“Economic instability is squeezing CX budgets and testing customer relationships. The ability to focus efforts and resources where they will have the greatest impact is critical.”
Many businesses are still recovering from the 2008 Global Financial Crisis (GFC), although from the outside it seems like business as usual, small to medium businesses are still challenged in creating enough resources to deal with the rapid change in technology and automated consumer communication.
On top of rapid change and market disruption, businesses now have to deal with the Covid-19 pandemic and adapt in continued economic uncertainty, with no evidence that it will return to what we would deem as normal.
With reduced marketing budgets forecasted well into 2021, businesses will need to focus on their brand/consumer experience to ensure that they stay relevant to their consumers. Those organisations that had an event, conference or tradeshow marketing model will now have to make an expeditious shift online.
For survival, it is imperative that businesses use their upmost creativity and plan new ways to re-introduce their offering to market.
A Harvard Business Review analysed 4,700 public companies in the economic downturn of 1980, the 1990 slowdown, and the 2000 bust, across three periods: the three years before a recession, the three after and the recession periods themselves.
The study concluded that only 9% flourished after a slowdown, outperforming rivals by at least 10% in sales and profits. The study found that these companies mastered “the delicate balance between cutting costs to survive today and investing to grow tomorrow.” This combination of defensive and offensive moves included a focus on greater operational efficiency along with investing “relatively comprehensively” in the future by spending on marketing, research and development as well as new assets.
According to the study, “These companies also judiciously increased spending on R&D and marketing, which may produce only modest benefits during the recession, but adds substantially to sales and profits long afterwards.”