Business Innovation: The Key to Thrive in a Recession
Learn how innovation can help drive your business to be one of the businesses that thrive in recession. Don't just survive the recession, stay alive and thrive! Now that the bull is dead, the question is... can you outrun a bear?!
- Who Suffers the Most During a Recession
- Strategies for a Thriving Business in a Recession
- Competitive Intelligence (CI) and Market Research in Recession
- Don’t Just Survive the Recession: Stay Alive and Thrive
- Let’s Help Other Businesses Thrive During Recession
Who Suffers the Most During a Recession
There is this old joke where you and your buddy are out hiking, and you see a grizzly bear. It is going to attack. You look at your buddy and they are tying their shoes tight, getting ready to sprint, they say, “you know you can’t outrun the bear?” and you reply, “I don’t have to outrun the bear, I just have to outrun you!"
First Signs of a Recession
The COVID-19 pandemic has yet to peak, and already our global stock markets are taking a beating. It’s nearly impossible to take punches like that and not have long-term financial ramifications.
Our longstanding ‘bull' market is giving way to a ‘bear’ market. Kramer, Leslie. “An Overview of Bull and Bear Markets.” Investopedia, Investopedia, 8 July 2022, https://www.investopedia.com/insights/digging-deeper-bull-and-bear-markets/.
There are a ton of articles being written about ‘surviving a recession’, and I want to take a different angle.
I am very empathetic to the pain and suffering going on in the world right now. For the purpose of this piece, I am separating the health issue of COVID-19, and focusing on the financial issues it has revealed. This is a rare moment in history where people are helping each other, being kind, and looking out for one another. I am not going to touch on the health issue much in this article, but I do hope it gives some perspective on ways to alleviate related stresses.
Strategies for a Thriving Business in a Recession
Hopefully, your company has been thinking about a recession for the last couple of years. If your company hasn’t, you’ve got some work to do. You can do it, I believe in you, but you’re playing catch up and likely need to develop some new business strategies.
For your company to thrive in a recession, it must be proactive and adaptable. For example, in a legacy industry, a restaurant could offer catering services or expand into a new geographic area. When it comes to the B2B landscape, it can get a little more complex. Listed below are a few strategies and services that can be utilized for your business to thrive during these times.
Strategic Business Consulting
Strategic consulting can also be a valuable tool for businesses looking to understand not only how to survive a recession but to thrive in one. A strategic consultant can provide an outside perspective and help companies identify areas for growth and improvement. By analyzing market trends, consumer behavior, and the competitive landscape, a strategic consultant can help businesses adjust their strategies to better position themselves for success during an economic downturn.
In addition, a strategic consultant can help businesses identify new revenue streams and cost-cutting measures. This can include exploring new markets or product offerings, as well as identifying areas where operational efficiencies can be improved. By making smart strategic decisions and optimizing their operations, businesses can better weather the storm of a recession and even emerge stronger on the other side.
Custom Software Development
Custom software can also be valuable for businesses in this environment. During a downturn, companies may need to pivot their strategies or find new ways to reduce costs and increase efficiency. Custom software development can provide tailored solutions to these challenges and help businesses remain competitive.
For example, a custom software development company like Anthroware can work with a company to streamline operations and automate certain tasks, reducing the need for manual labor, and cutting costs. They can also create custom software that improves customer experiences and drives revenue, such as mobile apps to streamline workflows or e-commerce platforms. By investing in these types of solutions, businesses can position themselves for long-term success and weather the storm of the recession.
Competitive Intelligence (CI) and Market Research in Recession
Whether you’re using CI Software, running a win-loss program, or a customer retention program, B2B competitive intelligence can be one of the best ways to get a pulse on where your business should innovate.
When it comes to the B2B landscape, especially in B2B SaaS, competitive intelligence and win-loss analysis can be super valuable for businesses during a recession. Competitive intelligence involves gathering and analyzing information about competitors in order to make more informed business decisions. Win-loss analysis, which lives under the umbrella of CI, involves analyzing the reasons behind a business winning or losing a sale, to identify areas for improvement.
