Winning in an Economic Downturn
Part 1 of 2
As the world grapples with the effects and uncertainty of COVID-19, businesses are feeling the pressure. There’s no doubt about it, we’ve slid into an economic downturn.
Some industries have already taken a direct hit (i.e. restaurants, travel, etc.) and laid off significant numbers of employees. Most B2B solution providers (i.e. software, professional services, etc.) are slowing down their activity and decision-making as they try to gauge the situation at hand.
We’re not sure how long the downturn will last, but some things are clear. The world is different now than it was just a month ago. Markets are changing, buyer behavior is evolving, and your business needs to adapt right now. These themes are starting to emerge as trends across the hundreds of win-loss interviews that Clozd consultants conduct for B2B clients each month. In spite of the challenges, solid businesses should sense an opportunity.
Macroeconomic downturns filter the weak and unstable competitors out of each market. They divide the strong from the weak. There are many studies, from reputable management consulting firms, that analyze what happens. The Boston Consulting Group conducted a study that showed how 30% of companies that were among the top-10 in their respective sectors dropped off that list during a recession. Fewer than 10% of those that dropped off ever made it back. Their conclusion is that a downturn magnifies the relative strengths and weaknesses of each company. A study by McKinsey concluded that when companies manage to double-down on their investments in research/development and sales/marketing during a downturn, they emerge with higher valuations and surging momentum in the upswing.
Every company is under pressure right now due to COVID-19. There is no way to avoid the risk - so don’t bother trying. Adjust your expectations and start taking action that will ensure you gain ground relative to your competitors during the downturn. Position your company to thrive, coming out of this crisis, by implementing the following tips.
Check out Part 2 of his article by clicking here.