Key Takeaways:
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The risk of recession is slowly but surely rising as global turbulence continues.
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B2B businesses are more likely to realize outsized gains before, during, and after a recession if they prepare to take advantage of opportunities, particularly in periods of more volatility.
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As terrifying as it may seem, some great sales strategies can be implemented to ensure your business is recession-proof and in a better position to move forward quickly when growth returns.
The next recession may be on the horizon.
By August 2023, it is projected that there is a 25.15% of probability that the United States will fall into another economic recession.
That doesn’t mean your business must suffer. Following the right sales strategy can keep your business afloat – and even grow during a recession.
This blog post will explore how a recession can affect sales and provide some recession-proof strategies for B2B businesses.
By the end, you’ll have a game plan for tackling a recession – and coming out on top.
Is the Next Recession a Threat to B2B Businesses?
In the US, the last recession officially ended in June 2009. However, many businesses felt the effects long after that. Some companies are still struggling to recover.
So, is the next recession a threat to B2B businesses?
There are several factors to consider when evaluating this threat. First, let’s look at what causes recessions.
According to the National Bureau of Economic Research, recessions are caused by “a significant decline in economic activity spread across the economy, lasting more than a few months.” This can be caused by various factors, such as an increase in interest rates, a decrease in consumer confidence, or an increase in oil prices.
Any of these factors could have a significant impact on B2B businesses.
For example, an increase in interest rates would make it more expensive for companies to borrow money for inventory or expansion. A decrease in consumer confidence could lead to a reduction in demand for products and services. And an increase in oil prices would likely lead to a rise in transportation costs.
Of course, not all recessions are alike. Some are more severe than others.
The last recession was particularly brutal, with many companies going out of business altogether. It’s important to remember that even during less severe recessions, some companies struggle while others thrive.
So, what can B2B businesses do to recession-proof their organizations?
Most organizations do not prepare for an upcoming recession. According to a Bain survey,
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Only 43% of sales organizations develop plans for a recession well in advance
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Some 86% of companies that create a plan well in advance focus on using the downturn to gain market share
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50% of companies make their plan shortly after the recession hits
The fact that many businesses survived the last recession did not happen by chance; when necessary, the companies shifted course and their approaches to weather the downturn.
Businesses that are adaptable, future-ready, and willing to change will be able to survive any economic downturn. There is no one-size-fits-all answer, but there are some strategies that can help.
First, it’s essential to have a clear understanding of your customer base and your place in the market.
During a recession, customers may be more price-sensitive and less likely to make large purchases. Knowing your most loyal customers and their needs during tough economic times is essential.
It’s also essential to have a flexible pricing strategy.
During a recession, you may need to offer discounts or promotions to compete on price. But be careful not to cut costs too deeply – you don’t want to erode your profits or damage your brand image in the long run.
Finally, despite the economic environment, focus on generating sales, even during recessionary times. The response from the consumers may be slow and delayed; however, the demand for the goods will always be there, so don’t cut back on your sales operations.
These measures can help ensure that your business will weather any future economic storms.
How Does a Recession Affect Sales?
A recession can significantly impact sales, as businesses are typically more conservative with their spending during economic downturns. This can lead to reduced demand for goods and services, leading to layoffs and other cost-cutting measures.
While a recession doesn’t necessarily mean people will stop spending money altogether, they may be more selective about where they spend their money. This is where having the right sales strategy for business growth can make all the difference.
If your business can offer products or services that are seen as essential or that offer good value for money, you may weather the storm of a recession better than those who don’t have such an offer.
Of course, it’s not always easy to change your sales strategy mid-recession. But if you’re able to adapt and adjust to the current climate, you may be able to come out of the recession stronger than ever before.
7 Successful Recession-Proof Strategies for B2B Businesses
1. Diversify Your Products & Services
Investing in diverse products and services is crucial for any business.
By spreading your risk across different areas, you can protect yourself from potential downturns in any one particular area. Diversification can also help you to tap into new markets and reach new customers.
By offering various products and services, you can appeal to a wider range of people, increase your chances of success, and increase sales during recession.
