Anyone can run when the market is moving at the speed of light, the real test is how resilient you are in a recession.
Current turbulent world events, rising commodity prices and supply shortages are all driving the current rising levels of inflation. As a result, consumers are beginning to cut back on their nonessential spending, markets are becoming more price sensitive, and banks are increasing interest rates.
Yet, business leaders understand these increased risks also bring new opportunities for hungry and motivated businesses.
Naturally this presents a challenge to businesses as they wish to maintain current profits if not increase them. With the nimblest organizations already starting and enacting their inflation and recession mitigation plans with the aim to reduce risk, losses, and potential set themselves up for continued profitability. Finsys has identified 4 strategies to help prepare for an uncertain future.
Empower growth with customer engagement
When consumers become uncertain, and their patterns are disrupted they naturally shop around to ensure they are receiving a comparative value offering. This presents hungry firms with the ability to pay attention to the customers shifting needs and attune their offerings to remain relevant. The primary strategy for gaining customers within harsh times is to “Keep and steal“ them.
Firstly, to keep customers organizations must leverage business intelligence to understand their current customers needs as they no longer can justify expenditure on wants.
Additionally, to steal customers companies must catch the action of churning customers belonging to the competition, enticing them over by listening to why they left and giving them what they need.
Price for inflation
Agile firms that are fast to enact pricing decisions will set themselves up with an advantage within the current economic environment. When inflation is on the rise companies can no longer afford to have a blanket pricing strategy. Rather it is pivotal to become more nuanced about pricing, using clear customer segmentation to position and treat customers based on their defined price sensitivity or focus on value. Additionally, with a good understand of relevant customer segments parallel to your offering it becomes possible to capture new business volume from both new and existing customers.
Automation to set the talent free
Talent within an organization is both the most valuable assets and most criminally underutilized. Within a recessionary environment each employee must have the ability to contribute meaningful and valuable work. Enabling the abilities of AI will free up employee time by reliving them of simple, laborious, time consuming and repetitive tasks.
Develop the best place to work
Organizations must focus on their ability to attract the best people and retain the talent they have. Creating the best workplace means addressing, understanding, and fulfilling the needs of the employees within the company. Help employees feel secure and motivated within uncertain times is vital for maintaining the talents motivation and willingness to feel fully committed to generating new value.
Allowing workers to participate in additional in-house actives, projects and meet new teams is a great way to generate new energy and Collaboratory spirit. Additionally, prioritising the workplace satisfaction overcompensation is vital, as long as people feel they have a voice, are learning and can contribute to the organization they will stay. After people feel happy at work and the company is producing results it becomes time to pivot to financially rewarding strong team members. For most employee’s compensation is not the primary drive for their ability to do great work, but that does not mean they should not feel the fruits of their labours when it becomes possible for the company to sustainability afford to do so.
In an inflationary period the largest concern for the organization and employees is uncertainty. Mitigating that stress for the talent will ensure with good managerial direction that new ideas, values and purpose can be created for everyone involved.
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