How To Outpace Your Competitors During Recession?

How To Outpace Your Competitors During Recession?

It is no secret that recession is cyclic; therefore, businesses need to work on strategies to not only survive but also thrive during the recession.

Currently, the world is experiencing a recession, as visible through the increased interest rates, failures of two major banks and significant layoffs across many companies but particularly tech companies.

The current recession has not emerged all of a sudden; the IMF previously predicted that the global economy would enter into recession this year. 

Undoubtedly, recession impacts businesses; however, it is essential to realize that recession affects all companies differently. Most importantly, preparedness ensures that companies can outpace their competitors. Here are a few tips businesses can use to outpace their competitors during a recession. 

1. Technological Investment

Investment in technology can boost the operational efficiency of a business. When businesses invest in the right technology, they can bring efficiency to their internal process, which further will help them to serve their customers. Currently, most technology and digital tools require a reliable internet speed to function seamlessly. Firms can use platforms such as Du and Speed Test to ensure that the internet speed of the office Wi-Fi is sufficient to guarantee efficient working of the different technological tools. 

However, instead of investing in technology with a blind eye, investing in the right technology is recommended to yield the maximum benefit while keeping the budget in check. 

2. Social Media Marketing 

There are over five billion active users on different social media platforms. With the right social media marketing strategy, brands can easily tap into their potential customers residing on social media platforms. Surveys indicate that 77% of the users end up buying products and services whom they follow on their social media accounts. Therefore, companies should invest in social media marketing to increase their revenue. 

3. Cash Flow Protection

Cash flow fuels the businesses of many sectors. During a recession, companies should ensure that their cash flow remains unaffected. If a business is in operation, there are always expenses associated with it; however, companies should be more mindful of their cash flow during a recession. Firms can protect their cash flow during the downturn by reviewing credit history and renegotiating their previous contracts to save more money. 

During a recession, companies should focus on increasing the runway irrespective of the firm size. Additionally, the firms should have a risk management plan if things take a turn for the bad. 

4. Focus On The Niche 

During the recession, it is all the more important to concentrate on the business’s core competencies by considering the most popular products and services. Instead of scaling the weaker products and services, the focus should be strengthening the niche. In addition, brands should look for ways to generate multiple revenue streams from their core product and service. 

5. Monitor Short-Term Micro Metrics 

A quick reaction can do wonders during a tough time like a recession. Companies can ensure the same by creating short-term micro metrics. When the company focuses on the short-term micro metrics, they gain the ability for quick reaction to make the critical changes to leverage an opportunity to increase the company’s revenue. 

6. Cut And Reduce Unnecessary Costs 

It goes without saying that during a recession, companies should diligently cut and further reduce any unnecessary costs to remain sustainable. A few ways of reaching this goal include negotiating supply costs, finding cheap vendors and flexible staffing options. 

7. Invest To Increase Customer Retention

Even during a normal financial situation, most of the business for the companies comes from the existing customer. Therefore, it is the ultimate necessity for companies to ensure customer retention during a recession. Compared to the cost of acquiring a new customer, the price associated with keeping an existing customer happy is cheaper. Subsequently, when the current customers are satisfied, they will ensure that they utilize the services and products of a company even during an economic downturn. 

However, companies should work on building customer loyalty even before the recession hits to have a solid foundation. A few ways of building customer loyalty are having a loyalty program and exclusive discounts for existing customers. 

Lastly, businesses must track the return on investment during the recession. Proper monitoring ensures that it makes the necessary changes to ensure maximum return on investment. Thus, companies with a robust strategic plan can ensure their survival and further outpace their competitors.