Why The Economic Winter Is a Great Opportunity to Streamline Operations and Build a Powerful Brand?

The article is contributed by Christopher Roberts, Founder and Managing Director, Engaged Strategy.

A recession is a difficult time not just for companies but for consumers too. When the going gets tough, people immediately cut down on expenses. They tread cautiously, investing only in necessities and in established brands. This has a direct negative impact on luxury goods and lesser-known brands. For instance, a consumer who would prefer buying a luxurious convertible in good times will purchase a high-end car that comes with the promise of durability and efficient fuel management during an economic winter.

On the other side of the spectrum, reduced consumer spend during an economic winter shrinks the revenue pie for companies. Multinationals that have established their back offices in India are likely to cut down on staff here to reduce expenses.

Along with axing jobs and reducing the headcount en masse, organisations also indiscriminately cut costs on elements that matter most to their employees – salary cuts, scaling down pantry operations, freezing fringe financial benefits, etc. While these are operational challenges, one big mistake that many organisations commonly make is reducing their marketing activity.

While this is the traditional mindset and approach to an economic winter, let me present to you a highly creative alternative approach that can not only help you tide through recessions successfully but can also help your brand stand out when the economic winter ends and turns into spring.

During an Economic Winter Let Your Coat Shine the Brightest
Step 1 – Streamline Your Operations
Step 2 – Engage Your Staff to Reduce Costs and Improve CX
Step 3 – Strategic Behaviours to Retain Your Customers
Step 4 – Finetune Your Unique Value Proposition
Step 5 – Retrench Sensibly
Step 6 – Increase Advertising

During an Economic Winter Let Your Coat Shine the Brightest

An economic winter is a perfect time to showcase your strengths and position yourself powerfully in the market. To begin with, do not follow the herd. Always remember that when the going gets tough, the tough get going.

Step 1 – Streamline Your Operations

To begin with, streamline your operations. Survey your customers via a variety of surveys, including pulse surveys, their experiences at key touchpoints with your business, about your products, services policies, etc. Ensure that this data provides you with actionable insights that can help you streamline your operations, reduce costs, and provide your customers with a great experience even during difficult times.

Step 2 – Engage Your Staff to Reduce Costs and Improve CX

Remember that your staff, especially your frontline staff, knows your customers and the market the best. They have their fingers on the pulse of your customers - what they like, what they prefer, and what they think about your brand, as well as policies that do not make sense. This is critical information that can give you an undue advantage over your competitors. Hence, it is crucial that during an economic winter you engage staff to contribute towards developing improvement initiatives that can help you reduce costs and improve efficiencies. I conduct speed ideation sessions, for instance, with staff that generate many ideas very quickly.

It is common sense that engaged staff go above and beyond to create customer experiences that are worthy of recommendation. In my experience with my clients, I have found that word of mouth is 4X more powerful and effective than advertising at influencing purchase decisions; besides, a great customer experience is a key to driving positive word of mouth.

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Customers’ experiences can widely influence how they view your company or brand. Check out how you can create a powerful customer experience strategy.

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Step 3 – Strategic Behaviours to Retain Your Customers

Everyone conducts customer experience surveys. But what is more important is that your surveys do not provide you with means, medians and modes, but rather give you critical actionable insights. It must help you identify key drivers and answer business-critical questions, while also identifying at-risk customers.

Remember that all brands are leaking buckets where they have an in-flow of customers, while there are customers who leave your brand. Customers often leave a brand for three reasons:

1.      They are no longer in need of such products or services.

2.      They are unhappy with a brand.

3.      They have found a better option in the market.

There is nothing much that you can do with the first category of customers leaving your brand. But with the second and third categories, you can definitely plug many of the leaks and stop your existing customers from leaving.

Once you identify such at-risk customers, develop and apply powerful strategies to retain them. Apply the Pareto Principle, commonly known as the 80/20 rule, where you identify the top problem points and focus heavily on resolving them. Once you establish a strategic practice to plug such customer leaks, guess what happens! You spend lesser on new customer acquisition while you also enjoy improved word of mouth. In difficult times, these are powerful economic benefits that can help your brand grow rather than flatline or hit the downward curve.

Step 4 – Finetune Your Unique Value Proposition

During a crisis, many brands are banging their drums aloud. But it is the one that is extremely unique and which aligns with the interests of consumers that receives the most attention. An economic winter is a wonderful opportunity for you to revisit your unique customer value proposition and assess if it truly resonates with your customers. Take the help of an expert to help you look at your CVP objectively and review it to ensure that you receive a bigger share of the market.

Step 5 – Retrench Sensibly

If your brand is in a dire situation and needs to lay off staff, then it’s important that you do not follow the common route of retrenching an entire team or department. Instead, go individual. Flag every employee as being operationally critical, a high performer, or a potential high performer.

Once you have identified these three critical types of employees, develop retention efforts specifically for them because they have the potential to keep the critical functions of your business going with their knowledge, experience, skills, and expertise.

Remember that sacking staff en masse and later hiring for critical roles can ruin much of your time in training new employees and getting them up to speed. This is a wasteful effort during an economic crisis when you need your operations to run at high speed and with the utmost accuracy.

Step 6 – Increase Advertising

When an economic winter sets in, one of the first expenses that is stopped or dramatically reduced is on advertising. Traditionally, this has been the practice. But sit back and think about this.

I mentioned earlier in this article that during a recession consumers purchase more from brands that they trust. During an economic downturn, most organisations cut down on their advertising spend. This means that they are not beating their drums loud enough for consumers to remember them. Hence, they experience a naturally smaller share in the already shrunk wallet.

In such a situation if you increase your advertising and share of voice, you build more awareness about your brand and encourage greater consideration for your products and services by consumers. The greater your share of voice during an economic crisis, the larger can be your share of the revenue pie on products and services that people are inclined to purchase during difficult times.

Remember that what you as a business do during a crisis define your future in the good times that follow. You may or may not be impacted negatively during the economic winter, but the impact that you create via powerful employee engagement and customer experiences in such difficult times is what helps you become a brand worthy of recommendation. After all, in times of uncertainty, customers always lean strongly towards the familiar and trustworthy.