Customer Retention and Churn Analysis
In addition to win-loss analysis, customer retention programs and churn analysis, which also live under the umbrella of CI, can be powerful tools for businesses looking to thrive in rough times. By analyzing customer behavior and identifying patterns in customer churn, businesses can proactively address potential issues and retain more customers.
One effective strategy is to interview and survey certain segments of your customer base to try and better understand the true feelings of customers who may be at risk of churning. This can also be referred to as customer behavior analysis. For example, offering discounts or loyalty rewards to customers who have not made a purchase in a while can help keep them engaged and loyal to the brand. This engagement can then be used to drive an interview or gather survey responses. By using customer retention and churn analysis to identify these customers and their feelings, businesses can take a proactive approach to their customer retention strategies and improve their overall customer lifetime value.
Keeping an Open Mind and Staying Humble
Keep in mind there is always opportunity in chaos. You may need to change some things (big things) but it’s not just about survival. It’s about the same thing business is always about, which is seeing a need and being a valuable resource to address that need. The bad news is most companies do not thrive in a recession, and many fail completely.
According to the Huffington Post, the last recession killed over 170,000 small businesses between 2008 and 2010. Kavoussi, Bonnie. “The Recession Killed This Many Small Businesses.” HuffPost, HuffPost, 26 July 2012, https://www.huffpost.com/entry/us-lost-more-than-170000-small-businesses-2008-2010_n_1702358.
Small businesses weren’t the only ones though. Remember all the “too big to fail” talk?
A lot of huge companies filed for bankruptcy between those years as well. Schaefer, Steve. “The Great Recession's Biggest Bankruptcies: Where Are They Now?” Forbes, Forbes Magazine, 19 Aug. 2011, https://www.forbes.com/sites/steveschaefer/2011/08/10/the-great-recessions-biggest-bankruptcies-where-are-they-now/#10e0f75b4b7e.
This is depressing. But we shouldn't panic and assume that this recession will be as bad as (or worse than!) the 2008 recession, or that the recovery will track the same. We shouldn’t assume the same markets and industries will be impacted in the same ways. But what can businesses do to make it through? What business strategies might there be to not just survive, but stay alive and thrive during a recession?
Don’t Just Survive the Recession: Stay Alive and Thrive
The bear is coming. Failed companies in a recession couldn't outrun the bear. The businesses that stay alive will reap the benefits of less competition and more space in the market. Business that thrives during recession will come out stronger than ever post-recovery.
Products in High Demand During a Recession
Is your business innovating to help your customers outrun the bear? If not, can you? The projects that stay funded are the ones that drive efficiency, reduce risk, save cost, and improve throughput. You probably could have guessed some of those. It's not rocket science to understand how to thrive in a recession.
All businesses in all industries need help outrunning the bear. Some industries that are the least ‘recession-resistant’ will have more chaos, and other very recession-resistant industries will have more stability. This also means that some businesses will require more innovation than others to end up being one of the businesses that thrive in recession.
Examples of Business Innovation in a Recession
As an example, the healthcare industry is very recession-resistant, (people will need healthcare services in any economy) so the industry may be less affected by a recession. They might not need as much of an innovative strategy as other industries.
On the flip side, real estate generally sees a massive recessionary slowdown. People put properties on the market that not many are able to buy, real estate agents start looking for other employment, and so on. Often, disruptive PropTech products and services are born out of this environment due to the increased need to innovate.
Let’s Help Other Businesses Thrive During Recession
Whatever industries your customers are in, there are opportunities to help them outrun the bear and thrive in a recession, if you look at it through the right lens. During the global health crisis that we find ourselves in, I believe there are ways to use our businesses for good.
I’m praying for wisdom and guidance to do that with my business.
Hope this helps, and feel free to reach out if you’d like to chat about how we strive to be a force of hope and stability for your employees and your customers and want you to be one of the businesses that thrive in recession, not just survive!