1. Invest in Core Experiences and Customers
Instead of losing your consumers to an economic downturn, offer them value that increases loyalty. Leverage your distinctive value: What do you do best? What sets you apart from your competition?
Revisit what you think you know. Reevaluate your existing customer segmentations and get back to understanding the people you serve. Your best customers are those that buy from you again and again and therefor provide the highest value to your business
Invest in the best possible customer experience for your best customers. Do you really serve your customers optimally when they are interacting with you? If you give your best customers a superior experience, they will reward you with repeat business. And investing in providing a great customer experience you also future proof your business.
Make reducing customer churn a key priority. You can’t afford to lose existing customers. If you can optimize your business and website for your best clients, your CAC will significantly fall. Is your strategy optimized to bring back customers again and again, or are you focused primarily on the first conversion? Are you sure that you are making the best possible effort to turn a falling volume of interactions into business?
Step up within online trading and merchandising. Trading and merchandising is the practice of displaying and promoting the sale of the right products online. Right product at the right time at the right price is and has always been key. Often the “head of store” mentality that we’ve seen work well in the past is not being prioritized properly as a discipline in online businesses (main growth could be harvested elsewhere). Now is the time if you have not addressed this. There are significant revenue uplifts/optimization to be gained by focusing on this.
2. Challenge Marketing Priorities
Marketing efficiency also needs to be brought to a new level now. This is not about spending. It is about how you spend your budget and being even more certain that it supports your priorities and the short- and long-term business impact.
Optimize your acquisition funnel and approach paid digital marketing more granularly. Discuss targeting and granularity of your paid marketing efforts with your internal team and performance marketing/media agency to find pockets of growth and all small areas of improvement.
Double down on demand generation and lead generation effectiveness. If demand and lead generation are a key activity in your business, then identify the demand and lead generation tactics that are proving most effective, test different approaches, and optimize around those that work best. The clearer the visibility you have into the quality of your leads and the route they take to converting, the more scope you have to optimize your lead generation efforts, apply learnings and keep improving ROI.
Focus on your highest value acquisition channels. Some marketing channels have a higher ROI than others; you want to put most focus on those high-value channels. When you focus your spending on and optimize the conversion rate of your highest performing channels, it tends to have a compounding effect.
Establish a clear picture of the impact spending has on your bottom line. Figure out where spend is having the greatest impact. Commit to a granular understanding of where your target consumers are and whether the money you’re spending is really reaching them.
3. Establish Data as the Key Enabler
A data-driven mindset helps your business run at maximum efficiency, even in times of economic decline. And it is the foundation to understand the actual situation itself. When an external shock like this occurs, digital leaders need to double down on data to understand what is happening and why.
Don’t rely on historical metrics and baselines. When things move fast, you need to look at more indicators than normal to make sure to make the right decisions.
Double down on analytics. Operating analytics as a proper discipline can help you, no matter how hard the world is crashing around you. Of all aspects of business, mastering this discipline can provide new valuable insights and reveal value in interesting places if approached seriously. As mentioned previously, your focus right now should be on identifying your highest-value customers and tailoring your user experience to meet their needs. With a data-driven mindset, you will constantly work with behavioral data (qualitative and quantitative) of your customers and website visitors, prove out your hypotheses, and take action based on that proof.
Identify all revenue uplift opportunities across the customer journey. Looking across the customer journey with a data-driven approach, there are still opportunities to gain that extra revenue by applying best practices. Some companies can even go that extra mile to execute on what might previously have been considered areas with potential for marginal gains compared to other lager scale growth focused activities.
Master conversion rate optimization (CRO) and test-measure-learn processes. When customers’ interactions decline, you must put in all efforts and walk the extra mile to make sure that you convert on the valuable traffic that you have. If you haven’t already done it, establish a test-measure-learn “machine” internally. There are no secure ways to win; you can only test your way to perform marginally better than competition when all normal activities and processes have already been trimmed.
4. Revisit Ways of Working Internally
When market conditions change or take a turn for the worse, you need to turn your business into a highly efficient machine.
Double down on what works. When you find your budget, resources and team limited, it’s important to focus your efforts on areas that will carry the highest impact.
Change the way work is done in select areas. Identify the inefficiencies in the way you work to come out of the current market conditions with an improved operating model.
Apply faster decision making. Speed up decision making to move from a linear hierarchy to a decentralized model where designated squads/teams are given highly focused tasks.