What stops customers buying from us now?

What stops customers buying from us now?

We’re working in extremely challenging conditions. Priorities are rapidly shifting. Demands on our resources are strained. Programs that were business-critical only a few weeks back may be more critical – or not quite so critical now.

With a recession likely, I thought it might be helpful to share some thoughts with you that we’ve been discussing with some of our clients.

What problems get worse for clients in a recession?

In a typical recession, the UK economy shrinks anywhere between 3% and 5%. So, with GDP of £2.3 trillion, there’ll still be a significant amount of money floating about.

Spending will definitely drop in some categories, but not in all.

Unless work has already started, I suspect many new transformation programs will be delayed or put on hold for up to 12 months.

The flow of money

Initially, all types of “fire brigade” service activity will grow – fixing critical things that need a good deal of stiffening up, for instance.

Yet, the amount of money flowing in the UK economy will probably be broadly the same. But it probably won’t map neatly onto typical service offerings.

Today, it’s not clear what will shrink, what will hold steady, or even grow modestly. We’re still short of facts.

But like every other executive, your job will be to figure out as quickly as you can, where money is flowing to now in your market (or adjacent markets) so you can jump on it – and profit from it.

I’d be surprised if you weren’t revisiting what you’re doing today.

Does your approach need to change?

Most of your competitors will expect to lose business. Which is a bit like going to the Olympics and settling for a bronze medal.

Mentally, if others aren’t making as much effort, it shouldn’t take smart and nimble businesses that much more effort to win a gold medal.

Recession creates opportunities

Recessions always create opportunities for companies. Mostly because other service companies cut back and quietly wait for the storm to pass – but you don’t need to do that.

The market is tricky at the moment – but it’s not the end of the world.

It’s more likely there will be a considerable shift in customer priorities and spending plans.

Customers may reduce spending temporarily until they figure out what’s going on – but eventually life moves on – just a bit differently than before.

In short, your business will need to ask – and answer – a key question. What gets worse in a recession for your clients? And offer solutions to those problems.

This will mean things you are working on will change.

Naturally, you’ll still have to compete to get a chunk of that spending – but at least you’ll be sure the demand exists

This is very important.

It’s one thing to compete for spend that actually exists. But it’s not smart to compete for spending that’s not there anymore.

The acid test

So, the acid test for you – and your team, is…
…do the services you offer solve problems that are relevant to your clients during a recession? What problems get worse for them?

Right now, it’s important to remember three things. We must:

  1. Adapt to new rules, whatever they are
  2. Chase every sensible opportunity – speed matters a lot
  3. Get better at communicating these opportunities between our teams

Frankly, some of our clients are feeling a little demoralised and even a bit helpless because of external events.

I’ve never seen anything quite like this – but when you consider the harsh reality of the alternatives – it’s time to dig in and get moving.

We continue to work with clients to make sure they are as well-equipped as they can be, to adapt to the rapidly changing demands they face.

We don’t have all the answers, but we do have time to help.

Read our insights guide on guaranteeing program success.