We’re in an economic downturn. By definition, that’s not good for business. But there are ways how B2B businesses can survive in a recession. With 2023 being a year of economic uncertainty, these tips have never been more crucial.
In this article, we’ll cover:
- Diversify your offerings
- Focus on customer retention
- Market like never before
- Embrace technology
- Collaborate with other businesses
- Prepare for the recovery
But before we get to any of that…
What’s caused the current downturn?
The pandemic led to a huge drop in output as economies the world over went into lockdown. As the world reopened at the end of 2021, there were suddenly huge demands on resources that had seen their production slowed, chiefly gas and oil. These shot up in price.
This led to a huge, rapid rise in inflation across the world as it became far more expensive to produce and export all sorts of goods, from phones, to food, to the electricity we all use at home. Inflation has remained stubbornly high across the world. Then came the full-scale invasion of Ukraine.
Ukraine and Russia are the world’s largest food producers, and Russia is a massive exporter of gas and oil to Europe. As Russia was sanctioned, these commodities, which were once cheap and easily available, became expensive. As energy bills shot up, and food and other basic goods also stayed high in price, people were left with less and less money to put into the economy.
The same goes for B2B businesses. With their basic running costs up, it’s now harder for them to justify buying or renewing services. But, as bleak as all of this might sound, B2B businesses can survive in a recession. Here’s how.
1. Diversify your offerings
During a downturn, your prospects will often have less budget across their business. This makes them much more selective about what they buy. By diversifying your range of products, you can appeal to more customers with budgets of all different shapes and sizes.
This doesn’t mean going back to the drawing board and coming up with an entirely new slate of offerings, quite the opposite, in fact. It simply means breaking down what you already offer. For example, introduce more packages. Instead of larger, immutable offerings, break things down into smaller, cheaper offerings. Think of it as a range of essentials packages.
By doing this, you’ll likely have a range of offerings that are suited to a wider range of budgets. This is an essential way how B2B businesses can survive in a recession.
2. Surviving Recession in b2b: Focus on customer retention
We can all agree that it’s easier and more cost-effective to keep the customers you already have, rather than having to start the CAC over again. If you can, offer an incentive or rewards program of some kind. It could be a small discount for your most loyal customers, or a reward system for those who champion your product the most strongly.
This will also have positive knock on effects elsewhere. If you turn your customers into product champions, then it can lead to positive word-of-mouth reviews of your product. This will be particularly helpful if your champions love the customer support – always a critical factor.
Read also: How to survive and thrive in a recession?
3. Market like never before
During a downturn, it’s important to keep your product and your brand top of people’s minds. It’s on the frontline of how B2B businesses survive in a recession. Your marketing team’s budget will likely shrink during a downturn, but that doesn’t mean they can’t get creative.
For example; a great, vibrant social media presence, and highly targeted, well done SEO doesn’t have to cost anything extra, and can help boost your company’s brand visibility. With social media and SEO, that doesn’t necessarily just mean a boost in exposure to your existing customers either. It can also result in a boost for prospects and potential leads.
When in tough economic times, coordination between Sales and Marketing becomes even more essential.
4. Embrace technology to survive the recession
With the advent of AI, the pace of technology can seem difficult to keep up with. But a key part of how B2B businesses can survive in a recession is by getting to grips with the newest technologies, and seeing how much of an ROI they can deliver.
You can even start utilizing low or no-cost technologies right away, like AI bots. Whether you need some quick copy that requires little editing, or an on-brand image, AI can help do it in seconds. Utilizing AI in this way can help free up more time for your design and copy teams to work on larger, more consequential projects.
Bringing in tools that help automate parts of the sales process, like contract renewal, can also offer a boost.
5. Collaborate with other businesses
One key way that B2B companies can collaborate is by sharing knowledge and best practices. When companies face challenging economic conditions, it can be helpful to learn from others who have gone through similar experiences. By sharing insights and strategies, companies can avoid common pitfalls and identify new opportunities for growth.
Another way that B2B companies can collaborate is by partnering on projects or initiatives. For example, two companies might team up to develop a new product or service that neither could create on their own. By working together, the companies can leverage each other’s strengths and capabilities, and ultimately create something that is greater than the sum of its parts.
B2B companies can also collaborate by pooling resources. For example, two companies might share office space or equipment, or even combine their workforces in order to reduce costs. By working together in this way, companies can reduce their overhead and weather the economic downturn more effectively. Working together is one way how B2B businesses can survive in a recession.
Read also: How to be a recession-beating salesperson
6. Prepare for the recovery
After every storm comes blue skies – and this downturn is no different. Better times will return, and you need to be ready to go. That doesn’t just mean putting more money back into your departments’ budgets, it also means being ready to win back customers.
You might well lose a good chunk of your customer base during this downturn. They might well have gone to lower quality, lower-priced competitors, or tried to fill the gap left by your product with manual processes. This won’t last. You’ll need to be ready to win these customers back. Having something akin to a return-to-market strategy ready to go is a key part of how B2B businesses can survive in a recession – by looking at what’s coming over the horizon.
The key takeaways
In times of recession, businesses face unique challenges. However, there are several strategies that can help you weather the storm and come out stronger on the other side.
By diversifying your offerings, focusing on customer retention, increasing your marketing efforts, embracing technology, collaborating with other businesses, staying flexible, and preparing for the recovery, you can position yourself for success. Remember, the key to success is to stay adaptable, stay focused on your customers, and stay committed to providing value even in the toughest of times.