How Can Your Business Thrive in an Uncertain Business Climate?
In early 2000, a five-year-old start-up online bookseller called amazon.com sold over $600 million in convertible bonds. Amazon executives were uneasy about the economy and wanted to keep plenty of cash on hand in case of a crisis. A month later the dot com bubble burst and more than half of all digital start-ups crashed and burned – never to be heard of again.
If the crash had taken place one or two months earlier, we might not be familiar with Amazon Prime today. The cautious approach Amazon took two decades ago ensured that the business could ride out a tough time long enough to thrive when the recovery arrived.
We are in another uncertain period at present. Consumer spending has bounced back since the Covid pandemic, but inflation is rising sharply. US (United States) inflation was 8.3% in August. This was down slightly from 8.5% in July and 9.1% in June, but these figures are the highest the US has seen since the 1980s.
Gas prices are coming down but rent and food continues to increase. The stock markets have recently been struggling, entering bear territory just as many corporate leaders expected to see a ‘roaring twenties’ after the disruption of Covid.
It is hard to predict what will happen. Even economists do not agree, so the rest of us have little chance of being accurate. The economy and financial markets are unstable at present and may stay this way for some time – until we see clear indication of growth once again. In this type of uncertain business climate what can your business do to follow the example of Amazon?
Let us not directly compare the Amazon example. It is always good to keep some accessible cash on the balance sheet during uncertain times, but I want to look at business strategy and processes.
What can you focus on?
- Target greater efficiency. There will be areas throughout your business supply chain that can be improved. Focus on reducing costs. Explore how customer interactions can be managed more efficiently by improving self-service and improving automated help for customers.
- Create stronger loyalty. Create insights into what your existing customers love about your company. Why do they stay? What do they like and dislike? What can you do to create even greater loyalty, and can you use data analytics to identify when you might be about to lose a customer?
- Focus on attrition. Hiring and training new employees is always a major expense, but during a downturn it is an area you can really focus on – to ensure that the team is engaged and satisfied, and attrition costs are reduced.
- Assess workforce needs. What can you do to make your workforce more efficient, to help them offer a better service to customers, and to engage the workforce more effectively?
- Find a partner with a vision of the future. When planning your customer engagement strategy, it can pay to find a partner that always has one eye on the future so you can focus on keeping your cashflow positive while your CX partner advises you on customer trends and expectations.
Nobody can predict the future, but we know that after every downturn there has always been a business recovery. It just takes a renewed spark of confidence to get consumers buying and borrowing again.
In the meantime, engaging in these strategies will help to reduce immediate costs and will retain loyal customers. There is the added advantage that when a recovery does arrive, you will be well placed to benefit from focusing on these changes during uncertain times – it is a platform that will help you to fly as the good times return.
If you have any questions, please use my LinkedIn to contact me directly.