Business Strategy

How to recession proof (or prepare) your company with technology.

It is an unprecedented time. Life has drastically slowed due to the Coronavirus disease 2019. From businesses to schools, what was once our everyday life has faded into the background and is now a closely-distant aspiration. Many have been asking themselves why they weren’t prepared for a socially distant society. While hindsight is always 20/20, there are so many solutions and tools that can be used during this time to help manage businesses and personal life. 

With the new state of the pandemic, a financial recession has occurred. What is a recession and how can businesses prepare for one? A recession is an economic decline that lasts for at least 6 months. Over the past 100 years, there have been 17 recessions and one major depression. That is about 1 recession every 5 – 6 years on average. The chance that another recession will occur outside of this pandemic are extremely likely. 

So how do you prepare your company to combat the collateral damage of a recession? Are there things that you can tackle now during today’s pandemic-driven recession that will help safeguard your company for the future? Below is an outline of some best practices around how to utilize technology to recession-proof your business. 

Eliminate wasted expenses

Most companies are subject to wasted expenses, and many of them are centered around certain processes. Oftentimes, these manual processes erode other aspects of the business. Since now is a unique circumstance, use this time to focus in on what your company isn’t doing well and improve on it. Whatever situation your business is in, there are a few simple steps that you can take using technology to decrease the amount of wasted expenses. 

During a recession, eliminating wasted expenses can help save costs to cover other important costs like payroll, rent, and insurance. First, talk to your employees about what is working and what isn’t. It doesn’t have to be an extensive conversation. 

Using a tool like SurveyMonkey to send out a two-question, open-ended survey with questions like: “What is the most tedious part of your job?”, “What is the most difficult part of your job?”, or “If you could change one part about your job, what would it be?”. 

An open-ended survey allows for a wider range of responses and doesn’t prompt employees to leave a canned response like via a multiple choice survey. Be prepared to get a lot of the same responses and some responses that you really didn’t want, like not enough vacation. It is harder to run statistics on an open-ended survey in comparison to a multiple choice survey, but if it is kept short, it should be easy to see pattern clusters. Hopefully, about 20 to 30 percent of the open-ended responses will have value that can quickly be realized. 

Odds are that someone will comment on the kind of technology that they are using as a difficult or tedious part of their job. More often than not, companies buy and train employees to use softwares in silos. For instance, a company may use Hubspot as their marketing automation software, Salesforce for its customer relationship management (CRM) tool, and Quickbooks for finance and accounting.

Issues begin to occur when software is not implemented or integrated properly. For example, if Hubspot won’t push qualified leads to Salesforce, custom development work will most likely be required. This breakdown then causes the marketing team to duplicate their work, manually uploading qualified leads into the CRM, or the sales team failing to capitalize on opportunities that are ripe for a sale. As a result, other aspects of the company break down, like reporting. 

For example, if your CEO asks out of all of the leads that your company gets from its website, how many convert from a qualified lead to a sale, a strong reporting capability that spans across each software will be needed. If your sales and marketing teams have to go from system to system to understand leads to sales conversions, this could be a loaded question. 

Solid reporting can help your company understand what is wasted on all fronts. Can you A/B test your marketing campaigns to understand if paying for ads is fruitful? Are there certain products or services that only a small number of customers are buying or using? How much does it cost your company to continue offering those services and is it worthwhile? 

Commonly, most companies don’t know the answers to these questions. If a company’s software and systems are integrated correctly, answering these questions should be quick and easy. However, if they are not, it could take your employees days or even weeks to come up with certain metrics to allow you to make decisions about your business and its wasted expenses. 

By looking internally at a company and its employees, wasted expenses can be identified to move costs and resources from one part of the company to another. A byproduct of doing this can be greater employee efficiencies, better insight to company performance, and most importantly, improving the product or service to make it more desirable, even in a recession. 

Creating additional revenue streams

Ideally, once wasteful expenses are eliminated, businesses can use those resources to diversify revenue streams. How will the changes that were made result in finding additional opportunities? Has removing the wasteful product or service allowed for the conversion of those resources to be used for a new product or service? These are important questions to understand, particularly in a recession, where customers’ spending is likely to be lower than in a stable economy. 

