The majority of economists surveyed by the National Bureau of Economic Research are predicting a recession in 2023.
While we cannot know how mild or hard a recession could be, business leaders can take proactive measures now to ensure their company is recession-resistant.
Things to know about preparing your business for a recession:
- The Impact of Customer Experience In Challenging Times
- Invest in Your CX Strategy
- Build an Agile Workforce
- Cut Operating Costs Via Automation
- Finding Balance – Avoiding Burnout and Layoffs
The Impact of Customer Experience In Challenging Times
Though at first glance, customer experience may seem like an easy place to start cutting costs, the benefits of a strong customer experience (CX) strategy can’t be disregarded.
A study of stock performance during the 2007-2009 U.S. recession revealed that CX leaders far outperformed other companies:
- CX laggards lost significant value during the 2008 financial crisis (-57.0%)
- The S&P 500 took a hit (-16.0%)
- CX leaders made gains (6.1%)
Though customer experience has evolved significantly since that recession with the widespread adoption of mobile use and applications, the returns on investment in CX have continued to remain strong.
A study of consumers and stock performance during the peak period of COVID’s impact on the economy found that companies with highly rated customer experiences drove greater shareholder value than their S&P index industry peers.
The research also found that:
- Companies with top-rated customer experiences saw their stock performance increase 45% between 2019 and 2022
- Companies with poor customer experience ratings declined 21% in the same time period
Invest in Your CX Strategy
Companies that invested in improving their CX reported increased customer loyalty (92%) and an uplift in revenue (84%) as a direct result.
A study also revealed that 58% of customers are actually willing to pay more for a product or service if they know they will receive great customer service. An investment in customer experience can be lucrative for your brand.
On the other hand, a poor CX strategy can be detrimental to your business – one in three customers say they will walk away from a brand they love after just one bad experience.
Every interaction that a customer has is an opportunity to excite them and build loyalty or lose them forever. During a recession, attracting and retaining customers is more vital than ever for your business to succeed.
A high-quality customer experience makes buying funnels more efficient, and especially when the economy is unstable, you should aim to turn each of your business’s visitors into a buyer.
Everything from application functionality to analytical insights that add value and personalization to customer interactions is an opportunity to improve CX. At all times, but especially in times of U.S. economic crisis, a strong customer experience strategy pays for itself.
Build an Agile Workforce
In challenging times, businesses need to be able to adapt to changes swiftly.
Whether adapting to a geographically scattered workforce during a global pandemic, coping with unpredictable supply chains as a result of the Ukraine war, or reworking business processes to increase efficiency during a recession, enterprise agility is key to ensuring your organization’s resilience.
Adopting Agile enables your organization to:
- Manage changing priorities
- Improve delivery predictability
- Increase employee satisfaction
- Increase customer satisfaction
- Swiftly react to changes
- Deliver with quality and reliability
By undergoing Agile transformation now, your organization will be prepared when a recession hits. By that time, you’ll have embraced Agile best practices and started to realize the benefits.
Cut Operating Costs Via Automation
Getting ahead of the looming economic downturn is invaluable, and now is the best time to prioritize projects that will help cut costs down the road.
The Institute of Robotic Process Automation (IRPA) estimates that by adopting automation, companies can reduce operating costs by 25-50%.
Investing in automation can not only help your organization cut costs before a recession, but also improve overall efficiency and quality.
By automating low-value or time-intensive business processes, you can reduce errors while allowing your teams to shift their time to more impactful work, ultimately delivering greater value for consumers.
Finding Balance – Avoiding Burnout and Layoffs
Now is the time to proactively plan for what your organization is actually trying to accomplish. However, in undergoing these changes, you want to protect your workers.
When driving the implementation of the changes and investments identified above, placing the responsibility entirely on your employees can cause them to overwork themselves and ultimately lead to burnout. Employee stress is already difficult to mitigate during a recession – leaders should avoid exacerbating it beforehand.
However, businesses should also avoid overhiring now to prevent the need for mass layoffs down the line. Instead, companies may find it wise to seek support from an external team.
AIM Consulting has deep expertise in all areas of technology that organizations need to leverage to be successful. Let’s take the steps to maximize your efficiency and quality now so your business can be resilient if and when a recession hits.
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