Strategies for Dealing with a Declining Market
Companies big and small are concerned about the economy (heading into a recession)
There are several strategic options, including:
1. Cut costs before the downturn
2. Reallocate resources
3. Adjust messaging to reflect client needs
4. Review, update and implement a talent strategy
Let’s tackle this in reverse order.
Review, Update, and Implement a Talent Strategy.
Most Small and Medium Businesses (SMBs) don’t have a talent strategy. They fly by the seat of their pants, filling and eliminating roles based on market dynamics. As a result, there’s more stress for everyone because there’s never enough people when times are great (overworked staff), and there are too many people when times are tough (resulting in job loss).
The top 3 priorities for Job Seekers (in order) are 1) work-life balance, 2) compensation and benefits, and 3) team culture. Don’t underestimate the importance of work-life balance as part of your talent strategy, and frankly, your growth strategy. To grow during the next growth cycle, you’ll need to give your team tools that allow them to do more, without much extra effort, so they can have the work-life balance they’re looking for.
Potential employees and current staff are looking for ways to spend more time on the things they love. So whether that’s spending time with family in the evenings, or learning on the job, job seekers and staff are looking for tools that allow them to get their work done during regular work hours. And don't underestimate the importance of "having fun" at work.
LinkedIn published an in-depth paper “The Reinvention of Company Culture” that touches on these and other important talent considerations. READ IT HERE
Adjust Your Messaging
What was important to your customers 6 months ago probably isn’t today. For example, telling someone you can help them process more business with the same staff won’t be important when your customer is dealing with a 40% decline in business. This is where you have to hard pivot your messaging – instead of helping them process more business with the same staff, tell them how your company eliminates wild staffing swings associated with market swings by leveraging technology. Same result, different message hitting on what’s important to your customer today.
As a mortgage lender, you may want to talk about your ability in getting "hard deals done" instead of competitive rates. Who cares about a 0.10% difference in your rates if you don't use common-sense lending practices or every closing is a gong-show?
Jake Dunlap, Founder & CEO of Skaled, believes adjusting your messaging is the most important piece of B2B sales in a down market. Unfortunately, he typically sees companies get desperate instead and amp up their old messaging. You can read his full article “Thriving in B2B Sales in an Economic Downturn” HERE
Most people think about reducing headcount as a proactive cost-cutting measure when heading into a recession. And while that might be a viable strategy (essentially cut costs and “wait out the recession”), you probably aren’t thinking strategically enough. We recommend you reallocate resources, so you maximize customer satisfaction. Companies that rate high in customer satisfaction actually grow during a recession. And that growth will sling-shot you out of the recession when the market turns the corner.
If you’re a mortgage lender, for example, you can have each of your underwriters contact five of their sales reps or mortgage broker clients per day. Sometimes they can ask for business, and other times they can offer helpful tips. Why not put some of those underwriters on the road with the sales team and approve mortgage applications “on the spot?”
And don’t forget to ask your team what they think is the best course of action. Some people will be against doing anything outside their job description while others will relish the opportunity to do more. Implementing just one or two of the team’s ideas as part of a broader project will increase their buy-in and improve your results, not to mention tell you who might be leadership material.
Cost cutting doesn’t have to mean the elimination of services and products for your customers. It should mean finding ways to automate processes as much as possible, including answering frequently asked questions. You can easily accomplish this using tools like chatbots and making it easy to find answers on your website. You can take it a step further and eliminate the questions in the first place. These things reduce costs AND improve customer satisfaction. What’s not to love about that?
Bain & Co. wrote an interesting brief “Beyond the Downturn: Recession Strategies to Take the Lead” that makes the link between rating high in customer experience and ROI. READ THE BRIEF
About Value Connect
You might be wondering why we're writing about how to thrive in the midst of a downturn. There are a number of reasons, including one of our corporate values, Dedication: We win when our customers win. What we've always found is our customer's success is tied to ours and we are happy to share insights that can help.
Contact us if you're interested in learning more about Value Connect, and how we streamline the appraisal process for all stakeholders (lenders, appraisers, originators) to increase Customer Experience (CX) and market share.