Recessions are tough. No doubt about that. But they can also breed innovation and lead to smarter use of technology. As with most things, there are two sides of the same coin. So how can digitalization help you get out stronger on the other side of a recession?
Together with Cloudity, we invited a panel of digitalization experts to the Surviving 2023 Summit: How to survive and thrive in a recession. Carl-Johan Kihlbom, Senior Product Manager at Teamtailor, Magda Frątczak, Global Sales & Marketing Director at Cloudity Group, and David Rådberg, Senior Regional Vice President at Salesforce, discussed the approach businesses should have during a recession. Here are the key takeaways.
This article is part of a series summarizing the keynotes from the Surviving 2023 Summit: How to survive and thrive in a recession. Read the previous article: Doing more with less in sales.
How can digitalization during a recession help people and businesses come out stronger on the other side?
A recession has many negative effects attached to it. Unemployment, high interest rates, and increased food prices are only a few. But it is also a source of innovation. When the game plan suddenly changes, and we find ourselves in a new economic climate, we’re forced to think in new ways.
There are many examples of that throughout history, AirBnB being one of them, which sprung from the 2008 financial crisis.
But how can digitalization during a recession help businesses in their day-to-day operations right here, right now?
Magda mentioned how using your customer data can be a huge competitive advantage and gave an example from a client. They had a lot of data spread all over, leading to lost opportunities. By structuring the data, they could use the insights for upselling existing customers.
“In three months, the client delivered higher revenue from the same database than in the last 18 months because they use the technology. It helps them structure the data and make it understandable.”
Read also: Turn your headlights on with structured data and drive your business forward
Invest or cut costs in a recession?
When money is tight or times are uncertain, it’s easy to cut down on everything. It feels like the natural thing to do. But you can’t get out of a crisis while hitting the brakes. In order to not only survive but to come out stronger on the other side, you need to hit it at full speed. The panel agreed that focusing on the customer is one way of doing it. How can you produce more value for them with less?
“If you only cut costs and don’t focus on innovation, you’ll be far behind the competition when the crisis is over. Work on your existing customers, make them feel better and invest in digitalization such as AI. Make that strategic decision,” Magda said.
“That’s where I think the focus on customer experience becomes really important. And digitalization is a way to offer new customer experiences,” Carl-Johan said.
Start small in digitalization projects, always
Initiating huge digitalization projects is far too common, according to the panelists. And the risk of failure is extremely high. That’s why it’s a better idea to implement digitalisation during a recession through one small change at a time – making it easier to see the effects at an early stage. And it doesn’t have to be expensive. Carl-Johan’s advice:
“The key is to start small. Do lots of small experiments using free tools to begin with to figure out the opportunities that could have a big impact. And as you start seeing results, pull that thread and start scaling up.”
Read also: How to take the next step in your digitalization journey
Maximize the tools you already have
An important point to make is that your digitalization project doesn’t necessarily require new tools or solutions. Look at what you already have. How can you make the most out of it?
“Reach out to your existing vendors and figure out how you can make the most out of the tools. There are often overlooked potential that won’t cost you anything beyond what you’re already paying,” Carl-Johan said.
But if you find yourself in a situation where you need to look for new tools, go for the ones that are flexible and work well together. So you don’t have to replace them as you grow and your needs change.
“You can do so much with automation tools like Zapier, for instance, where you can connect your own workflows. And there are also many companies focusing on integrations, like Oneflow,” Carl-Johan said.
To sum it up
The need for digitalization and innovation doesn’t decrease just because we have a recession on our hands. It’s actually more important than ever. Here’s the experts’ advice:
- Recession can be positive in the long run as it often breeds innovation.
- AI is here to stay and those who embrace it will be the winners.
- Structure your customer data so that you can deliver value to your customers and do upsell and cross-sell.
- Don’t hold back on investments. It will make you come out stronger when the crisis is over.
- Think about how you can produce more value and improve the customer experience.
- Starting small in digitalization projects is key.
- Look at the tools you already have. How can you make the most out of them? Can you integrate them?