Don't Just Survive, Thrive! A 5-Step Approach to Unlocking Growth During the Recession
With inflation soaring, interest rates rising, and stocks declining, we’re staring down the barrel of a recession. It certainly wouldn’t be the first. Historically, we know that in times like these, businesses go into hibernation mode, lowering operational expenses and battening down the hatches in an attempt to survive. Slowdowns, however, have historically resulted in many of the same disruptions that plague the national and international economy now, and businesses that remain active during slower economies are more likely to come out on top when things pick up again.
Here, we look at some of the steps and changes that an eCommerce business can make to weather any downturn and emerge stronger.
Keeping financially viable during a global economic crisis is a top concern regardless of what is going on in the national and international economy, but staying profitable during a recession in 2022 is much more critical. The key is to be proactive in lowering overhead costs and pivoting your sales and marketing strategy.
Here are some places to get started.
Top Tips for Businesses to Thrive in a Recession
- Automate where possible
According to an international economy analysis, by changing their technology, businesses can automate half of the activities for which they pay their staff $16 trillion in salaries. Though initially costly, automation can increase productivity by 0.8 to 1.4 percent each year. It can handle daily activities that employees frequently find monotonous and demotivating, as well as increase human productivity by lowering the bandwidth spent on coordination, cooperation, and task switching. Examine your operations carefully to discover places where automation can be used, and take the necessary steps to implement some changes that will pay off in the long run.
- Improve your technology stack
Even the leanest organizations are likely to have some redundancy in their tech stacks, so take a thorough inventory of everything you employ to run your business. You will most likely discover services that you no longer require and contracts that you may be able to negotiate to lower pricing.
Take this opportunity to review your eCommerce platform and architecture. Have you got everything you need to succeed? Are you utilizing too many tools which are complicating the customer experience or lowering employee productivity? If this is the case, a period of sluggish activity might be an excellent opportunity to update your eCommerce system.
- Use third-party resources wisely
Duplicate expenses between suppliers and retailers can go unnoticed for years in many business ecosystems, slowly eroding profit margins. Conduct a thorough examination of the third-party vendors you now employ in your supply chain and inventory management, marketing initiatives, and independent product development – is there any redundancy you can eliminate?
You might also find a few places where functions that are now performed in-house may be managed more efficiently and effectively by third-party providers like eShipper. This sort of analysis and realignment has the potential to increase earnings by making business operations easier, less expensive, and more efficient.
- Provide extra assistance to your customers
Make a list of the difficulties your customers may face during the downturn, and consider how you, your partners, or your providers can help them better withstand the storm. We’re all bracing ourselves for financial challenges right now, and in times of uncertainty, sometimes all we need is a helping hand–so listen to your customers and be open to extending further support.
Retaining business is just as important as driving sales, and going the extra mile for your customers will naturally turn into word-of-mouth referrals. According to a Nielsen report, 92% of people trust word-of-mouth referrals, and they’re 4 times more likely to make a purchase when referred by a friend. This makes word-of-mouth marketing your most powerful marketing tool, and it’s one that will help you come out on top when you’re on the other side of the recession.
- Enhance operations and provide a better customer experience
As business slows down, use your free time to enhance your internal processes and the quality of your deliverables, as well as to build a system for providing world-class customer service. If you want to survive this storm, you must provide best-in-class products and customer service more efficiently than your competition. This will significantly minimize client turnover while allowing you to service more customers.
Not sure where to begin? Ask your clients to rank your products/services and customer service on a scale of 1 to 10. For each answer that is less than a ten, consider what would have made it a ten. Collect two dozen replies, then meet with your team to create a list of things to do and projects to improve. This will ensure your success in the next key stage.
The Great Recession resulted in notable eCommerce breakthroughs and market upheavals throughout the world. We saw companies rise from nowhere, breaking ground and later being acquired by competitors.
This was a result of businesses adopting new models and venturing into new markets. Any eCommerce business can emerge stronger from a recession if it focuses on increasing efficiency, lowering costs, and increasing production.
eShipper is committed to developing eCommerce solutions that enable our clients to both survive and prosper. Interested in learning how we can help your business thrive in the looming recession? Contact us to get started.