Many businesses, especially those that are looking to recession proofing themselves, should consider how to reach as many customers as they can. When a recession hits, it forces customers to prioritize how they spend their money. Finding new ways to provide products or services for less or enhancing them to provide added value creates a stickiness amongst customers, prioritizing your company above others.

Adding additional revenue streams is often centered around taking businesses online or providing a virtual solution. For some businesses, this is more difficult than others, but if a company is selling products in a store, there are a number of different technology tools that can be used to process an online ordering like Magento. For restaurants, there are tools like GloriaFood that allow restaurants to process online ordering. 

Class-based services, like workout classes, can live stream content via Facebook or Youtube. If a company is an event space or institution, think about how to make the experiences in the space virtual. Virtual reality is more of a commitment because it needs to be done well technically and creatively, but thinking about it as an investment can be fruitful, even in the future. It will give your institution a broader reach for those who cannot visit in person, regardless of the country’s economic state. 

For B2B companies, pushing a company’s value proposition is a great way to focus on what customers are looking for and how to add to additional low-cost products or services to what is already being offered. By offering a free audit or consulting video conference, a company can really push ideas around how their product or service can help a prospective customer. Another option is offering “how to” or industry expertise documents to showcase a company’s expertise as well as understand what prospective leads might be interested in the company’s specific services. Providing short and concise case studies to prospective clients is another great way to demonstrate a company’s expertise in a particular industry. 

Marketing automation software allows companies to send out industry specific content while tracking and collecting information on each lead. Using the proper software should show what kind of content resonates with customers and what kind of “add ons” they are looking for. Technology can be used to add new and different revenue streams and provide different and creative ways for customers to interact with your company.

Selecting the right tools 

There are a significant amount of tools that one can use for their business after wasted expenses have been eliminated and new ideas for additional revenue streams begin to emerge. MotionMobs posted examples of a handful of useful tools on its Linkedin page. There are so many great tools out there to use but they are not a one-size-fits-all. 

Be sure to seek out software that does exactly what you need it to do. Think about how to select software with the end in mind, planning out what you want your software to do, not letting a sales person tell you what it can do. When planning out the desired needs of a software, understanding a company’s key performance indicators or KPI’s is a great place to start. By defining the KPIs, a company is able to define what they want to measure. When a company defines what it wants to measure, it gives direction to how those things are going to be measured. By focusing on software that can measure exactly what is important to the company’s current and future state, data can be used to understand where to increase or remove resources. 

The reporting capabilities of the chosen software and how to display the data is almost just as important as the data itself. If a company is not able to digest and communicate its data, then the data is useless. Understanding how certain software can group or organize data metrics by representative, department, or product will allow for a company to use data as its strategic advantage, especially in poor economic scenarios like a recession. In a recession, using data instead of “gut feelings” to show where resources should be allocated or what products or services should be enhanced is important so that the company is able to remain stable in volatile economic conditions.

Like the earlier example of knowing how many website leads convert into sales, the right marketing software can help with lead generation. However, first consider what kind of reporting capabilities are required in order to collect data and run this report or like reports consistently. Because the company is interested in having a clear picture around how many leads convert to sales, then focus on selecting a sales automation tool that tracks all sales and can easily produce that information itself or be integrated into a reporting tool. Lastly, seek out a marketing automation software that integrates well with the chosen sales and reporting tools to source leads and provide a complete picture of leads to closed sales conversion. 

Don’t be afraid to start small with one license or a free version of the software. Test it out personally or find an employee that is excited about using technology as a tool (ideally uncovering who these employees are in the 1 – 2 question survey that was mentioned at the beginning of this post). There are so many tools that companies can utilize to understand how to recession-proof its business, but don’t undervalue the understanding of what the end picture needs to look like before selecting software. 

In the end, recessions are inevitable, and what goes up must come down, but that doesn’t mean that your company has to do the same. Take time now to think about how you can invest in your company for the future. Whether it is cleaning up wasted expenses or selecting a new technology to implement, always use data to drive these decisions and have an end goal in mind. This will allow your company to focus on the importance of reaching more customers and continuing to grow, even in challenging economic times.

By Jennifer Fisher