There is opportunity in a recession (yes, the r word....) but it takes a new and deeper understanding of the customer to see it. Most organisations do not have a deep or coherent view of their customers but can survive without this in the good times. In the bad times they pay the price for this neglect and are forced to compete on existing criteria, especially price.
Any significant shift in customer behaviour (however it arises, recession or otherwise…) is an opportunity to re-connect with our customers and challenge prevailing assumptions about what they want and how they want it delivered - to put the sword to 'sacred cows'.
In the B2B world it is a golden opportunity to re-position from a vendor to a solution-provider, moving-up the value chain and elevating customer relationships. This is something many organisations state they want to do but find hard to make happen in the good times as their priorities are elsewhere (fulfilling orders and growth strategies) and their customers lack the ‘burning platform’ necessary to make them receptive to new ideas. In a recession it is a brave or foolish manager that refuses to consider a new and compelling value proposition.
This change requires that we better understand and actively engage with our customers. Victory can go to the knowledgeable and the responsive and not simply to those that can best compete on price.
Understanding the customer’s pain is key but don’t assume the pain points are the same as before but just more painful; there will be new needs and identifying these is the place to start. The opportunity is to broaden and elevate the discussion and jointly agree to shift the goalposts and thus take the relationship to a deeper level. This will take time but if correctly targeted and managed it will pay and change the relationship for the better and for ever.
Typically there are opportunities to take business away from adjacent spend areas and competitor’s who fail to see the opportunity. In good times customer’s may not feel consolidating spend is worthwhile or they prefer to spread the risk across suppliers but these concerns go out of the window when survival, cost and value come to the fore. Where previously customers preferred to keep certain activities in-house they may now be open to outsourcing them. Where they preferred to own assets they may now be willing to share them with competitors. Where ‘Not Invented Here(NiH) ruled they may now be open to Was Invented Somewhere Else (WiSE). The deeper the recession the more open they will be to re-consider previous ‘sacred cows’ and change the way they do business across their entire organisation.
So, our advice is:
1.Spend more time with your major customer’s and get to know how they are impacted by the downturn and current plans to deal with it-look for new insights and challenge assumptions;
2. Use these insights to identify new ways to help them beyond current offerings and lower prices and explore areas that they may have previously rejected but may now be open to – finding new sources of value is key;
3. Re-visit your strategy and re-orient it towards the new market conditions – success will go to those that think the best, the agile and the courageous - and this may be a better time to change direction than you previously thought, both your own and your customers’.