Some tips on how to find new business during a recession, while doing your best to retain existing customers.
As the spectre of recession looms, business leaders around the UK are actively considering how best to respond to the current financial crisis. The implications are serious for most companies and organisations. Among the likely outcomes are reduced profit margins, as customers experience a reduction in their disposable income, which means their spending power is adversely affected.
Instead of maintaining their accounts with you, these customers may have to use this cash to pay for large rises in their energy bills – and it may have even started already. This, in-turn, may result in these customers being enticed by low-cost alternatives and eventually the closing down of their accounts.
To counter the loss of these valuable customers, you will need to start making plans on how to overcome such challenges. Finances could be squeezed, so keep a close eye on them. Even consult with a financier, should you foresee any major problems going forward.
Customer organisations will change, sometimes temporarily, but others will be more permanent or structural. You are likely to experience a downward pressure on prices, and especially on some of your high-value products. There may be a possibility to preserve the value of your high-end products by offering a budget option to your most cost-constrained customers.
Losing customers is a perpetual issue, but you may lose more during a downturn. You may experience increased defection to other suppliers, and it’s highly likely that the bankruptcy rate will rise too. Some businesses will try to ride this out, but we are being warned of a longer recession than normal.
So maybe it’s best to get on the front-foot as soon as possible, and invest in finding new customers. Don’t wait until the hard times hit, by which point your rivals may have travelled a few steps ahead of you. All the leading textbooks report that increasing investment in new business acquisition is a good idea, providing your finances can support this move.
Consider your target audience and examine how you might expand this group. This is often the ideal moment to approach a reputable data supplier who will offer your company some business-savvy advice and information. They will also supply you with a list of targeted ‘GDPR-safe’ prospects.
Every business textbook will tell you that ‘return on investment’ from existing customers will usually be far greater than with the same amount of investment in seeking new customers. Increase your contact with existing customers. Discover their pressure points. It may be wise – when thinking about the long term – to assist a struggling customer now.
Your CRM (customer relationship management) data is the key to securing additional value from your customer base. Unfortunately, as every sales manager knows, the data in your CRM will eventually decay. Therefore, consider getting your data updated by a reputable supplier immediately.
Try to maintain contact with the people who purchase from you. Job changes present opportunities, just as much as challenges. You may be able to follow existing contacts to their new organisation, and develop a new customer relationship.
You may also be able to obtain an introduction to the person chosen to replace your previous contact. Never underestimate the importance of investing time and energy in building relationships. It usually pays back well.
Instead of simply contacting people more often, it’s sometimes better to take a more pro-active approach. Make that telephone call or send an email or texted message, when there is a valid reason to do so. The best data suppliers, such as Corpdata, offer services such as their ‘Visible Client’ which alerts you to new, relevant and important information. This is the perfect time to make contact.
Recession isn’t fun, but it doesn’t have to be terrible either. There will be opportunities. Remember:
- Be pragmatic and take suitable precautions;
- Stay positive;
- Look for opportunities;
- Guard and nurture your customers;
- Get active to replace those that will inevitably disappear.
This article comes courtesy of Corpdata Limited, specialists in legally-compliant B2B marketing data that you can trust to achieve exceptional results.