all times. Sales, marketing and customer service people all need to know the brand messages and make sure they are being delivered. If they’re all in synch nobody will drop the ball.
4. Know what to work on next
Obviously nothing in business is perfect. You will discover in doing these steps that you’ll have areas that could be improved to serve customers better. These can be the major things that your workforce, and especially your leadership team, will focus on in the months ahead. I suggest setting up quarterly goals (we call them “rocks”) and appointing work teams to focus on addressing these with very actionable steps that can be approved and supported by management. And be sure to measure and report the results.
Now is the time to make sure all systems are “go,” not after you are in the midst of the recession.
To satisfy customers better than ever before, you will need to be getting more quality production from the workers you have now. This might be the time to tighten job descriptions, making sure your role expectations for your workers are crystal clear. You may have to replace people who are not the right fit for the roles they are expected to play going forward. Perhaps it will become easier to hire from an increasing labor pool. But, make sure you really need more head count given a possible fall off of jobs and production for your company. Determine the right size to match customer’s stated needs.
And if you do hire, make sure you have a good on-boarding system and use it religiously so new hires get the right messaging and know how to act on it.
A mini-recession or a tightening economy may force you to do a better job. While the thought of recession may be scary to company owners, replace fear by seeing it as an opportunity—an opportunity to fine tune your company and make it better in the years ahead.
Building a bullet-proof company to face a recession is not a few-week or few-month issue. It takes time to identify needs and make the necessary adjustments. Don’t wait for the recession to bite you. By then it’s too late. Get ahead of it now.
If you’d like to explore ideas on how to make this happen, or you need to discover some tools your company can use to implement these ideas, I’d be glad to give you the support you need.