It might also mean cutting down on some of your less profitable products and services to focus on the ones doing better.
Recessions can be challenging for businesses, but diversifying your offerings can increase your chances of weathering the storm.
2. Review Your Pricing Strategy
When reviewing your pricing strategy during a recession, you should keep a few things in mind.
First, you need to make sure your prices are still competitive. This means you may need to lower your expenses to stay competitive with other businesses in your industry.
Second, you must ensure your prices align with your costs. If your expenses have gone down, you may be able to lower your prices without sacrificing your profits.
Finally, you need to make sure your prices are still sustainable. This means you need to be sure you can still make a profit even after lowering your costs.
It’s also worth considering offering discounts or promotions to boost sales.
3. Gather Customer Reviews & Testimonials
As the world economy shows signs of a recession, it’s more important than ever to ensure your business is in good shape. One way to do this is to gather customer reviews and testimonials.
Customer reviews are a great way to show potential customers that your business is reputable and trustworthy.
They also help to boost your search engine rankings, which can help you attract even more customers. And during a recession, customers are more likely to research businesses before making a purchase, so having positive reviews can help you stand out from the competition.
If you don’t have customer reviews or testimonials, now is the time to start collecting them. You can post a call for reviews on your website and social media channels or reach out to customers directly and ask them to leave a review.
4. Invest in Data-Driven Insights
Now is the time to rethink your business strategy and make data-driven decisions to help you survive and thrive during the next recession.
Investing in solid insights will give you a competitive advantage when the recession hits. Keep your team focused on making data-driven decisions before, during, and after the recession. This can be accomplished by reinforcing a data-driven approach throughout business interactions.
Data-driven insights are an effective way of creating growth strategies by identifying trends and patterns among customers.
So what are you waiting for? Start investing in data-driven insights and position your business for success in the next recession.
5. Increase Your Marketing Spending
Some businesses immediately cut marketing spend when they see a recession on the horizon.
However, this can be a mistake. While it’s true that discretionary spending is usually the first to go during tough economic times, businesses that maintain or even increase their marketing spend during a recession can see significant growth.
During a recession, customers are more likely to be value-conscious and look for deals. Your marketing campaigns should reflect this by emphasizing your company’s value proposition.
You can also use targeted marketing to reach new audiences who may be looking for products or services like yours.
Lastly, don’t forget that your competition will likely cut back on their marketing spend. This presents an opportunity for you to gain market share and improve your position in the marketplace.
6. Focus on Customer Retention & Success
According to Business.com, returning customers spend 67% more than new customers.
As we enter a period of economic recession, businesses must focus on retaining and increasing sales from existing customers and ensuring their success.
Now more than ever, investing in your existing customer base is crucial and ensures they remain loyal to your brand.
So how can you keep your customers happy and engaged during a recession? Here are a few tips:
Keep communication lines open. Let your customers know what’s going on with your business and how you plan to weather the economic downturn.
Offer discounts and specials. When budgets are tight, customers are looking for deals. If you can offer incentives that help your customers save money, they’ll be more likely to stick with you during tough times.
Go above and beyond. Excellent customer service is even more critical during a recession. Go out of your way.
By focusing on your customers and their success, you can weather the storm of a recession and come out stronger on the other side.
7. Build Your Email List
Adding more quality leads to your email list should always be a priority, regardless of whether we’re in an economic recession.
However, it can be challenging to maintain a consistent flow of fresh leads during tough times.
You can use a few strategies to help keep your email list growing during a recession.
First, ensure you consistently create quality content that will attract new subscribers. You can also offer incentives for signing up, such as discounts or freebies.
Finally, stay active on social media and make it easy for people to find your sign-up forms.
Following these tips can help ensure that your email list continues to grow even during a recession.
Final Thoughts on Sales During a Recession
Without being original, competitive, and creative, it’s frequently impossible to expand and scale a firm during a recession.
As a B2B business owner, it’s critical to be ready for crises, economic downturns, and other dangers to your company. Recession-proofing your firm is always a good idea, regardless of whether a new downturn is imminent or you want to be ready “just in case.”
